© Copyright 2014 Energy Solutions, Inc.

Inside This Issue

Pricing Outlook .......................................................... 2-3 Bearish/Neutral/Bullish Factors ................................................... 2

Natural Gas Price Outlook: “At a Glance” ............................ 2 Supply/Demand Balance Graph ........................................... 2

Fundamental Pricing Analysis ....................................................... 3 Technical Pricing Analysis ............................................................. 3

NYMEX Pricing Data: Forward Price Curves ........................ 4

Supply/Demand Analysis ............................................ 5-6

Production Data ............................................................................. 5 Consumption Projections ............................................................. 5

Drilling Rig Count ......................................................................... 6 EIA Drilling Productivity Report ................................................. 6

Storage Analysis & Outlook ......................................... 7

Weather Outlook .......................................................... 8

Fact Facts ........................................................................ 9 Economy and Financial Data ........................................................ 9

U.S. Gas Supply and Demand Data ............................................ 9 Commitment of Traders Data .................................................... 9

Industry News ................................................................. 9 FERC Proposes Changes to Gas Day ........................................ 9

ICE to Launch Storage Futures Contract ................................. 9 Rockies Express Looks to Move Gas East to West .............. 9

Historical NYMEX Price Data ..................................... 10

NYMEX Price Data ................................................ 11-13 NYMEX Pricing Strip Data ........................................................ 11

NYMEX Pricing Data: Highs and Lows ................................. 12 Recent NYMEX Gas Futures Pricing ...................................... 13

March 2014

Volume 18, Issue 3

Reference Links

Industry Glossary Unit Conversions

NYMEX Expiration Prices

Now available …

Laminated 2014-2015

NYMEX Expiration

Calendars

What to Watch for in

Upcoming Issues …

An in-depth look at natural gas

storage inventories. Are the fears

over refilling storage warranted or is

the need for storage changing because

of onshore-shale production growth?

Will this winter change how the na-

tion views the utilization of storage?

A closer look at shale gas produc-

tion. How much growth is really ex-

pected? Are fields being depleted, and

if so, are there new ones to take their

place?

Understanding pipeline basis. The

cost of pipeline transportation, also

referred to as “basis” has risen dra-

matically in the Midwest and the

Northeast over the past 90 days.

How can buyers protect against basis

price moves? Is this is an anomaly or a

new trend?

January production figures. How

will well freeze-offs impact production

data?

Click Here to Request

March 2014 Page 2_

Pricing Outlook: “At a Glance”

Bearish Factors

Cooler temperatures this spring could help storage

injections begin at a faster-than-average pace.

Analysts expect production gains of 2 Bcf/day to 3

Bcf/day in 2014. Plus, 1.4 Bcf/day of pipeline infra-

structure was added in November, and 1.2 Bcf/day of

processing capacity should be on-line by the end of

April.

The potential for El Niño conditions means lower-

than-average hurricane activity.

The top 34 independent producers have 51% of their

production hedged for 2014.

Nuclear refueling outages should be less than last

year.

Bullish Factors

The potential for an El Niño develop-

ment in July or August could mean

hotter temperatures in the fall.

The nation needs to inject on average

3.8 Bcf/day more gas each week than

last year to reach last year’s storage

inventory levels on November 1.

This will be a challenge if summer

temperatures are hotter than normal.

Hydro power availability in Califor-

nia and the Northwest is less than last

year at this time.

Neutral Factors

There are limited

financial arbitrage

opportunities for

storage as the

price of natural

gas for December

2014 is just $.20

per MMBtu

higher than May

2014.

Summer weather

is still an un-

known.

Natural Gas

Pricing Outlook

Some analysts believe refilling stor-

age to last year’s levels will not be a

problem, but others disagree. The fact

is … it is just too soon to determine how

this summer is going to unfold. If coal

prices are lower than natural gas prices,

a higher level of coal-fired electric gen-

eration will free up natural gas for injec-

tion into storage. If nuclear refueling

outages are minimal, that too will free

up natural gas for injection into storage.

However, the biggest caveat remains

summer temperatures. Hotter weather

prompts air conditioning demand, and

that demand is typically met through the

use of natural gas-fired electric genera-

tion. Initial weather forecasts call for

above-normal temperatures in the south-

ern part of the nation. There is no dis-

puting that production levels are up

from last year, and infrastructure im-

provements should increase supply

availability. However, producers know

refilling storage isn’t going to be an

easy task. As a result, the market is ex-

pected to more quickly embrace market

data that supports an upward price move

than a downward price move.

Click Here

to view “Actions to Consider” in the March 26, 2014, Weekly Edition.

The above graph illustrates the supply/demand balance. With colder

weather over the past 90 days, consumption has dramatically exceeded

supply levels. During these periods, storage inventories are relied upon

to supplement existing supply.

March 2014 Page 3_

Pricing Analysis: Fundamentals & Technicals

Fundamental Pricing Analysis

Definition of fundamental analysis

The fact that storage inventories are at ten-year lows is al-

ready built into pricing. So, the question now is what is going

to cause prices to move higher or lower. April is considered a

shoulder season, which means there should be little need for

natural gas for heating or cooling needs. Any gas production

shut-in due to well freeze-offs should return to the market, and

analysts estimate that domestic production will climb by 2 to 3

Bcf/day over the course of 2014, primarily because of ongoing

growth in the Utica and Marcellus shale basins. In addition,

there has been 1.4 Bcf/day of new pipeline expansions that

went into service last November and 1.2 Bcf/day of processing

capacity that should be in-service by the end of April. These

additions will assist in getting more shale supplies to the mar-

ketplace as wells that were previously drilled can now be

brought into service because of proper infrastructure.

So, from a supply side, the market is in relatively good

shape. The unknown really comes from the demand side.

Spring is a good time to gauge supply availability, as there is

little demand for natural gas. The primary factor impacting

demand in the spring is the number of nuclear power plants

taken off-line for refueling and maintenance. When nuclear

power is off-line, the replacement is natural gas-fired electric

generation.

In the end it is going to boil down to Mother Nature. There

are early forecasts of an El Niño development in July or Au-

gust, which depending on the severity can correlate to above-

average temperatures. If you get several days of 90-plus de-

grees, then natural gas is going to be directed to the electric

power sector for cooling needs. In turn, this will create con-

cern over refilling storage, and prices will move higher. On

the other hand, an El Niño development in the late fall could

result in a warmer-than-normal start to winter, which would no

doubt be welcomed as a way to allow storage inventories to

continue to build into the month of November.

There are just too many unknowns relating to how fast stor-

age inventories will refill and to what level they will refill to

by November 1, 2014, to try and determine where natural gas

prices will trade this summer. The ability to refill storage to

adequate levels exists and so long as that perception isn’t de-

railed, natural gas prices should trade in a tight trading range,

likely bouncing back and forth between $4-$5 per MMBtu.

Technical Pricing

Analysis

Definition of technical analysis

Most technical signals are neutral

right now, providing little insight into

price direction. The Relative Strength

Index (RSI) is a technical momentum

indicator that compares the magni-

tude of recent gains to recent losses

in an attempt to determine over-

bought and oversold conditions of an

asset. An asset is deemed to be over-

bought once the RSI approaches the

70 level, meaning that it may be get-

ting overvalued and is a good candi-

date for a pullback. Likewise, if the

RSI approaches 30, it is an indication

that the asset may be getting oversold

and therefore likely to become under-

valued. A reading between 30 and 70

provides little insight into price direc-

tion, and right now the RSI is at

51.96. While this is just one techni-

cal signal, it is one that is typically

quite accurate.

At this time, the market has been

trending lower even in the face of a

lot of unknowns. Plus, price volatil-

ity has declined substantially, and

that is illustrated on page 12 in the

Highs and Lows Chart. A price de-

cline to $4.35 per MMBtu in the May

2014 natural gas NYMEX contract

opens the door to test $4.25 per

MMBtu and then $4.15 per MMBtu.

Conversely, a price move back to-

ward $4.50 per MMBtu, opens the

door to test $4.75 per MMBtu.

Which way prices move will likely

be linked directly to the next two

weekly storage reports.

March 2014 Page 4_

NYMEX Pricing Data: Forward Price Curves

This graph illustrates the daily settlement of forward natural gas NYMEX contract settlements yesterday (data pro-

vided below), and how forward natural gas NYMEX prices from yesterday compare to where those contract months

were trading 1-, 2-, and 3-years ago. Short-term, for 2014, natural gas prices have rebounded because of a lingering

winter and below-average storage inventories. The forward price curve provides insight into how the natural gas

market perceives the balance of supply and demand. However, based on the forward price curve, it appears that the

market still considers the current situation a short-term event, that will resolved within the next year.

Jan-15 $4.780 Jan-16 $4.411 Jan-17 $4.473 Jan-18 $4.566

Feb-15 $4.733 Feb-16 $4.383 Feb-17 $4.448 Feb-18 $4.537

Mar-15 $4.620 Mar-16 $4.321 Mar-17 $4.386 Mar-18 $4.472

Apr-15 $4.117 Apr-16 $4.051 Apr-17 $4.111 Apr-18 $4.197

May-14 $4.485 May-15 $4.074 May-16 $4.056 May-17 $4.120 May-18 $4.211

Jun-14 $4.519 Jun-15 $4.090 Jun-16 $4.072 Jun-17 $4.141 Jun-18 $4.234

Jul-14 $4.558 Jul-15 $4.119 Jul-16 $4.091 Jul-17 $4.165 Jul-18 $4.262

Aug-14 $4.556 Aug-15 $4.113 Aug-16 $4.099 Aug-17 $4.178 Aug-18 $4.277

Sep-14 $4.531 Sep-15 $4.083 Sep-16 $4.091 Sep-17 $4.172 Sep-18 $4.280

Oct-14 $4.543 Oct-15 $4.101 Oct-16 $4.111 Oct-17 $4.196 Oct-18 $4.305

Nov-14 $4.589 Nov-15 $4.139 Nov-16 $4.176 Nov-17 $4.277 Nov-18 $4.400

Dec-14 $4.700 Dec-15 $4.279 Dec-16 $4.336 Dec-17 $4.446 Dec-18 $4.580

Forward Natural Gas NYMEX Settlement Prices on 3/28/14

$3.0000

$3.5000

$4.0000

$4.5000

$5.0000

$5.5000

$6.0000

$6.5000

$7.0000

$7.5000

$8.0000

May

-14

No

v-1

4

May

-15

No

v-1

5

May

-16

No

v-1

6

May

-17

No

v-1

7

May

-18

No

v-1

8

May

-19

No

v-1

9

May

-20

No

v-2

0

May

-21

No

v-2

1

May

-22

No

v-2

2

May

-23

No

v-2

3

May

-24

No

v-2

4

May

-25

No

v-2

5

May

-26

No

v-2

6

Pe

r M

MB

tu

Forward Natural Gas NYMEX Prices: Four-Year Comparison

3/28/20143/28/20133/28/20123/28/2011

March 2014 Page 5_ Republished from 3/12/14 Weekly Edition

Supply and Demand Analysis and Outlook

Production Data

through

December 2013 (Issued 2/28/14)

The most recent

monthly production

data from the Energy

Information Admini-

stration (EIA) shows

production levels in the

Lower-48 states de-

clined slightly to 74.80

Bcf/day. The decline

was caused primarily

by the colder weather,

which prompted equip-

ment failures and well

freeze-offs. Weather-

related issues continued

into January, so a major

production rebound

next month is not an-

ticipated.

40

45

50

55

60

65

70

75

80

85

90

Ju

l-0

6O

ct-

06

Ja

n-0

7A

pr-

07

Ju

l-0

7O

ct-

07

Ja

n-0

8A

pr-

08

Ju

l-0

8O

ct-

08

Ja

n-0

9A

pr-

09

Ju

l-0

9O

ct-

09

Ja

n-1

0A

pr-

10

Ju

l-1

0O

ct-

10

Ja

n-1

1A

pr-

11

Ju

l-1

1O

ct-

11

Ja

n-1

2A

pr-

12

Ju

l-1

2O

ct-

12

Ja

n-1

3A

pr-

13

Ju

l-1

3O

ct-

13

Ja

n-1

4

Bc

f/d

ay

U.S. and Lower 48 States Natural Gas Gross Production

U.S. Total Lower 48 Linear (Lower 48)

Consumption

Projections:

As of 3/11/14

According to the most

recent Energy Information

Administration Short-

Term Energy Outlook,

natural gas consumption

in 2014 is expected to

average 71.3 Bcf/day,

which is actually a drop of

0.1 Bcf/day from 2013.

Increased consumption

from the commercial and

residential sectors due to

higher heating demands in

the first quarter are ex-

pected to be offset by

lower demand from the

electric power sector.

-3

-2

-1

0

1

2

3

4

5

6

7

8

2012 2013 2014 2015

0

10

20

30

40

50

60

70

80

90

100

110

U.S. Natural Gas Consumptionbillion cubic feet per day (Bcf/d)

Electric power (right axis)

Residential and comm. (right axis)

Industrial (right axis)

annual change (Bcf/d)

Source: Short-Term Energy Outlook, March 2014.

March 2014 Page 6_

Supply and Demand Analysis and Outlook

Rig Count:

As of 3/28/14

According to

Baker Hughes, the

active natural gas

drilling rig count

fell by 8 rigs for

the week ending

March 28, 2014.

The current active

natural gas drilling

rig count is 318

rigs. Despite a

rebound in prices

from last year, the

active natural gas

drilling rig count

remains at its low-

est level since July

1987.

Energy Information Administration Drilling Productivity Report

In its March 10, 2014, Drilling Productivity Report, the Energy Information Administration highlights pro-

jected year-over-year changes for February for six major gas and oil-production shale basins — Bakken, Ea-

gle Ford, Haynesville, Marcellus, Niobrara, and Permian. Of those six basins, the Marcellus shale basin con-

tinues to show the largest year-over-year gains for natural gas.

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1/3

1/1

71/3

12/1

42/2

83/1

43/2

84/1

14/2

55/9

5/2

36/6

6/2

07/4

7/1

88/1

8/1

58/2

99/1

29/2

610/1

010/2

411/7

11/2

112/5

12/1

9

U.S. Natural Gas Drilling Rig CountPer Baker Hughes

2009

2010

2011

2012

2013

2014

March 2014 Page 7_

Storage Projections (in Bcf)

Injection season ends: 10/31/2014 Number of weeks remaining in the injection season: 31 ESI’s estimate of storage inventories on 10/31/14: 3,117 Bcf To reach this estimate, storage injections must equal: +73 Bcf per Week If injections are equal to the 2013 weekly average of: +69 Bcf per Week Then storage inventories on 10/31/14 will be: 2,973 Bcf If injections are equal to the 5-year average of: +65 Bcf per Week Then storage inventories on 10/31/14 will be: 2,848 Bcf ESI estimates that by 03/31/14, storage inventories will be: 846 Bcf

ESI estimates that by 10/31/14, storage inventories will be: 3,117 Bcf

Weekly Storage Comparison (in Bcf) Week Ending This Year Last Year March 21 - 57 Withdrawal - 90 Withdrawal March 14 - 48 Withdrawal - 74 Withdrawal March 7 -195 Withdrawal -145 Withdrawal February 28 -152 Withdrawal -149 Withdrawal

Year-on-Year Comparison (in Bcf) (for week ending 3/21/14)

2014 Inventories 896 Bcf 2013 Difference - 899 Bcf Deficit (Inventories were 1,795) 5-Yr. Avg. Difference - 926 Bcf Deficit (Inventories were 1,822)

Projected Price Impact: There is a lot

of gas that needs to be redirected to stor-

age this summer. Therefore, storage in-

ventories will be a focal point for prices

over the next several months, and any

major price relief isn’t expected until the

nation is certain of the injection pace.

Storage Analysis and Outlook

Storage Outlook

Analysts expect another storage with-

drawal for the week ending March 28, 2014,

that will cause storage inventories to fall to

850 Bcf by the end of March, a ten-year

low. U.S. production levels this year are

projected to be 2 Bcf/day to 2.5 Bcf/day

higher than last year, but even that isn’t

enough to bring storage inventories back to

last year’s levels. Last summer, the nation

injected 2,127 Bcf into storage to take stor-

age inventories to 3,814 Bcf by early No-

vember. To reach the same level this year,

the nation would need to inject another 3.8

Bcf/day each week. This is no small feat,

but it is achievable if summer weather is not

above normal.

This graph on the left

reflects just how

quickly natural gas stor-

age inventories have

been drawn down this

past winter. According

to the Energy Informa-

tion Administration

(EIA), current invento-

ries are well below the

historical five-year

minimum level, and the

blue line, which repre-

sents the current storage

inventory level is ex-

pected to approach the

850 Bcf level by the

end of March.

March 2014 Page 8_

Weather Outlook

National Weather Service Forecasts

The following weather maps reflect the weather forecasts for the next 7 months.

Weather Map Color Code

Blue Colors (B): Below normal temperatures

Orange/Red Colors (A): Above normal temperatures

No Color (N): Normal Temperatures

No Color (EC): Equal chance of above normal or below normal

NOTE: Temperature extremes go from lighter (slight variance) to darker (extreme variance).

Monthly Outlook: April 2014

Summer Outlook: Jul-Sep 2014

Issued 3/20/14

3-Month Outlook: May-July 2014

Issued 3/20/14

Issued 3/20/14

Projected Price Impact: Spring and early summer

weather forecasts are supportive for natural gas prices.

That doesn’t necessarily mean that weather forecasts are

going to push natural gas prices back to the upper-$4s.

But, it does mean that weather forecasts will make it more

challenging for natural gas prices to fall to the low-$4s.

Temperature Outlook

According to Weather Services International (WSI), cooler

temperature patterns are expected to continue into April for

Montana, the Dakotas, the Midwest and the Northeast. The

storage injection season typically begins on April 1, but de-

pending on the extent of the cold in the Midwest and the

Northeast, it is possible that withdrawals could continue into

the first week of April.

However, WSI says the Northeast can expect to see

warmer than normal temperatures beginning in May, but the

Great Lakes and the Southeast may continue to see below

normal temperatures. The weather service also expects June

to bring above normal temperatures nationwide, with the ex-

ception of the North Central region, Florida, Colorado and

New Mexico.

The initial spring weather forecast is supportive for natural

gas prices. The lingering cooler temperatures could delay the

start of the storage injection season. Then, a warmer start to

the summer could correlate to an increased emphasis on the

use of natural gas-fired electric generation to meet cooling

needs. The good news there, however, is that the nuclear

power industry is expected to have a record year with less

downtime for refueling. Fewer refueling means a higher

availability of nuclear power, which could displace anywhere

from 600,000 Mcf/day to 1.3 Bcf/day of natural gas-fired

electric generation. Less emphasis on natural gas-fired elec-

tric generation makes it easier for the nation to refill storage

inventories at a faster pace.

Looking ahead to the hurricane season, an early forecast

from ImpactWeather expects the 2014 Atlantic-basin hurri-

cane season to be less active than normal, primarily because

of the potential for an El Niño development in July or August

2014. ImpactWeather is predicting ten tropical named

storms, including four hurricanes, of which only one will

reach major strength (Category 3 or above).

March 2014 Page 9_

Fast Facts and Industry News

FERC Proposes Changes to Gas

Day. In seeking to better coordinate

the nation’s natural gas pipeline grid

and electricity grids, the Federal En-

ergy Regulatory Commission

(FERC) has proposed to change the

start of the gas day from 9:00 a.m.

CST to 4:00 a.m. CST. The idea

behind the time change is that it

would better capture how both elec-

tric generators and the pipeline in-

dustry gears up to start a day. At

this point, the proposal is simply

part of a Notice of Proposed Rule-

making (NOPR), and marks the start

of six-month comment period.

ICE to Launch Storage Futures

Contract. The IntercontinentalEx-

change (ICE) has launched a futures

contract based off the change in the

Energy Information Administra-

tion’s (EIA) natural gas storage re-

port. ICE says the futures contract

will give the market better insight

into storage report expectations, but

that remains to be seen. The futures

contract will expire at 10:28 a.m.

EST, two minutes before the release

of the official storage report.

Rockies Express Looks to Move

Gas East to West. The Rockies

Express Pipeline (REX) is holding a

non-binding open season to gauge

interest in moving 2.5 Bcf/day of

gas out of the Marcellus and Utica

shale basins to markets in Ohio,

Indiana, and Illinois. Massive shale

growth in the Appalachians has re-

moved much of the rationale behind

the REX, and as such, this proposal

is a reverse-flow of gas on REX.

Economy and Financial Data

02/14 01/14 Change

ISM (Institute for Supply Management)

A reading above 50% indicates that the

manufacturing economy is generally

expanding; below 50% indicates that it is

generally contracting.

53.2%

51.3%

+1.9%

Non-farm Payrolls (in thousands) +137,699 +137,524 +175

Unemployment 6.7% 6.6% +0.1%

03/14 02/14 Change

Consumer Confidence (in points) 82.3 78.3 +4.0

U.S. Supply and Demand Data (per EIA and Baker Hughes)

12/13 01/14 Change

Lower-48 Production (Bcf/day) 74.80 75.97 -1.17

2014 2013 Difference

Demand (Bcf/day) 71.26 71.33 -.07

Current 1 Year Ago Difference

Storage Inventories (as of 3/21/14)

896 Bcf 1,795 Bcf -899 Bcf

Natural Gas Drilling Rig Count (as of 3/28/14)

318 Rigs 389 Rigs -71 Rigs

Natural Gas Commitment of Traders Report (as of March 25, 2014)

This data represents the basic Commitment of Traders weekly report. These categories are broken further in disaggregated COT report.

Long Position: Indicates the purchase of a contract Short Position: Indicates the sale of a contract

Non-commercial: Large speculative traders - Managed Money: Commodity Trading Advisors, Commodity Pool

Operators and Hedge Funds - Other Reportables: All Other Speculators

Commercial: Large hedgers (producers, consumers, etc.) - Producer/Merchant/Processor/User: An entity that predominantly

engages in the production, processing, packing or handling of the physical commodity

- Swap Dealers: An entity that uses the futures markets to manage or hedge the risk associated with physical prices

Non-reportable: Small speculators and small hedgers

Long Short Net

Non-commercial 303,535 363,318 (59,783)

Commercial 348,029 339,392 8,637

Non-reportable 76,291 25,145 51,146

March 2014 Page 10_ Republished from 3/5/14 Weekly Edition

March 2014 Expiration Highlights

Historical Natural Gas NYMEX Expiration Prices

Quick March Expiration Recap

The last month of trading for the March 2014 natural gas NYMEX expiration was a roller coaster ride. It made its

front-month debut on January 30, opening at $5.467, but hit a low of $4.900 per MMBtu that same day. It rallied to

$5.737 per MMBtu on February 5, but then fell to a low of $4.563 per MMBtu by February 10. It traded in the mid-$4’s for four days and then staged a three-day rally, reaching a high of $6.40 per MMBtu on February 20. It

reached a high of $6.493 per MMBtu on February 24, and then tumbled precipitously to expire at $4.855 per

MMBtu on February 26.

Last Three Days of

Trading for

March 2014

2/27/14: $4.855 (Expiration)

2/26/14: $5.096

2/25/14: $5.445

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

JAN $6.213 $11.431 $5.838 $7.172 $6.136 $5.814 $4.216 $3.084 $3.354 $4.407

FEB $6.288 $8.400 $6.917 $7.996 $4.476 $5.274 $4.316 $2.678 $3.226 $5.557

MAR $6.304 $7.112 $7.547 $8.930 $4.056 $4.816 $3.793 $2.446 $3.427 $4.855

APR $7.323 $7.233 $7.558 $9.578 $3.631 $3.842 $4.240 $2.191 $3.976

MAY $6.748 $7.198 $7.508 $11.280 $3.321 $4.271 $4.377 $2.036 $4.151

JUN $6.123 $5.925 $7.591 $11.916 $3.538 $4.155 $4.326 $2.429 $4.148

JUL $6.976 $5.887 $6.929 $13.105 $3.949 $4.717 $4.357 $2.774 $3.707

AUG $7.647 $7.042 $6.110 $9.217 $3.379 $4.774 $4.370 $3.010 $3.459

SEP $10.847 $6.816 $5.430 $8.394 $2.843 $3.651 $3.857 $2.634 $3.566

OCT $13.907 $4.201 $6.423 $7.472 $3.730 $3.837 $3.759 $3.023 $3.498

NOV $13.832 $7.153 $7.269 $6.469 $4.289 $3.292 $3.524 $3.471 $3.497

DEC $11.180 $8.318 $7.203 $6.888 $4.486 $4.267 $3.364 $3.696 $3.818

$1.500

$2.000

$2.500

$3.000

$3.500

$4.000

$4.500

$5.000

$5.500

$6.000

$6.500

$7.000

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

$ / M

MB

tu

Historical NYMEX Expiration Prices: 2010 - 2014

2014

2013

2012

2011

2010

5-Year Avg.

3-Year Avg.

March 2014 Page 11_

NYMEX Pricing Data

This graph illustrates the

daily settlement prices for

the front-month natural

gas NYMEX contract

compared to the 12-month

and 24-month NYMEX

strip price.

The chart on the left pro-

vides various settlement

prices for specific months

and/or specific time-

frames, i.e., a strip price.

Settlement Price: The Henry Hub is the pricing

point for natural gas futures on the NYMEX. The

settlement price is the price established by the NY-

MEX Exchange Settlement Committee at the close of

each trading session and are used as benchmarks for

the entire North American natural gas market.

Front-Month: The front-month price is the price of

the most current month trading.

Strip Price: A strip price is the simple average of

several months. For example, the 3-month strip price

is the simple average of the settlement prices for May

2014, June 2014, and July 2014. By comparison, the

12-month strip is the simple average of the monthly

settlement prices for May 2014 through April 2014.

3-Month $4.521

6-Month $4.532

12-Month $4.561

24-Month $4.371

Front-Month $4.485

06/14-10/14 $4.541

11/14-3/15 $4.684

04/15-10/15 $4.100

Jun-Dec 14 $4.571

Jan-Dec 15 $4.271

Jan-Dec 16 $4.183

NYMEX Strip Prices

(Settlement on 3/28/14)

$3.750

$4.250

$4.750

$5.250

$5.750

$6.250

$6.750

02/0

3/1

4

02/0

5/1

4

02/0

7/1

4

02/0

9/1

4

02/1

1/1

4

02/1

3/1

4

02/1

5/1

4

02/1

7/1

4

02/1

9/1

4

02/2

1/1

4

02/2

3/1

4

02/2

5/1

4

02/2

7/1

4

03/0

1/1

4

03/0

3/1

4

03/0

5/1

4

03/0

7/1

4

03/0

9/1

4

03/1

1/1

4

03/1

3/1

4

03/1

5/1

4

03/1

7/1

4

03/1

9/1

4

03/2

1/1

4

03/2

3/1

4

03/2

5/1

4

03/2

7/1

4

Per M

MB

tu

Natural Gas NYMEX Pricing: 2/3/14-3/28/14

Front Month

12-Month Strip

24-Month Strip

March 2014 Page 12_

Daily Trading Data: Highs and Lows

This graph above illustrates price volatil-

ity. The vertical bar represents the trading

range of the front-month natural gas NY-

MEX contract each day. The red diamond

represents the daily natural gas NYMEX

settlement price at the Henry Hub in Lou-

isiana. These settlement prices are used

as benchmarks for the entire North Ameri-

can natural gas market.

NYMEX

Contract

Trading

Trading

Date

Daily

Open

Daily

High

Daily

Low

Daily

Settlement

Mar 2014 02/26/14 $4.957 $5.005 $4.660 $4.855

Mar 2014 02/27/14 $4.522 $4.567 $4.441 $4.511

Apr 2014 02/28/14 $4.480 $4.658 $4.451 $4.609

Apr 2014 03/03/14 $4.690 $4.736 $4.463 $4.492

Apr 2014 03/04/14 $4.499 $4.676 $4.490 $4.667

Apr 2014 03/05/14 $4.657 $4.722 $4.507 $4.523

Apr 2014 03/06/14 $4.566 $4.695 $4.506 $4.662

Apr 2014 03/07/14 $4.641 $4.681 $4.566 $4.618

Apr 2014 03/10/14 $4.623 $4.733 $4.556 $4.651

Apr 2014 03/11/14 $4.658 $4.683 $4.572 $4.605

Apr 2014 03/12/14 $4.604 $4.631 $4.448 $4.490

Apr 2014 03/13/14 $4.493 $4.496 $4.355 $4.383

Apr 2014 03/14/14 $4.375 $4.439 $4.341 $4.425

Apr 2014 03/17/14 $4.504 $4.587 $4.482 $4.536

Apr 2014 03/18/14 $4.515 $4.549 $4.446 $4.456

Apr 2014 03/19/14 $4.467 $4.504 $4.420 $4.484

Apr 2014 03/20/14 $4.471 $4.474 $4.349 $4.369

Apr 2014 03/21/14 $4.377 $4.378 $4.286 $4.313

Apr 2014 03/24/14 $4.312 $4.350 $4.262 $4.276

Apr 2014 03/25/14 $4.288 $4.430 $4.263 $4.411

Apr 2014 03/26/14 $4.406 $4.428 $4.352 $4.402

Apr 2014 03/27/14 $4.395 $4.615 $4.372 $4.584

May 2014 03/28/14 $4.517 $4.568 $4.471 $4.485

NYMEX Pricing Data: Highs and Lows

$4.000

$4.500

$5.000

$5.500

$6.000

$6.500

2/3

/2014

2/6

/2014

2/9

/2014

2/1

2/2

014

2/1

5/2

014

2/1

8/2

014

2/2

1/2

014

2/2

4/2

014

2/2

7/2

014

3/2

/2014

3/5

/2014

3/8

/2014

3/1

1/2

014

3/1

4/2

014

3/1

7/2

014

3/2

0/2

014

3/2

3/2

014

3/2

6/2

014

$ / M

MB

tu

NYMEX Daily Highs and Lows: 2/1/14-3/28/14

The chart on the left illustrates daily high/

low data. The Daily Open indicates the

price of the contract when the trading day

began. The Daily High and Daily Low

represent the daily trading range. The

Daily Settlement, also referred to as the

closing price, represents the price at the

end of the trading day. The Daily Open

price is usually close to the Daily Settle-

ment price from the day before.

March 2014 Page 13_

Recent NYMEX Gas Futures Pricing

Date Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15

02/26/14 $4.544 $4.653 $4.744 $4.697 $4.580 $4.005 $3.960 $3.974

02/27/14 $4.553 $4.661 $4.748 $4.698 $4.576 $4.018 $3.972 $3.986

02/28/14 $4.605 $4.705 $4.791 $4.734 $4.610 $4.049 $4.000 $4.013

03/03/14 $4.517 $4.624 $4.710 $4.659 $4.543 $4.030 $3.987 $4.000

03/04/14 $4.630 $4.733 $4.813 $4.758 $4.635 $4.046 $3.999 $4.011

03/05/14 $4.546 $4.652 $4.734 $4.684 $4.566 $4.031 $3.988 $4.000

03/06/14 $4.648 $4.752 $4.833 $4.779 $4.650 $4.081 $4.036 $4.048

03/07/14 $4.628 $4.736 $4.819 $4.766 $4.640 $4.089 $4.040 $4.051

03/10/14 $4.644 $4.754 $4.838 $4.785 $4.659 $4.115 $4.062 $4.072

03/11/14 $4.608 $4.714 $4.795 $4.743 $4.621 $4.108 $4.058 $4.070

03/12/14 $4.524 $4.635 $4.719 $4.676 $4.563 $4.093 $4.052 $4.066

03/13/14 $4.447 $4.558 $4.642 $4.607 $4.506 $4.068 $4.037 $4.054

03/14/14 $4.487 $4.593 $4.676 $4.638 $4.535 $4.097 $4.067 $4.085

03/17/14 $4.567 $4.679 $4.760 $4.712 $4.602 $4.114 $4.079 $4.093

03/18/14 $4.512 $4.623 $4.704 $4.657 $4.546 $4.085 $4.055 $4.071

03/19/14 $4.550 $4.661 $4.742 $4.694 $4.584 $4.110 $4.078 $4.096

03/20/14 $4.448 $4.562 $4.643 $4.601 $4.506 $4.073 $4.046 $4.064

03/21/14 $4.404 $4.524 $4.606 $4.566 $4.472 $4.059 $4.034 $4.054

03/24/14 $4.382 $4.500 $4.582 $4.543 $4.447 $4.044 $4.020 $4.041

03/25/14 $4.500 $4.616 $4.697 $4.651 $4.548 $4.097 $4.070 $4.089

03/26/14 $4.495 $4.612 $4.696 $4.652 $4.545 $4.093 $4.066 $4.085

03/27/14 $4.623 $4.736 $4.816 $4.767 $4.644 $4.131 $4.092 $4.111

03/28/14 $4.589 $4.700 $4.780 $4.733 $4.620 $4.117 $4.074 $4.090

Date Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14

02/26/14 $4.855 $4.541 $4.464 $4.484 $4.519 $4.508 $4.482 $4.495

02/27/14 $4.511 $4.474 $4.495 $4.529 $4.518 $4.493 $4.505

02/28/14 $4.609 $4.550 $4.568 $4.599 $4.586 $4.557 $4.565

03/03/14 $4.492 $4.455 $4.478 $4.513 $4.501 $4.467 $4.476

03/04/14 $4.667 $4.583 $4.600 $4.634 $4.622 $4.586 $4.593

03/05/14 $4.523 $4.484 $4.505 $4.539 $4.529 $4.496 $4.505

03/06/14 $4.662 $4.603 $4.622 $4.653 $4.641 $4.604 $4.611

03/07/14 $4.618 $4.567 $4.589 $4.622 $4.615 $4.580 $4.587

03/10/14 $4.651 $4.576 $4.601 $4.636 $4.629 $4.594 $4.602

03/11/14 $4.605 $4.544 $4.567 $4.602 $4.595 $4.559 $4.567

03/12/14 $4.490 $4.441 $4.470 $4.508 $4.505 $4.472 $4.481

03/13/14 $4.383 $4.355 $4.384 $4.424 $4.424 $4.395 $4.404

03/14/14 $4.425 $4.403 $4.433 $4.473 $4.469 $4.439 $4.447

03/17/14 $4.536 $4.492 $4.519 $4.554 $4.548 $4.514 $4.523

03/18/14 $4.456 $4.424 $4.454 $4.492 $4.490 $4.458 $4.468

03/19/14 $4.484 $4.458 $4.488 $4.526 $4.524 $4.494 $4.505

03/20/14 $4.369 $4.349 $4.380 $4.418 $4.417 $4.391 $4.402

03/21/14 $4.313 $4.297 $4.329 $4.367 $4.366 $4.343 $4.355

03/24/14 $4.276 $4.272 $4.305 $4.343 $4.341 $4.320 $4.333

03/25/14 $4.411 $4.414 $4.443 $4.479 $4.474 $4.447 $4.457

03/26/14 $4.402 $4.395 $4.424 $4.461 $4.457 $4.434 $4.447

03/27/14 $4.584 $4.538 $4.565 $4.600 $4.595 $4.568 $4.579

03/28/14 $4.485 $4.519 $4.558 $4.556 $4.531 $4.543

March 2014 Page 14_

Bear Market: Market in which prices are declining.

Bull Market: Market in which prices are rising.

Cash Market: The market for a cash commodity where the actual

physical product is traded.

City Gate: The physical location where the interstate pipeline intercon-

nects with the utilities’ distribution pipeline. At this point, the pipeline

pressure is lowered and the natural gas is odorized.

Commercial and Trade Accounts: Companies involved in the produc-

tion, processing, or merchandising of a commodity. These typically have

their own group of traders in the physical trading ring but sometimes use

other traders as well to try and keep their trading patterns more secretive.

Commitment of Traders Report: A report released each Friday by the

CFTC, which details the volume of long and short positions.

Expiration Date: The date and time after which trading in a futures or

options contract terminates, and after which all option contract rights or

obligations become null and void.

Expiration Price: The settlement price of the commodity on the expira-

tion date.

Fundamental Analysis: The study of pertinent supply and demand

factors, which influence the specific price behavior of commodities;

includes physical factors like storage inventories and weather. (See also

Technical Analysis)

Liquidation: The closing out of a futures position; this term typically

relates to the closing out of a long position while the term used to denote

the closing out of a short position is more often referred to as covering.

Long Position: As it relates to the futures market, one who has bought a

futures contract to establish a market position that obligates the holder to

take delivery unless the contract is liquidated with an offsetting sale.

New York Mercantile Exchange (NYMEX): The commodity ex-

change based in New York City where natural gas futures contracts are

traded. Other energy futures are traded on this exchange as well.

Non-commercials: As it relates to the futures market, non-commercials

are generally speculative traders.

OPEC (Organization of the Petroleum Exporting Countries): The

acronym for the Organization of the Petroleum Exporting Countries that

has organized for the purpose of negotiating with oil companies on mat-

ters of oil production, prices, and future concession rights. Current mem-

bers (as of the date of writing this definition) are Algeria, Indonesia, Iran,

Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emir-

ates, and Venezuela.

Open Interest: Futures contracts during a given period of time,

which have not been satisfied by an offsetting sale, purchase or

actual delivery. (Also referred to as open commitment.)

Range Bound: A term that is used when a commodity seems to be

unable to move above or below a certain trading price range.

Settlement Price: The price established by the NYMEX Exchange

Settlement Committee at the close of each trading session to be used

by the clearinghouse in determining net gains or losses, margin

requirements, and the next day’s price limits; calculating the

weighted average of prices as the market nears closing derives the

settlement price.

Short Position: As it relates to the futures market, one who has

sold a futures contract to establish a market position that obligates

the seller to make delivery at the agreed upon price unless the con-

tract is liquidated with an offsetting purchase. (Opposite of Long

Position.)

Spot Market: The cash market. Natural gas spot market trades are

done on a monthly or daily basis, whereas power market spot mar-

ket trades are done on an hourly basis.

Storage: Facility used for the storage of natural gas; usually a

cavern carved out of natural salt domes or depleted natural gas res-

ervoirs into which natural gas can be reinvested and produced with

minimal loss; storage inventories are utilized particularly in the

Northeast and Midwest to help meet natural gas heating demand

needs during the winter months.

Technical Analysis: An approach to forecasting commodity prices,

which examines patterns of price change, rates of change, and

changes in volume of trading and open interest, without regard to

underlying fundamental market factors.

Trading Volume: In the futures market, the number of transactions

in a contract made during a specified period of time.

This publication is published monthly by Energy Solutions, Inc. 2386 Dahlk Circle, Verona, WI 53593

Tel: (608) 848-9589 / Fax: (608) 848-6256 Website: www.energysolutionsinc.com

Annual Subscriptions: $695 via E-mail / $790 via U.S. Mail

The Monthly Advisor is published each month. Subscribers also receive 48 editions of The Weekly Advisor, 12 editions of Fast Facts, and periodic Pricing Alerts and Storm Alerts. © Copyright 2014. All rights reserved. This publication can be redistributed to other em-ployees of the subscribing company. Redistribution to non-company employees, independent/outside contractors, affiliates, customers or consultants is expressly prohibited.

The information contained herein ultimately relates to the cost and pricing of physical natural gas supplies. Past results are not necessar-ily indicative of future results. There is no guarantee that the informa-tion contained herein will result in profitable trades. No such guarantee can be given nor should be implied. The information provided herein should not be construed as an offer to buy or sell futures, options or commodities. While such information is taken from select sources which Energy Solutions, Inc. believes to be reliable, Energy Solutions, Inc. has not verified such information and makes no representation or warranty as to, and will not be responsible for, its accuracy or complete-ness. The information, views and opinions contained herein are pre-sented for the convenience of the reader and are provided on the condi-tion that errors or omissions therein, or reliance thereon, shall not be made the basis of a claim, demand or cause of action. The views and opinions expressed herein are for informational purposes only, are in no way guaranteed, are expressed as of a specific time and are subject to change at any time without notice.

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