Long-term Prices: Where? When?
We believe the long-term gas price is above historical means.
We are currently entering the first upward cycle in a de-regulated gas market
- Important fundamental changes suggest history may be poor guide to the future
Where is the new mean?
- Corporate rate of return for least efficient producers
- History of value destruction and subpar return on investment
- Cost to bring new gas from abundant, remote sources
- Price must restrain potential demand growth
Structural obstacles threaten to prolong the cycle