Natural Gas Winter Outlook

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Natural Gas Winter Outlook
Natural Gas Winter Outlook
Winter Heating Season

• 2005-2006

2007-2008
DRAFT 9/26
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Outline

• How Did We Do Last Winter?
• Winter 2007-2008
• Market Pressure Points
• Winter Weather
• Other Market Factors
• Scorecard On Natural Gas Outlook
• Conclusions

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How Did We Do ?
2006- 2007 Actual
2006 - 2007 Estimate
LAST WINTERS Score
WEATHER
ECONOMY
DEMAND
STORAGE
SUPPLY
MARKET PRESSURE
3
4
Market Pressure Points
4
5
Weather / Demand
ACTUAL
FORECAST
Winter Season Data Sources NOAA, EVA
Last Winter 2006-2007
This Year 2007-2008
7 warmer than normal
2 warmer than normal
lt ACTUAL SEASON
WARMER THAN NORMAL
NORMAL
WARMER THAN NORMAL

NORMAL
NOAAs PROJECTION gt
MUCH WARMER THAN NORMAL
COOLER THAN NORMAL
HEATING DEGREE DAYS
3,354
3,530
5
6
Economy / Demand
ACTUAL
FORECAST
Winter Season PERIOD TO PERIOD CHANGE Data
Source Global Insight
Last Winter 2006-2007
This Year 2007-2008
Low Growth
About the Same
ECONOMY
2.1
2.2
GDP GROWTH
4.5
4.9
UNEMPLOYMENT RATE
2.8
2.6
MANUFACTURING
2.2
2.8
CPI
6
7
Overall Demand
ACTUAL
FORECAST
Winter Season FIVE MONTHS Data Source EVA
Last Winter 2006-2007
This Year 2007-2008
72.9 Bcf/d
74.2 Bcf/d
DEMAND
1.8
5.0
DEMAND CHANGE
ANNUAL GENERATING CAPACITY ADDITIONS
6.2 GW
9.9 GW
Residential
Electric
GROWTH SECTOR
None
None
DECLINE SECTOR
7
8
Storage / Supply
Winter Season Data Sources EIA, ICF
Last Winter 2006-2007
This Year 2007-2008
END OFINJECTION SEASON
3,445 Bcf
3,520 Bcf
PERCENT OF AVG. FILL ( FIVE-YEAR AVERAGE )
105
105
ADDITIONAL STORAGE CAPACITY
24 Bcf
Est. 104 Bcf
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9
Production / Supply
ACTUAL
FORECAST
Winter Season Data Source ICF
Last Winter 2006-2007
This Year 2007-2008
ANNUALWELL COMPLETIONS
29,000
30,500
ANNUAL AVG. RIG COUNT
1,372
1,485
WINTER AVG. PRODUCTION
50.7 Bcf/d
51.3 Bcf/d
7.8 Bcf/d
8.5 Bcf/d
CANADIAN IMPORTS
2.0 Bcf/d
1.9 Bcf/d
LNG IMPORTS
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Other Market Factors

• Consumer Conservation
• - Structural
• - Behavioral
• Weather Risks
• - Hurricanes (Dust Storm Effects)
• - Cold Snaps
• New Transportation Infrastructure

Variables That Can Move TheMarket
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Winter Outlook
Last Winter 2006-2007
Winter Season
This Year 2007-2008
Weather / Demand
Economy / Demand
Overall Demand
Storage / Supply
Production / Supply
11
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Conclusions

• Tight Market Mindset Accepted
• LNG Potentially Moderating Influence
• Producers Maintaining Heavy Investments in This
  Stable Price Environment
• Federal Lawmakers Need to Make the Tough
  Decisions on Natural Gas Supply

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