2024-01-31 13:23:20 ET
Summary
- Antero Resources Corporation should benefit from a recent cold spell, which led to higher prices and increased profits during that cold spell to offset the warm December.
- Rig count will likely continue to drop until production and supply come back into balance. In fact, the rig count may continue to drop, leading to a shortage.
- The declining rig count is affecting production. But the production affected comes long after the drilling due to well completion and cleanup after fracking.
- Antero Resources has the unusual ability to redirect production to stronger priced markets as needed. This is a great characteristic during cold spells.
- "Buy straw hats in January" applies here, as this is a good contrarian opportunity.
At this point of winter, nearly everyone knows we have an El Nino winter and they are supposed to be warm . As I mentioned before, those things are not as dependable as many commenters believe. Sure enough, Kinder Morgan ( KMI ) management just mentioned in the latest conference call how they made up a significant portion of their guidance (which normally includes a cold spell) after a record warm December that had them worried. One of the very few companies that has unusual flexibility to send natural gas production to different places is Antero Resources Corporation ( AR ). If any company benefitted from the recent cold spell that raised prices somewhat for a while, it was this company....
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For further details see:
Antero Resources: Let Us Talk About Natural Gas And Winter