Natural Gas Update OMA Energy Committee Richard Ricks NiSource/Columbia Gas of Ohio May 21, 2020 1
2019/2020 Ohio Winter Degree Days: 12 % Warmer 2
NOAA Temperature Outlook: May, June, & July 2020 3
Storage – Above the 5 Yr Average Working gas in storage was 2,422 BCF as of Friday, May 8, 2020, according to EIA estimates. This represents a net increase of 103 BCF from the previous week. Stocks were 799 BCF higher than last year at this time and 413 BCF above the five-year average of 2,009 BCF. At 2,422 BCF, total working gas is within the five-year historical range. . . 4
NYMEX Prompt Month Settlement – 5 Years 5
NYMEX Prompt Month Settlement History 6
NYMEX Futures Settlement: 05/12/2020 – $3 back on chart 7
NYMEX Term Pricing: 5-18-2020 – Little Higher TERM PRICE 3-6-20 PRICE 5-18-20 3 month $1.76 $1.80 (+$0.04) 6 month $1.84 $1.98 (+$0.14) 12 month $2.07 $2.37 (+$0.30) 18 month $2.10 $2.44 (+$0.34) 8
Select Hub Pricing – March 6, 2020 – Little Lower HUB LOCATION 3-6-20 5-18-20 Henry Hub $1.74 $1.60 (-$0.14) Houston Ship Channel $1.65 $1.61 (-$0.04) TCO Pool $1.50 $1.37 (-$0.13) Dominion South Point $1.40 $1.17 (-$0.23) TETCO M-2 $1.41 $1.13 (-$0.28) TGP Zone 4 $1.37 $1.03 (-$0.34) Dominion, TCO, TETCO, & TGP pricing is Marcellus/Utica Area. 9
EIA predicts Natural Gas Production Slow Down in 2020 10
EIA predicts Natural Gas Consumption Slow Down in 2020 U.S. natural gas consumption Components of annual change billion cubic feet per day billion cubic feet per day 10 120 forecast 8.0 110 8 100 6 90 4 80 2.6 70 2 60 0 50 net change industrial -2 40 electric power residential and 30 monthly history commercial -2.5 -4 other -3.3 monthly forecast 20 -6 annual average 10 0 -8 2018 2019 2020 2021 2018 2019 2020 2021 Source: Short-Term Energy Outlook, May 2020 11
US Natural Gas Supply, Demand, & Export - Tempering 12
Historical US Total Energy Production & Consumption – Gas & Renewables Growing 13
Recent Unusual Pricing: Negative Oil & Low LNG Prices 14
Oil & Gas Rig Count – Low – Price is too low 15
Oil & Gas Rig Count – Lots Lower – By the #s Rigs Change from Tue, May 05, 2020 last week last year Oil rigs 292 -10.2% -63.7% Natural gas rigs 80 -1.2% -56.3% Note: Excludes any miscellaneous rigs Rig numbers by type Change from Tue, May 05, 2020 last week last year Vertical 9 -18.2% -80.0% Horizontal 338 -9.6% -61.2% Directional 27 17.4% -62.0% 16
Recent Developments - Energy • Continued pain in the Oil & Gas field; Pricing continues low • Domestic Oil & Gas E&P entities continue to materially cut capital budgets • COVID 19 materially reduced energy demand in addition to a warm 19/20 winter • Oklahoma joins Arizona & Tennessee in preventing local governments from prohibiting the use of natural gas in buildings 17
Thank You 18
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