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C.K. Cooper Corporate Finance Group Director Adam Connors on the outlook for natural gas prices and how investors can profit from the sector.
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Natural gas prices not liking -- up about one and three quarters percent today but they're still at their lowest level in ten years.
That's not stopping ExxonMobil from getting into the game the company now produces about -- much natural gas.
As it does oil -- America's most profitable company is in on this what are they know that you -- -- joining me now out of Fox Business exclusive Afrikaners.
Corporate finance group director with CK Cooper coming straight from the independent petroleum association of America has 100 largest.
Independent producers having a conference what is the what sort of the -- -- that you're pulling from that conference right now what's everybody talking.
Everybody's talking right now about natural gas and are trying to understand okay -- the bottom with the gonna be that time we can all jump in.
And unfortunately all the companies have as they have reserves on the books and either liquids -- which is oil and natural gas liquids or -- -- have a dry gas and they're basically trying to tell the story of what's the impetus what does this natural gas price cannot stop falling and when can we give the confidence of investors and now the time to buy -- you're the expert.
When.
Yes you've missed when.
Well as you can see natural gas prices only -- so far -- so low that gets to a point where doesn't make sense to produce them because economically a lot of these companies it takes at least.
-- -- dollar fifty to three dollars just to get him on the ground level of bringing to market and make money on it theoretically.
So the spot price isn't -- -- where it needs to be these companies are gonna start weighing on the rigs they're gonna start shutting in production.
And they're gonna wait for to make money because.
They're not exactly as sovereign back to some of these companies are worldwide -- sort.
Back in 2009.
And they intend you -- you had Starbucks in real trouble of this if you know what -- stores not enough people are coming in.
These companies are shutting down rigs when will we see the snap back.
-- the price action because of that is there's less supply finally and others oversupply so take a while to work its way through the markets but when do we start to really kind of see a reaction.
Up two points to that one is we've had a mild summer and we had a mild winter and sold that about our store supplies are at all time highs and so that's one thing that you need to focus on does understand it okay good that's a temporary thing that could cause a little bit of -- floor and -- -- -- And secondly is that the national.
-- in the United States make it a national push.
Towards natural gas and major a couple of ways some push some poll.
One of them is as simple fact the moving more towards natural gas turbines for electricity needs that offset the coal turbines.
And then also the simple fact is is that that -- courtroom -- -- right now are meeting some of the EPA.
Mandating guidelines are going to -- in in the next couple years there's a lot of emotion around -- yes.
Do you think that is there opportunity in these crackers at the moment even though it's under attack at least in some circles.
So the fracking aspect it's gonna call for more regulation than it does the whole.
You know to stop it all out -- -- -- France's and so we're gonna see more disclosure by the company's.
But at the same time I think that even the government has Paula.
Intensively researched they are in these issues.
I think that they're not gonna put the stop -- because there are a lot of excellent benefits that come out of doing things of where they were doing -- this year because he's an expert but also because we we need him to make us some money you have to names that you like right now what are -- What we -- as one of and that's -- the larger -- what we like about that is it's a big company.
-- debt to equity ratio is only around 35% so if natural gas prices stay low -- have the balance sheet in order to endure any type of long term issues but at the same time there -- large company.
And -- -- -- a decent dividend right now at a little over 4% which is a little bit outside of what normal folks are okay it will take a dividend is okay Cimarex is your second one I looked at this 18.
Point 8% of the float is being shorted -- going on there that makes me little nervousness comes mostly dry gas but the interesting part what I like about it.
It's right in the nuts and bolts of America which is in the mid continent region that Texas you know that -- guys that are out there in the fields and or make it happen and so.
They are moving towards a more liquid based approach of their having more oil and natural gas liquids with some of their production but at the same time.
They have the natural gas on the books that if you wanna growth company in the when you're gonna sit -- and having your radar.
This is a great time behind Adam is saying and can't and -- and Cimarex great to see you thank you very much.
