This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Gasco Energy Management Discusses Q2 2012 Results - Earnings Call Transcript

Gas markets are changing rapidly. In mid-April, the NYMEX prompt month natural gas contract traded at $1.90 per MMBtu. That marked the lowest price in more than a decade.

Since that 10-year low, prices have recovered more than 60% to around $3.20. Our wellhead prices received and followed a similar path.

To remind the listener, we have an internal projection of $3.50 wellhead price for our Uinta gas drilling project, which would generate a 10% rate of recurrent for drilling. This $3.50 price is prior to the beneficial effects of the drilling carry we received from our Uinta Basin JV partner, which would reduce the needed wellhead price well below recent levels.

Of course, we do not intend to drill 10% rate of return projects, but the encouraging indications of a gas price revival are positive for Gasco and its shareholders.

The recent low prices may be traced to 3 causes. First, the engineering success of hydraulic fracturing in reducing the cost and increasing the productivity of liquids-rich plays like the Eagle Ford Shale in Texas and Marcellus Shale in Pennsylvania. Second, the destruction of industrial demand that followed the recession of 2009. Third, the unseasonably mild winter this year that reduced demand for space heating in both home and commercial industrial markets.

The seeds of a long-term recovery in natural gas prices are being sung this year. These effect -- these seeds affect both the supply and demand side of the equation. On the supply side, the number of rigs looking for natural gas has been on a steady decline over the last year.

As of July 27, the North American natural gas rig count was 505 rigs, down from 877 a year ago. This is a 42% decrease in 1 year. Many industry analysts believe that the current rig count is below the number of which the fleet is able to maintain supplies at current levels. Consequently, we may begin to see a tightening in supply in the coming months.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs