newcomers, holders a great opportunity at hand, page-44

I can't get too enthused about SSN, dilution has ruined it. Last sold it at 40c some time back but suppose for short term DT why not.

From Casey Research today:

Americas Invisible Gas Supply

By Casey Research Energy Division
We love being the first to report a story, as it usually brings with it some positive returns for our subscribers. Knowledge that averts loss is just as valuable, however, and such is the case here. The biggest secret in the U.S. natural gas market is what one could call hidden wells. Together they will comprise a curb on natural gas prices in 2010.

With the recent plunge in gas prices, drilling in North America also dropped. It didnt stop altogether, however, even though the spot price of natural gas was a losing proposition for most companies. Two reasons for this: drilling costs went down with the demand for drilling, and even more important, companies were to meet certain drilling expenditure requirements or lose the land.

With the improvement of unconventional drilling techniques, thousands of wells were drilled successfully in 2009 that are economic at US$4-5/mcf. But the North American market is currently awash with natural gas, and storage is nearly full, too. So the managements of these companies have come up with a very intelligent solution that nobodys talking about store it in the ground. That is, drill the wells but dont complete them.

For natural gas companies, this strategy means they can meet the criteria to hold their sections of land (while taking advantage of lower drilling costs) without actually producing gas. It can take up to many weeks, even months, to drill some of these wells, but no more than a few days to complete a well. Completing a well means producing gas.

For the natural gas market, it means theres a lot of supply that can come online within a few days to take advantage of any pop in prices, which would then more than meet the demand, and gas prices would go down again. We estimate there are thousands of these hidden wells in North America today, representing anywhere from 2 to 10 BCF (billion cubic feet) per day of production. This is very bearish for natural gas for the near term.

Conclusion: With thousands of hidden wells that are economic at US$4-5/mcf and that can come on-line rapidly whenever prices pop, many of the big, very smart companies have hedged their 2010 production at prices between US$5 and US$6/mcf. Thus, for the first quarter of 2010, we see a ceiling price of US$6.50. As investors, well be sticking with companies that are seen as takeover targets low-cost producers with hidden wells in their portfolio and hedged positions at premiums to the market spot price.

[Ed. Note: Marin Katusa, Chief Investment Strategist of our Energy Division, and his team have laid out their Top 10 predictions for 2010 in a recent edition of Caseys Energy Report. The story you just read is the teams No. 1 game changer for 2010. If youre interested in finding out whats No. 2 through 10, just sign up for a risk-free trial of Caseys Energy Report. Details here.