If weak gas and oil prices were supposed to devastate the industry, Gazprom (OGZPY) is one of the last companies to hear about it, as it has been producing great earnings. And with a P/E ratio of about 5, it is a great value play.
There have been two major catalysts behind Gazprom's great year. The most important has been the shrinking value of the ruble, and second, was the decision by Russia to lower export taxes earlier in 2015. That combination has driven nice results for the natural gas and oil giant.
In its latest quarter it generated $4.75 billion in net profit, a gain of 29 percent year-over-year. It also enjoyed an annual growth rate of 50 percent in the first half.
Investors need to understand that even in the midst of a low-price or depressed commodity market, there is more than one way for a company to make money. Those able to identify them, as in the case of Gazprom, will get in before prices are bid up.
The reason why Gazprom has been doing so well is its costs mostly are domestic, which means they're traded in rubles, while its sale are primarily in the U.S. dollar and euro. The difference in value between them is what is driving Gazprom's success.
Add to that its continual strong performance in Europe, which represents approximately 56 percent of its export business, and the deals with China which will be a serious revenue and earnings source for many years, and you can see why Gazprom should continue to surprise to the upside.
As for the ruble, it's under pressure from low gas prices, but when it moves up again, it will take the ruble with it. That means, unless the ruble really soars in response to a rise in gas prices, margin and earnings should continue to do very well.
In the meantime, it's good entry point for Gazprom, and if you believe there is more room for gas prices to drop, it'll get even better. But as it is, this is a great time to think seriously about taking a position in Gazprom, as risk/reward is aligned nicely.
Showing posts with label Natural Gas. Show all posts
Showing posts with label Natural Gas. Show all posts
Wednesday, September 2, 2015
Tuesday, May 7, 2013
Natural Gas and State Renewal Energy Requirements
At least 16 states are looking to reduce the amount of power generated from solar and wind because of the high costs of the renewable energy and the abundance of natural gas in the United States. A number of energy companies with significant exposure to natural gas could be huge winners if this is what unfolds.
See at Seeking Alpha why this could dramatically effect share price of companies with large natural gas exposure.
See at Seeking Alpha why this could dramatically effect share price of companies with large natural gas exposure.
Thursday, February 28, 2013
Study Shows Gas Production to Grow for Decades
A study by Alfred P. Sloan Foundation found that natural gas in the United States will increase in growth for the next 30 years before leveling off.
Even after that, according to the study, natural gas will only slightly taper off.
The data was not only talking about volumes of natural gas, but the cost of production as well.
For example, a million British thermal units at this time costs approximately $3.43 to produce, with estimates are future production will only rise to about $4 per million British thermal units.
Data were drawn from 15,000 wells drilled in the Barnett Shale formation in northern Texas by the University of Texas under the auspices of the Alfred P. Sloan Foundation. It is one of the first comprehensive studies performed to measure the economics of fracking in shale formations.
"We are looking at multi, multi decades of growth," said Scott Tinker, director of the Bureau of Economic Geology at the university and who headed up the study.
As for investment implications, the Barnett shale is complicated when broken down from well to well. There are some that do very well and others that have little natural gas in them. That means some companies will profit and others could be dragged down by the variable quantities scattered throughout the basin and over the numerous wells already dug.
Overall, the study concludes there is about 44 trillion cubic feet of natural gas that can be recovered in Barnett alone.
Tinker said to get the gas there is a need and room for about 13,000 more wells in the Barnett area.
As for other shale resources across America, which are undergoing similar studies, it is estimated there will be tens of thousands more natural gas wells drilled to access the huge resource.
Preliminary estimates of these other shale formations are what the growth projections through 2040 are based on.
Even after that, according to the study, natural gas will only slightly taper off.
The data was not only talking about volumes of natural gas, but the cost of production as well.
For example, a million British thermal units at this time costs approximately $3.43 to produce, with estimates are future production will only rise to about $4 per million British thermal units.
Data were drawn from 15,000 wells drilled in the Barnett Shale formation in northern Texas by the University of Texas under the auspices of the Alfred P. Sloan Foundation. It is one of the first comprehensive studies performed to measure the economics of fracking in shale formations.
"We are looking at multi, multi decades of growth," said Scott Tinker, director of the Bureau of Economic Geology at the university and who headed up the study.
As for investment implications, the Barnett shale is complicated when broken down from well to well. There are some that do very well and others that have little natural gas in them. That means some companies will profit and others could be dragged down by the variable quantities scattered throughout the basin and over the numerous wells already dug.
Overall, the study concludes there is about 44 trillion cubic feet of natural gas that can be recovered in Barnett alone.
Tinker said to get the gas there is a need and room for about 13,000 more wells in the Barnett area.
As for other shale resources across America, which are undergoing similar studies, it is estimated there will be tens of thousands more natural gas wells drilled to access the huge resource.
Preliminary estimates of these other shale formations are what the growth projections through 2040 are based on.
Friday, February 15, 2013
Why Coal Demand is Falling in America
Besides the obvious attack by the government on the coal industry, with regulations resulting in high operational cost designed to cripple coal in America, there are some other reasons why coal has been diminishing in the midst of a surge in coal demand outside of America.
In states like Kentucky and West Virginia, for example, easily accessed coal has already been mined, resulting in higher costs to mine the thinner deposits.
The other major challenge is the discovery and supply of natural gas in America, which has resulted in cheaper energy, putting pressure on coal as a fuel source in the United States.
One area that coal should continue to do very well in is high-grade metallurgical coal, which is used to produce steel. This won't save the coal industry in America, but it will keep some regions of the country in good condition.
Another key element is the lack of export terminals to meet the growing demand of coal in every other country in the world outside of the United States. At this time there are projects in the works to build five coal export terminals in Washington and Oregon to help meet that growing need. Most coal companies benefiting from that will be producing in the western part of the U.S. It is uncertain as to how many of those will be built and how long it'll take to bring them to operational status.
Projections by the International Energy Agency show that coal demand will jump by 1.2 billion tons over the next several years, which should make it the No. 1 global fuel source at that time.
So while coal demand is falling in America, every other country on the face of the planet that uses coal has been increasing it as an energy source for their needs.
China is the driving force behind coal demand, with India boosting its coal usage as well. For the United States, at this time Europe is the biggest importer of coal from the country.
If this continues for years into the future, which it undoubtedly will, coal demand in America could rise again, but it'll take many years before that happens. For now, investors should look for coal companies positioned to primarily serve the Chinese market, as Chinese demand accounts for half or more of all coal demand in the world as of this writing.
In states like Kentucky and West Virginia, for example, easily accessed coal has already been mined, resulting in higher costs to mine the thinner deposits.
The other major challenge is the discovery and supply of natural gas in America, which has resulted in cheaper energy, putting pressure on coal as a fuel source in the United States.
One area that coal should continue to do very well in is high-grade metallurgical coal, which is used to produce steel. This won't save the coal industry in America, but it will keep some regions of the country in good condition.
Another key element is the lack of export terminals to meet the growing demand of coal in every other country in the world outside of the United States. At this time there are projects in the works to build five coal export terminals in Washington and Oregon to help meet that growing need. Most coal companies benefiting from that will be producing in the western part of the U.S. It is uncertain as to how many of those will be built and how long it'll take to bring them to operational status.
Projections by the International Energy Agency show that coal demand will jump by 1.2 billion tons over the next several years, which should make it the No. 1 global fuel source at that time.
So while coal demand is falling in America, every other country on the face of the planet that uses coal has been increasing it as an energy source for their needs.
China is the driving force behind coal demand, with India boosting its coal usage as well. For the United States, at this time Europe is the biggest importer of coal from the country.
If this continues for years into the future, which it undoubtedly will, coal demand in America could rise again, but it'll take many years before that happens. For now, investors should look for coal companies positioned to primarily serve the Chinese market, as Chinese demand accounts for half or more of all coal demand in the world as of this writing.
Friday, October 19, 2012
Parets Likes Natural Gas, Coal, Over Crude
Saying crude oil at this time "is a mess," J.C. Parets said in regard to energy and commodities in general, investors need to look elsewhere for gains, as he sees the fall from $100 as a trend that is likely to continue at this time.
Parets, who is the founder of Eagle Bay Capital, sees the energy place to be as natural gas, and says coal is also worth a look, as it could move up on the sails of natural gas.
He said, "If we're right on natural gas and continue to see higher prices, I think we should continue to see higher prices for coal as well."
The trend that needs to be followed at this time in the sector is natural gas versus oil, not crude oil in and of itself.
The reason natural gas is so appealing to Parets is it continues to be way below its historic 10-year average in relationship to oil, which has been about 10-to-1. In the spring of 2012 it jumped to 54-to-1.
Thursday, October 4, 2012
Oil Prices Jump on Mideast Turmoil, Refinery Fires
Several events on Thursday caused the price of crude oil futures to rise, as Turkey attacked Syria and refinery fires in Texas and Russia helped oil to climbed by four percent over Wednesday.
In the Middle East, Turkey hit Syria with retaliatory strikes after parts of the southeastern part of Turkey were shelled yesterday.
The Turkish parliament also sent a message to Syria by approving further strikes if Syrian internal battles end up spilling over into Turkey again.
Concerns that things could escalate and oil supply disruptions could result are the main impetus behind the rise in prices. Shorts started covering their positions after the plunge in oil prices on Wednesday.
Oil Refinery Fires
As for the other events, the refinery of Exxon Mobil (XOM) in Baytown, Texas, which is the largest refinery operating in the U.S. at this time, caught on fire. It produces an average of 560,000 barrels a day.
In Russia, a refinery in Saratov, which produces about 130,000 barrels a day, also caught fire.
Oil settled at $91.71 a barrel, jumping $3.57, or 4 percent, on the New York Mercantile Exchange.
The national average for a gallon of regular gasoline rose to $3.784, up two-tenths of a cent from Wednesday, and 38 cents in comparison to a year ago, according to AAA.
Brent crude increased by $4.41, or 4.1 percent, to $112.58.
Natural gas was up a penny to $3.406 per 1,000 cubic feet.
Heating oil climbed 12.2 cents, or 4 percent, to $3.1884 a gallon.
Tuesday, October 2, 2012
Why Metals, Energy Look Attractive Going Forward
With the misguided commitment from major central banks around the world to "stimulating" the economies of the countries or regions they are based in, especially the euro zone, United States and Japan (China will probably stimulate soon), it predicates the probability that energy and base metal commodities, along with gold and silver, should push up in price over the next several years, with some possibly extending even longer, such as in the case of silver.
Even if there is a further global economic slowdown, the fallout from the stimulus efforts will start to point to resources and resource companies as one of the few viable places to place one's capital.
As measured by inflationary pressures, oil, gas and other commodities get more attractive as the U.S. dollar falls in value, as it will continue to do as money continues to be created out of thin air.
The caveat will be how much competing currencies fall in relationship to the U.S. dollar.
Successful commodity investors in the near future will be those who properly analyze the valuations of a particular commodity; getting in before it begins its upward run in price.
Some commodities at this time are overbought, while others are still available at a good price.
For example, natural gas appears to be at, or close to a bottom, so there is, for the most part over time, only one place to go, and that's up.
And even if there is still a little room to move down, the price of natural gas for long-term investors is very attractive, and those entering now should reap significant rewards over the next several years.
Oil on the other hand may be in for some rough times, as it may be on the opposite end of the spectrum, possibly ready to pull back significantly after years of high prices.
The geopolitical situation will weigh more on the prices than other factors, as many energy companies have improved operations to the point where there is a lot of oil available at lower costs than in the recent past.
So with the certainty the Europe and the United States will continue to inflate through fiat money, and Japan continuing on the course it set a couple of decades ago, there is little reason to believe a number of commodities won't continue to be among the best performers going forward, especially in precious and base
metals, as well as in some energy segments.
Natural Gas Has Reached Bottom Says Brandt
Natural gas has reached a bottom according to commodity expert Peter Brandt, who say over the next several years natural gas prices should trend up.
Brandt says the significance of reaching a major bottom is the low price is now in place.
He says natural gas has been in a bear trend for 6-1/2 years, citing the fall in price from 15.780 in December 2005 for a nearby futures contract, down to 1.902 as of April 2012. That constitutes a plunge of 88 percent.
Brandt sees the first target in sight as breaking the 6.000 mark.
His recommendation is to buy on dips in the 10 percent to 15 percent range.
Of course there will be ups and downs during this upward trend, which is why pullbacks should be considered buying opportunities, as over time natural gas prices appear poised to start a good run up in price.
Friday, August 3, 2012
BHP (BHP) Writes Down $3.3 Billion
BHP Billiton (BHP) CEO Marius Kloppers announced the company has written down 3.3 billion on its gas and nickel assets.
Its gas assets in the Fayetteville shale-gas holdings of the company had a charge of $2.84 billion against it, while its Western Australia nickel sites were written down by $450 million.
The company said Klopper and petroleum business CEO Mike Yeager won't receive bonuses this year as a consequence of the writedowns. Both men requested that those actions be taken.
Companies jumping onto the shale gas bonanza have taken hard hits after the abundance of natural gas has driven the price down to 10-year lows recently.
BHP will continue to struggle with this because of the high price it paid for the gas assets, which will require a significant rebound in gas prices before it turns a profit.
The good news for BHP is the writedown was not as much as most had been looking for, coming in at the lower end of analysts' estimates, which were in a range of $3 billion to $5 billion.
Kloppers and Yeager are now moving drilling operations primarily to the Eagle Ford and Permian fields.
It is thought the company may seek to divest itself of its nickel business, but that would probably not work out well for them in a weak economic environment.
On the NYSE, BHP was trading at $67.8, up $1.78, or 2.69 percent, as of 10:33 AM EST.
Its gas assets in the Fayetteville shale-gas holdings of the company had a charge of $2.84 billion against it, while its Western Australia nickel sites were written down by $450 million.
The company said Klopper and petroleum business CEO Mike Yeager won't receive bonuses this year as a consequence of the writedowns. Both men requested that those actions be taken.
Companies jumping onto the shale gas bonanza have taken hard hits after the abundance of natural gas has driven the price down to 10-year lows recently.
BHP will continue to struggle with this because of the high price it paid for the gas assets, which will require a significant rebound in gas prices before it turns a profit.
The good news for BHP is the writedown was not as much as most had been looking for, coming in at the lower end of analysts' estimates, which were in a range of $3 billion to $5 billion.
Kloppers and Yeager are now moving drilling operations primarily to the Eagle Ford and Permian fields.
It is thought the company may seek to divest itself of its nickel business, but that would probably not work out well for them in a weak economic environment.
On the NYSE, BHP was trading at $67.8, up $1.78, or 2.69 percent, as of 10:33 AM EST.
Monday, November 8, 2010
Chesapeake Energy (NYSE:CHK) Continues to Struggle with Low Natural Gas Prices
Struggling in the midst of depressed natural gas prices, Chesapeake Energy (NYSE:CHK) has its rating downgraded by BMO Capital from "Outperform" to "Market Perform."
Over the last six months Chesapeake has dropped in share price, and over the last several months they've pretty much remained level.
Chesapeake closed Friday at $22.27, losing $0.02, or 0.09 percent. BMO dropped their price target on them from $30 to $26.
A growing number of natural gas companies have looked to the oil sector to drive up margins and earnings in the tough natural gas conditions, which have far too much supply at this time, and probably will have for years.
Over the last six months Chesapeake has dropped in share price, and over the last several months they've pretty much remained level.
Chesapeake closed Friday at $22.27, losing $0.02, or 0.09 percent. BMO dropped their price target on them from $30 to $26.
A growing number of natural gas companies have looked to the oil sector to drive up margins and earnings in the tough natural gas conditions, which have far too much supply at this time, and probably will have for years.
NRG Energy (NYSE:NRG) Faces Upside Risk if Gas Comes Back
Even though Deutsche Bank (NYSE:DB) seems some risk associated with NRG Energy (NYSE:NRG) because of their exposure to gas if it surges back, they still raised their rating on the energy company from "Sell" to "Hold," citing weak catalysts no longer a factor.
Deutsche said, "We upgrade NRG to Hold from Sell with the stock having dropped ~8% and lagged the market and IPP peers since mid-September (S&P 500 up 8%). Our key catalyst of weak initial '11 guidance has also now passed. While we are moving to Hold we remain cautious given a weak outlook driven by hedge roll-offs, continued overhang from the STP nuclear project, and a fundamental valuation of $19/sh or modestly below the current price. We do not find further downside potential to be enough, and see upside risk if gas rebounds and/or STP is cancelled."
NRG just finished the process of acquiring Green Mountain Energy Company for a cash deal of $350 million.
The company closed Friday at $20.10, gaining $0.17, or 0.85 percent. They have a market cap of a little over $5 billion.
Deutsche said, "We upgrade NRG to Hold from Sell with the stock having dropped ~8% and lagged the market and IPP peers since mid-September (S&P 500 up 8%). Our key catalyst of weak initial '11 guidance has also now passed. While we are moving to Hold we remain cautious given a weak outlook driven by hedge roll-offs, continued overhang from the STP nuclear project, and a fundamental valuation of $19/sh or modestly below the current price. We do not find further downside potential to be enough, and see upside risk if gas rebounds and/or STP is cancelled."
NRG just finished the process of acquiring Green Mountain Energy Company for a cash deal of $350 million.
The company closed Friday at $20.10, gaining $0.17, or 0.85 percent. They have a market cap of a little over $5 billion.
Friday, October 22, 2010
Natural Gas Disrupting Everything, Including Own Industry
In one of the most interesting and possibly long-term profitable plays at this time is the natural gas sector, which is not only disrupting other energy sectors, but is in fact disrupting itself.
For example, not that long ago nuclear energy looked like it was about to make a huge comeback, and in some places that may remain true, for example China, which has numerous nuclear plants on the drawing board.
But the recent discovery of the enormous amount of natural gas reserves there are in the United States, and other parts of the world, has made nuclear yesterday's energy news, as well as wind farms, and more than likely, ultimately the high-price solar sector.
What's more fascinating, are those companies with heavy natural gas exposure have disrupted themselves, as those who want to increase margins, and probably survive, are spending on increasing their oil exposure.
An amazing development when you think of it. The incredible amount of natural gas reserves are pushing us back to oil again. No matter how hard some may attempt to deny that, it's the absolute truth.
Natural gas companies will have to become experts at cutting costs in that segment, as supply is enough to easily last for decades, and possibly into the far future beyond that. This is talking about known reserves, which have increased exponentially.
In the short term oil remains the key energy source, although coal is right up their with it as far as percentage of use for energy in general.
Coal accounts for about 48 percent of electricity production in the U.S., but is expected to pull back to about 44 percent by 2015. Natural gas is expected to increase from 21 percent of electricity production to 25 percent by 2015.
The only thing that could upset this fantastic scenario for low price energy is the evil of radical environmentalists, who are devastating the United States and other parts of the world through lawsuits and pressuring lawmakers to create regulations which basically destroy energy use of any kind.
The only thing these hypocrites like is wind power, which of course, unknown to most, destroy wildlife, especially birds in bats at levels which would shock most people if the story was told.
BP's (NYSE:BP) small effect on animals and sea life makes them look like guardians of the earth in comparison to wind turbines.
This is where we should all draw the line and fight back so hard as to destroy these evil organizations and people who continue to hate the human race and inexpensive energy that makes their lives easier.
For example, not that long ago nuclear energy looked like it was about to make a huge comeback, and in some places that may remain true, for example China, which has numerous nuclear plants on the drawing board.
But the recent discovery of the enormous amount of natural gas reserves there are in the United States, and other parts of the world, has made nuclear yesterday's energy news, as well as wind farms, and more than likely, ultimately the high-price solar sector.
What's more fascinating, are those companies with heavy natural gas exposure have disrupted themselves, as those who want to increase margins, and probably survive, are spending on increasing their oil exposure.
An amazing development when you think of it. The incredible amount of natural gas reserves are pushing us back to oil again. No matter how hard some may attempt to deny that, it's the absolute truth.
Natural gas companies will have to become experts at cutting costs in that segment, as supply is enough to easily last for decades, and possibly into the far future beyond that. This is talking about known reserves, which have increased exponentially.
In the short term oil remains the key energy source, although coal is right up their with it as far as percentage of use for energy in general.
Coal accounts for about 48 percent of electricity production in the U.S., but is expected to pull back to about 44 percent by 2015. Natural gas is expected to increase from 21 percent of electricity production to 25 percent by 2015.
The only thing that could upset this fantastic scenario for low price energy is the evil of radical environmentalists, who are devastating the United States and other parts of the world through lawsuits and pressuring lawmakers to create regulations which basically destroy energy use of any kind.
The only thing these hypocrites like is wind power, which of course, unknown to most, destroy wildlife, especially birds in bats at levels which would shock most people if the story was told.
BP's (NYSE:BP) small effect on animals and sea life makes them look like guardians of the earth in comparison to wind turbines.
This is where we should all draw the line and fight back so hard as to destroy these evil organizations and people who continue to hate the human race and inexpensive energy that makes their lives easier.
Monday, September 27, 2010
Williams (NYSE:WMB), Devon (NYSE:DVN), Noble (NYSE:NBL), Apache(NYSE:APA), Williams (NYSE:WMB) Cutting Spending
Natural gas companies like Devon Energy Corp (NYSE:DVN), Noble Energy Inc (NYSE:NBL) Williams (NYSE:WMB) and Apache Corp (NYSE:APA) are all expected to lower their capital expenditures in 2011 in light of ongoing low natural gas prices.
A large portion of the lower capex will be from cutting back on drilling for natural gas by the companies, and other companies with natural gas exposure.
Some of those cuts could be offset by transferring spending to oil exploration and cash generation from free-flowing debt markets.
Williams has already confirmed they're going to cut spending in 2011, and the others mentioned are sure to follow. Lower prices and lower margins, which will result in lower earnings are the reasons behind the spending cuts. That means less money to spend, as too much debt spending would crush the performance of the companies.
One positive area for gas companies is liquids, where companies holding those assets will be able to sell it at premium prices.
An area that will demand capital expenditure are those holding leases on acreage that must be drilled unless they expire.
But based on the price of natural gas, some experts in the industry say supply is so abundant it could be many years before natural gas prices turn around.
The smart companies are increasing their exposure to oil and the liquids mentioned above. Those companies which don't adapt are going to struggle to increase earnings and be profitable.
EOG Resources Inc (NYSE:EOG) and Chesapeake Energy (NYSE:CHK), among others, have already moved in that direction.
Another strategy recently has been for companies heavily exposed to natural gas to raise capital through debt, with Linn Energy (Nasdaq:LINE) and Anadarko Petroleum Corp (NYSE:APC) among the most recent.
They are doing that for the time when the natural gas market recovers, which will probably be a long wait. But they will be prepared for it whenever it does happen.
A large portion of the lower capex will be from cutting back on drilling for natural gas by the companies, and other companies with natural gas exposure.
Some of those cuts could be offset by transferring spending to oil exploration and cash generation from free-flowing debt markets.
Williams has already confirmed they're going to cut spending in 2011, and the others mentioned are sure to follow. Lower prices and lower margins, which will result in lower earnings are the reasons behind the spending cuts. That means less money to spend, as too much debt spending would crush the performance of the companies.
One positive area for gas companies is liquids, where companies holding those assets will be able to sell it at premium prices.
An area that will demand capital expenditure are those holding leases on acreage that must be drilled unless they expire.
But based on the price of natural gas, some experts in the industry say supply is so abundant it could be many years before natural gas prices turn around.
The smart companies are increasing their exposure to oil and the liquids mentioned above. Those companies which don't adapt are going to struggle to increase earnings and be profitable.
EOG Resources Inc (NYSE:EOG) and Chesapeake Energy (NYSE:CHK), among others, have already moved in that direction.
Another strategy recently has been for companies heavily exposed to natural gas to raise capital through debt, with Linn Energy (Nasdaq:LINE) and Anadarko Petroleum Corp (NYSE:APC) among the most recent.
They are doing that for the time when the natural gas market recovers, which will probably be a long wait. But they will be prepared for it whenever it does happen.
Saturday, September 11, 2010
Blood Centers Call for Type O Negative Donations for San Bruno Victims
With numerous victims still in need of blood from the Pacific Gas & Electric Co. (NYSE:PCG) natural gas explosion in San Bruno, California, blood centers are requesting donations of type O negative blood to meet the growing need.
Type O negative is the type of blood which can be used for anyone in case of emergencies.
There are enough supplies temporarily, as the blood center can get blood from other hospitals, but concerns are over what will happen in the next day or two if supplies run short, which they are in danger of doing.
Blood center spokeswoman Lisa Bloch said, "We'll juggle blood from other hospitals to make sure that they're covered, but the problem becomes what happens tomorrow and over the weekend."
Dozens of people have been injured from the explosion, some more severe than others, with four confirmed deaths.
Type O negative is the type of blood which can be used for anyone in case of emergencies.
There are enough supplies temporarily, as the blood center can get blood from other hospitals, but concerns are over what will happen in the next day or two if supplies run short, which they are in danger of doing.
Blood center spokeswoman Lisa Bloch said, "We'll juggle blood from other hospitals to make sure that they're covered, but the problem becomes what happens tomorrow and over the weekend."
Dozens of people have been injured from the explosion, some more severe than others, with four confirmed deaths.
Friday, August 27, 2010
Chesapeake (NYSE:CHK), EnCana (NYSE:ECA) and Devon (NYSE:DVN) Up on Higher Demand from Warm Weather
Chesapeake Energy (NYSE:CHK), EnCana Corp. (NYSE:ECA) and Devon Energy Corp. (NYSE:DVN), along with Anadarko Petroleum Corp. (NYSE:APC) and Halliburton (NYSE:HAL), on news of the warmer summer increased demand for natural gas for the generation of electricity.
Most of the companies with exposure to the commodity are up today, but there is downward pressure coming as the supply continues to grow in spite of the demand.
The increase in share price of the companies today are based on past demand, and not on future prospects.
For example, for the week ending August 20, stockpiles of natural gas in the lower 48 states increased by 40 billion cubic feet.
There also continues to be ample supply as storage levels are 6.2 percent above their five-year average, even with the recent strong demand. And the natural gas inventories have risen over the Tcf level for only the second time in 2010.
A number of companies with significant exposure to natural gas understand the threats, even in a high-demand period of time, as the huge amount of resource and increasing number of companies entering into the field ensure downward pressure on natural gas prices for some time to come.
Some have been diversifying into oil to help them maintain revenue and earnings growth.
Most of the companies with exposure to the commodity are up today, but there is downward pressure coming as the supply continues to grow in spite of the demand.
The increase in share price of the companies today are based on past demand, and not on future prospects.
For example, for the week ending August 20, stockpiles of natural gas in the lower 48 states increased by 40 billion cubic feet.
There also continues to be ample supply as storage levels are 6.2 percent above their five-year average, even with the recent strong demand. And the natural gas inventories have risen over the Tcf level for only the second time in 2010.
A number of companies with significant exposure to natural gas understand the threats, even in a high-demand period of time, as the huge amount of resource and increasing number of companies entering into the field ensure downward pressure on natural gas prices for some time to come.
Some have been diversifying into oil to help them maintain revenue and earnings growth.
Wednesday, August 25, 2010
Bank of America (NYSE:BAC) Lowers Consol Energy (NYES:CNX) Estimate, Price Target
Bank of America Corp (NYSE:BAC) cut back its earnings estimate for Consol Energy (NYES:CNX), while also lowering their price target on the company to $50.
Consol Energy, which produces natural gas and coal, was cut because of the abundant supply of natural gas which will put pressure on prices and margins.
The economy is also playing a major factor, as coal demand could slide as consumers continue to use less energy to help with their bills.
Bank of America maintained their "Buy" rating on the energy company, even with the lowered outlook.
Consol Energy, which produces natural gas and coal, was cut because of the abundant supply of natural gas which will put pressure on prices and margins.
The economy is also playing a major factor, as coal demand could slide as consumers continue to use less energy to help with their bills.
Bank of America maintained their "Buy" rating on the energy company, even with the lowered outlook.
Tuesday, August 3, 2010
Chesapeake Shifting $400 Million to Oil Exploration
The amount of natural gas in the United States has become so abundant it no longer makes sense for companies to continue to put more resources into it, and that has caused Chesapeake Energy Corp (NYSE:CHK) to transfer $400 million it had targeted natural gas exploration and production, to oil exploration.
Supply of natural gas has put a lot of downward pressure on natural gas prices at a time when oil prices are rising. Oil margins have a larger spread and oil is much more profitable than its counterpart at this time, and for the foreseeable future.
In a press release, Chesapeake said, "In recognition of the significant and persistent value gap that has developed between natural gas and oil prices, Chesapeake has accelerated its transition to a more liquids-rich asset base."
The full-year drilling budget for Chesapeake will remain level, with $4.5 billion to $4.6 billion set aside for that purpose.
Cheasapeake will release its earnings for the second quarter after the market closes today.
Supply of natural gas has put a lot of downward pressure on natural gas prices at a time when oil prices are rising. Oil margins have a larger spread and oil is much more profitable than its counterpart at this time, and for the foreseeable future.
In a press release, Chesapeake said, "In recognition of the significant and persistent value gap that has developed between natural gas and oil prices, Chesapeake has accelerated its transition to a more liquids-rich asset base."
The full-year drilling budget for Chesapeake will remain level, with $4.5 billion to $4.6 billion set aside for that purpose.
Cheasapeake will release its earnings for the second quarter after the market closes today.
Tuesday, July 27, 2010
UBS (NYSE:UBS) Starts Oasis Petroleum (NYSE:OAS) with "Buy" Rating
UBS (NYSE:UBS) has launched coverage of Oasis Petroleum (NYSE:OAS), and they began with a "Buy" rating on the energy company, with a price target of $20 a share.
"We favor Oasis’ pure-play Bakken, 91% oil-weighted profile and believe that management can achieve the most attractive growth profile in the space through 2012 without additional external financing," said the UBS analyst covering the company.
Oasis Petroleum focuses on unconventional natural gas and oil resources to develop and/or acquire.
Oasis was down today to $16.28, dropping $0.40, or2.40 percent as of 3:50 PM EDT.
"We favor Oasis’ pure-play Bakken, 91% oil-weighted profile and believe that management can achieve the most attractive growth profile in the space through 2012 without additional external financing," said the UBS analyst covering the company.
Oasis Petroleum focuses on unconventional natural gas and oil resources to develop and/or acquire.
Oasis was down today to $16.28, dropping $0.40, or2.40 percent as of 3:50 PM EDT.
Wednesday, July 21, 2010
Apache (NYSE:APA) Beats Quarterly Expectations, Acquires BP (NYSE:BP) Assets
Apache Corp. (NYSE:APA) handily beat earnings and revenue expectations for the second quarter, with international operations leading the way.
Earnings for the quarter reached $860.2 million, or $2.53 a share, a 94 percent gain from the same quarter last year of $443.3 million, or $1.31 a share. Revenue increased to $2.97 billion, or 42 percent.
Estimates for earnings were at $2.31 a share, while revenue was projected to reach $2.81 billion.
Chairman and Chief Executive G. Steven Farris said about the company's performance, "We are realizing the benefit of significant discoveries and the investments Apache made to bring them on production. Apache's financial results also benefited from our balanced commodity mix at a time when oil prices remain strong relative to North American natural gas prices."
Australia assets led the way for daily production, which was elevated by 10 percent for the quarter. Oil production reached 646,866 barrels of oil equivalent, while liquid hydrocarbon grew 16 percent over last year. Natural gas production was level, gaining only one percent in the quarter over last year, although increasing five percent over the previous quarter.
Under normal conditions this would have pushed the stock price up, but the news they are purchasing $7 billion in assets from BP (NYSE:BP) pushed the share price down, evidently based on dilution concerns, as the company will sell 21 million common shares and $1.1 billion in preferred shares to generate the capital.
Apache will reportedly pay about $5 billion before the official close, which has been thrown out to be on July 30.
Earnings for the quarter reached $860.2 million, or $2.53 a share, a 94 percent gain from the same quarter last year of $443.3 million, or $1.31 a share. Revenue increased to $2.97 billion, or 42 percent.
Estimates for earnings were at $2.31 a share, while revenue was projected to reach $2.81 billion.
Chairman and Chief Executive G. Steven Farris said about the company's performance, "We are realizing the benefit of significant discoveries and the investments Apache made to bring them on production. Apache's financial results also benefited from our balanced commodity mix at a time when oil prices remain strong relative to North American natural gas prices."
Australia assets led the way for daily production, which was elevated by 10 percent for the quarter. Oil production reached 646,866 barrels of oil equivalent, while liquid hydrocarbon grew 16 percent over last year. Natural gas production was level, gaining only one percent in the quarter over last year, although increasing five percent over the previous quarter.
Under normal conditions this would have pushed the stock price up, but the news they are purchasing $7 billion in assets from BP (NYSE:BP) pushed the share price down, evidently based on dilution concerns, as the company will sell 21 million common shares and $1.1 billion in preferred shares to generate the capital.
Apache will reportedly pay about $5 billion before the official close, which has been thrown out to be on July 30.
Friday, July 9, 2010
Exxon (NYSE:XOM) Buying Back $3 Billion Shares
In a nod toward shareholders, Exxon Mobil Corp. (NYSE:XOM) said they're going to buy back $3 billion of its shares in the quarter to shrink the effects it had of diluting shares from their acquisition of XTO Energy.
The giant energy company also said they'll refinance or pay back all the assumed debt from the deal as well.
Outstanding shares in the company rose by 416 million, or about 9 percent from the $25 billion acquisition, said vice president for investor relations, David Rosenthal, on a conference call.
The amount of assumed debt needed to be refinanced or paid off is $11 billion.
This is a natural gas play from a long-term perspective, where Exxon Mobil received with XTO, at minimum, 45 trillion cubic feet of recoverable gas. And just as important, the immediate expertise of those in the company who specialized in the sector.
The giant energy company also said they'll refinance or pay back all the assumed debt from the deal as well.
Outstanding shares in the company rose by 416 million, or about 9 percent from the $25 billion acquisition, said vice president for investor relations, David Rosenthal, on a conference call.
The amount of assumed debt needed to be refinanced or paid off is $11 billion.
This is a natural gas play from a long-term perspective, where Exxon Mobil received with XTO, at minimum, 45 trillion cubic feet of recoverable gas. And just as important, the immediate expertise of those in the company who specialized in the sector.
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