Comments on: Contango Oil & Gas (MCF) Insane Value? by Aaron Edelheit http://blog.valueinvestingcongress.com/2009/03/12/contango-oil-gas-mcf-insane-value-by-aaron-edelheit/ Value Investing Congress Blog Fri, 12 Mar 2010 02:58:57 +0000 http://wordpress.org/?v=2.6 By: mike kruger http://blog.valueinvestingcongress.com/2009/03/12/contango-oil-gas-mcf-insane-value-by-aaron-edelheit/#comment-29 mike kruger Fri, 13 Mar 2009 16:34:29 +0000 http://blog.valueinvestingcongress.com/?p=174#comment-29 Aaron - Couldn't have said it better myself. Contango will do fine regardless, but I agree a jump in gas prices is more likely than not. The futures market apparently disagrees with us. I checked the DOE's forecast in an attempt to understand what folks are thinking: http://www.eia.doe.gov/emeu/steo/pub/5atab.pdf Adding up all U.S. and Canadian (aka pipeline) production, they forecast a 1.3% drop in production for 2009, and another 1.3% for 2010. These are the same folks who are telling us drilling is down 40-50% y-o-y! Does not compute. Aaron - Couldn’t have said it better myself.

Contango will do fine regardless, but I agree a jump in gas prices is more likely than not. The futures market apparently disagrees with us. I checked the DOE’s forecast in an attempt to understand what folks are thinking: http://www.eia.doe.gov/emeu/steo/pub/5atab.pdf

Adding up all U.S. and Canadian (aka pipeline) production, they forecast a 1.3% drop in production for 2009, and another 1.3% for 2010. These are the same folks who are telling us drilling is down 40-50% y-o-y! Does not compute.

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