Previous forecasts of unseasonably hot weather are no longer in the picture, and consequently natural gas futures fell for the first time in five days in response to the new forecast of cooler weather than originally expected.
That will reduce expected natural gas demand for electricity it powers, especially in the Northeast and Midwest.
The revision in the weather forecast calls for weather to be a minimum normal levels, with a good chance of dropping below normal temperatures.
Natural gas prices had soared 16 percent on the previous forecasts of much hotter weather.
July delivery of natural gas dropped 2.2 percent or 10.8 cents to $4.808 per million British thermal units on the New York Mercantile Exchange.
Even with supply outpacing demand for natural gas, prices since last year have increased by 29 percent, but most don't believe that is sustainable with so much natural gas available in the United States.
Natural gas production in the U.S. for 2010 was upwardly revised by the Energy Department’s Short-Term Energy Outlook by 0.8 percent to 61.22 billion cubic feet a day, up from the previous 60.75 projections in May.
Showing posts with label Natural Gas Investing. Show all posts
Showing posts with label Natural Gas Investing. Show all posts
Wednesday, June 9, 2010
Friday, June 4, 2010
US Natural Gas Fund (NYSE:UNG) Soaring
The supply of natural gas in relationship to demand has put downward pressure on heavily exposed natural gas companies and natural gas ETFs like US Natural Gas Fund (NYSE:UNG).
That has changed over the last couple of weeks, as the US Natural Gas Fund has surged by over 12 percent during that time.
It has been March since UNG has traded at current price levels.
With nothing much in the supply equation changing, other than the evil attempt by some Democrats to limit access to the natural gas resources in the Marcellus Shale, it's probably backwardation at this time which has been driving the price of UNG recently.
Backwardation refers to the time future gas prices drop below expected future spot gas prices. That favors an ETF fund like UNG.
That has changed over the last couple of weeks, as the US Natural Gas Fund has surged by over 12 percent during that time.
It has been March since UNG has traded at current price levels.
With nothing much in the supply equation changing, other than the evil attempt by some Democrats to limit access to the natural gas resources in the Marcellus Shale, it's probably backwardation at this time which has been driving the price of UNG recently.
Backwardation refers to the time future gas prices drop below expected future spot gas prices. That favors an ETF fund like UNG.
Monday, May 10, 2010
MAG Silver (TSE:MAG), Platinum Group Metals (TSE:PTM) Founder Likes Natural Gas
The founder of precious metal mining companies like MAG Silver (TSE:MAG), Platinum Group Metals (TSE:PTM), R. Michael Jones, likes what he sees in the natural gas sector, and is pursuing it with his latest startup, Nextraction Energy Corp. (TSE-V:NE).
Nextraction Energy targets gas development in the U.S., primarily shale gas which has been so abundantly discovered, and over the long-term will change the energy picture around the world, and bring the focus back on the U.S., which used to be the largest oil producer in the world.
Jones especially likes the emerging markets possibilities, where natural gas will serve them as an efficient energy supplement or replacement for oil, which will cost much less.
While in the short term natural gas is expected to remain depressed in price, over the long term it could rise some and stabilize, offering a predictable stream of income for companies positioned to take advantage of it.
But this is definitely a long-term play, as natural gas companies gravitate toward oil for profits in the low-margin, existing natural gas market.
Nextraction Energy targets gas development in the U.S., primarily shale gas which has been so abundantly discovered, and over the long-term will change the energy picture around the world, and bring the focus back on the U.S., which used to be the largest oil producer in the world.
Jones especially likes the emerging markets possibilities, where natural gas will serve them as an efficient energy supplement or replacement for oil, which will cost much less.
While in the short term natural gas is expected to remain depressed in price, over the long term it could rise some and stabilize, offering a predictable stream of income for companies positioned to take advantage of it.
But this is definitely a long-term play, as natural gas companies gravitate toward oil for profits in the low-margin, existing natural gas market.
Thursday, April 22, 2010
U.S. Natural Gas Fund (NYSEArca:UNG) Up on Lower Storage Level Growth
The U.S. Natural Gas Fund (NYSEArca:UNG) was up today as a surprise findings of a report from the Energy Information Administration found natural gas storage levels hadn't grown as high as expected, and the natural gas market responded positively to the news, driving prices up.
While this was a nice surprise for investors, it really is only a short-term event, as even after the lower-than-expected storage growth, figures still have natural gas levels up 18.5 percent higher than the five-year average, and up 5.5 percent from last year.
This shows me that once there is a sustainable turnaround in natural gas demand, the market is looking for an excuse to rise, and those companies and funds positioned for it should reward shareholders handsomely, as seen today with the U.S. Natural Gas Fund and others in the industry.
While this was a nice surprise for investors, it really is only a short-term event, as even after the lower-than-expected storage growth, figures still have natural gas levels up 18.5 percent higher than the five-year average, and up 5.5 percent from last year.
This shows me that once there is a sustainable turnaround in natural gas demand, the market is looking for an excuse to rise, and those companies and funds positioned for it should reward shareholders handsomely, as seen today with the U.S. Natural Gas Fund and others in the industry.
Natural Gas Prices Up on Lower Storage Levels
Investors in natural gas were surprised that storage levels had expanded less than anticipated, sending prices up, settling at $4.128 per 1,000 cubic feet on the New York Mercantile Exchange, an increase of 17.3 cents.
Original estimates by the energy department were natural gas levels were going to reach as high as 80 billion cubic feet, while growing by only 73 billion cubic feet; close to 1.83 trillion cubic feet for the week ending April 16.
Much of the discrepancy came from mild weather which had caused analysts to believe natural gas storage levels would rise higher.
Possible increased usage from the manufacturing sector and natural gas production being less than thought are reasons given for the storage levels being less than estimated.
Original estimates by the energy department were natural gas levels were going to reach as high as 80 billion cubic feet, while growing by only 73 billion cubic feet; close to 1.83 trillion cubic feet for the week ending April 16.
Much of the discrepancy came from mild weather which had caused analysts to believe natural gas storage levels would rise higher.
Possible increased usage from the manufacturing sector and natural gas production being less than thought are reasons given for the storage levels being less than estimated.
Monday, April 19, 2010
EnCana (TSE:ECA) Wishing it Kept Oil Assets?
When EnCana (TSE:ECA) spun off its oil assets last year into a new company named Cenovus Energy (TSE:CVE), it seemed a good move in light of the possibilities natural gas seemed to offer, they may have regrets now as many natural gas companies are adding oil assets to combat what could be an oversupply of natural gas for years head.
Of course the diffentiator for EnCana was its focus on unconventional natural gas, which should give it a cost advantage over its competitors, and hopefully increase revenue, and ultimately profits as a result.
The emerging shale gas play has been somewhat disruptive to that strategy, as the amount of shale gas in the U.S. is so high, it has put downward pressure on natural gas prices, and could for years to come.
Having said that, I do think natural gas will move up in price, even with the large supply. What has been priced into natural gas has been the large quantity available in the market which investors are starting to understand.
Once that is priced in completely, which it may be close to becoming, it seems over time that will change, and natural gas prices will start to edge up along with the share price of the natural gas companies like EnCana.
Long-term, natural gas should be a good play, based on the low cost of entry at this time. The only place it seems it can go is up.
Of course the diffentiator for EnCana was its focus on unconventional natural gas, which should give it a cost advantage over its competitors, and hopefully increase revenue, and ultimately profits as a result.
The emerging shale gas play has been somewhat disruptive to that strategy, as the amount of shale gas in the U.S. is so high, it has put downward pressure on natural gas prices, and could for years to come.
Having said that, I do think natural gas will move up in price, even with the large supply. What has been priced into natural gas has been the large quantity available in the market which investors are starting to understand.
Once that is priced in completely, which it may be close to becoming, it seems over time that will change, and natural gas prices will start to edge up along with the share price of the natural gas companies like EnCana.
Long-term, natural gas should be a good play, based on the low cost of entry at this time. The only place it seems it can go is up.
Friday, April 16, 2010
Jim Rogers Likes Natural Gas in the Energy Sector
Jim Rogers on Natural Gas
Jim Rogers was recently talking investing in energy, and stated he's not selling energy at this time, even though it has doubled over the last 12 months.
It seems he's not buying energy, but he said if he was, natural gas would be his choice, as natural gas prices are depressed, while oil has been high for some time.
Rogers said, "If I were buying energy, I would probably buy natural gas rather than oil just because it’s so depressed. I don’t like to buy when things are up. I like to buy things when down, when people are unhappy that’s when I like to buy things."
I think Jim Rogers may be being a little coy here, as I'm sure he's putting some major money into natural gas, which has nowhere to go but up, and with Rogers liking long-term plays, natural gas fits right into that strategy.
Jim Rogers was recently talking investing in energy, and stated he's not selling energy at this time, even though it has doubled over the last 12 months.
It seems he's not buying energy, but he said if he was, natural gas would be his choice, as natural gas prices are depressed, while oil has been high for some time.
Rogers said, "If I were buying energy, I would probably buy natural gas rather than oil just because it’s so depressed. I don’t like to buy when things are up. I like to buy things when down, when people are unhappy that’s when I like to buy things."
I think Jim Rogers may be being a little coy here, as I'm sure he's putting some major money into natural gas, which has nowhere to go but up, and with Rogers liking long-term plays, natural gas fits right into that strategy.
Monday, April 12, 2010
Huge Amount of Natural Gas Discovered in Levant Basin
Natural Gas Reserves in Levant Basin
Previously undiscovered natural gas have been found in the Levant Basin, with estimates of 122 trillion cubic feet available to be recovered, according to U.S. geologists. The Levant Basin is located in the Eastern Mediterranean.
According to the U.S. Geological Survey, the natural gas in the basin is considered "technically recoverable," which is a phrase meaning the existing practices and technology available to energy companies can tap into the reserves.
USGS Energy Resources Program Coordinator Brenda Pierce said this about the survey. "This assessment furthers our understanding of the world's energy potential, helping inform policy- and decision-makers in making decisions about future energy supplies."
Previously undiscovered natural gas have been found in the Levant Basin, with estimates of 122 trillion cubic feet available to be recovered, according to U.S. geologists. The Levant Basin is located in the Eastern Mediterranean.
According to the U.S. Geological Survey, the natural gas in the basin is considered "technically recoverable," which is a phrase meaning the existing practices and technology available to energy companies can tap into the reserves.
USGS Energy Resources Program Coordinator Brenda Pierce said this about the survey. "This assessment furthers our understanding of the world's energy potential, helping inform policy- and decision-makers in making decisions about future energy supplies."
Thursday, April 8, 2010
JPMorgan (NYSE:JPM) Deal with Cheniere Energy (AMEX:LNG)
JPMorgan Natural Gas Deal with Cheniere Energy
A number of banks have been moving into the natural gas sector, and that's true with JPMorgan (NYSE:JPM), as evidenced by their deal with (AMEX:LNG).
The deal entails importing liquefied natural gas, which while having long term potential, in the short term will put downward pressure on teh profits of JPMorgan.
I'm a long-term investor, so that doesn't bother me in the least, but for those only looking at the short-term, it will be a challenging deal to absorb.
This is the result of the continuing fall of natural gas prices in the United States, which shows no sign of abating any time soon.
How the deal will work, is JPMorgan will jointly buy natural gas cargoes with Cheniere from overseas markets and resale them in the U.S. market. Both will share in any profits or losses incurred from the arrangement.
With the growing number of gas-shale opportunities within the United States, it is becoming more difficult to acquire import loads at a price that will make sense or be profitable.
Adding the balance sheet of JPMorgan to the mix does make it more probable they can make larger acquisitions which could result in lower prices which would make sense at that time.
Either way, this is a long term play, which will demand a lot on the domestic natural gas supply in the U.S., which shows no sign of abating.
JPMorgan competitors like Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) have also entered the natural gas market in anticipation of growing demand. But as long as supply is so available, this shouldn't do much to increase the profits at the companies, but does position them for the day when the supply/demand situation changes.
A number of banks have been moving into the natural gas sector, and that's true with JPMorgan (NYSE:JPM), as evidenced by their deal with (AMEX:LNG).
The deal entails importing liquefied natural gas, which while having long term potential, in the short term will put downward pressure on teh profits of JPMorgan.
I'm a long-term investor, so that doesn't bother me in the least, but for those only looking at the short-term, it will be a challenging deal to absorb.
This is the result of the continuing fall of natural gas prices in the United States, which shows no sign of abating any time soon.
How the deal will work, is JPMorgan will jointly buy natural gas cargoes with Cheniere from overseas markets and resale them in the U.S. market. Both will share in any profits or losses incurred from the arrangement.
With the growing number of gas-shale opportunities within the United States, it is becoming more difficult to acquire import loads at a price that will make sense or be profitable.
Adding the balance sheet of JPMorgan to the mix does make it more probable they can make larger acquisitions which could result in lower prices which would make sense at that time.
Either way, this is a long term play, which will demand a lot on the domestic natural gas supply in the U.S., which shows no sign of abating.
JPMorgan competitors like Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) have also entered the natural gas market in anticipation of growing demand. But as long as supply is so available, this shouldn't do much to increase the profits at the companies, but does position them for the day when the supply/demand situation changes.
Monday, April 5, 2010
SandRidge Energy (NYSE:SD) Acquiring Arena Resources (NYSE:ARD)
SandRidge Energy
In a move to tap into more oil resources, SandRidge Energy (NYSE:SD) announced it will acquire its rival, Arena Resources (NYSE: ARD), for $1.6 billion, equaling the market cap of SandRidge at the time of this writing.
Natural gas prices are projected to remain low for a long time, and companies overweight in natural gas are scrambling to diversify to remain profitable and grow.
SandRidge has a strategy of searching for its oil and gas in a more conventional manner, holding back from entering into the higher-cost shale gas others are tapping into at this time.
As far as natural gas goes, this is a good strategy as the most profitable companies will be those able to contain their costs the best in a low-price environment.
SandRidge Energy
In a move to tap into more oil resources, SandRidge Energy (NYSE:SD) announced it will acquire its rival, Arena Resources (NYSE: ARD), for $1.6 billion, equaling the market cap of SandRidge at the time of this writing.
Natural gas prices are projected to remain low for a long time, and companies overweight in natural gas are scrambling to diversify to remain profitable and grow.
SandRidge has a strategy of searching for its oil and gas in a more conventional manner, holding back from entering into the higher-cost shale gas others are tapping into at this time.
As far as natural gas goes, this is a good strategy as the most profitable companies will be those able to contain their costs the best in a low-price environment.
SandRidge Energy
Chesapeake Energy (NYSE:CHK) Targeting Oil
Chesapeake Energy
The abundance of natural gas which has resulted in natural gas prices plunging, has resulted in a number of natural gas companies like Chesapeake Energy (NYSE:CHK) to focus on other sources of revenue; and in the case of Chesapeake Energy that is oil.
Aubrey McClendon, Chairman and CEO of Chesapeake Energy has resisted making the move, but the refusal of natural gas prices to rise over time has forced her to reconsider, and now is changing her tune and is looking at oil as a way to diversify their assets.
McClendon recently stated the company feels they probably have enough gas to last them the rest of their lives. What she really means is the economics of natural gas is no longer as compelling as it has been, and they need to go beyond it for a more profitable future.
Chesapeake Energy
The abundance of natural gas which has resulted in natural gas prices plunging, has resulted in a number of natural gas companies like Chesapeake Energy (NYSE:CHK) to focus on other sources of revenue; and in the case of Chesapeake Energy that is oil.
Aubrey McClendon, Chairman and CEO of Chesapeake Energy has resisted making the move, but the refusal of natural gas prices to rise over time has forced her to reconsider, and now is changing her tune and is looking at oil as a way to diversify their assets.
McClendon recently stated the company feels they probably have enough gas to last them the rest of their lives. What she really means is the economics of natural gas is no longer as compelling as it has been, and they need to go beyond it for a more profitable future.
Chesapeake Energy
Tuesday, March 30, 2010
Exxon Mobil (NYSE:XOM) and Natural Gas
Exxon Mobil ties future growth to natural gas
Exxon Mobil (NYSE:XOM) in acquiring XTO Energy Inc. has positioned themselves far a strong future with the natural gas play they got with XTO.
With natural gas prices as low as they are, there's no doubt it'll begin to rise again in price again, and when it does, Exxon Mobil will rise in value with those prices.
Exxon has one of the largest stakes in natural gas now, and their future fortune is tied into it in a big way, and even if the sector was to grow conservatively and moderately, long term this should be a great stock to own.
Exxon Mobil (NYSE:XOM) in acquiring XTO Energy Inc. has positioned themselves far a strong future with the natural gas play they got with XTO.
With natural gas prices as low as they are, there's no doubt it'll begin to rise again in price again, and when it does, Exxon Mobil will rise in value with those prices.
Exxon has one of the largest stakes in natural gas now, and their future fortune is tied into it in a big way, and even if the sector was to grow conservatively and moderately, long term this should be a great stock to own.
Monday, March 29, 2010
Shell (NYSE:RDS.A) Increases Natural Gas Stake in Texas
Royal Dutch Shell Natural Gas Holdings
Royal Dutch Shell (NYSE:RDS.A) has been increasing its position in a natural gas field in Texas to enlarge their position in the North American gas business, which has great promise for decades ahead.
The location of the Texas natural gas field is near San Antonio, and is called Eagle Ford. Shell leased another 150,000 acres in the region not too long ago in anticipation of increasing demand for the commodity.
Shell has been working the last couple of years to build up their portfolio in North America, and now have 2.4 million acres of land which holds up to 21 trillion cubic feet of natural gas.
Shell also has significant holdings in the U.S. Rockies and Louisiana, as well as in British Columbia and Alberta, Canada.
Shale gas could end up accounting for half of all U.S. natural gas supplied by 2035.
Royal Dutch Shell (NYSE:RDS.A) has been increasing its position in a natural gas field in Texas to enlarge their position in the North American gas business, which has great promise for decades ahead.
The location of the Texas natural gas field is near San Antonio, and is called Eagle Ford. Shell leased another 150,000 acres in the region not too long ago in anticipation of increasing demand for the commodity.
Shell has been working the last couple of years to build up their portfolio in North America, and now have 2.4 million acres of land which holds up to 21 trillion cubic feet of natural gas.
Shell also has significant holdings in the U.S. Rockies and Louisiana, as well as in British Columbia and Alberta, Canada.
Shale gas could end up accounting for half of all U.S. natural gas supplied by 2035.
Friday, March 26, 2010
U.S. Natural Gas Fund (NYSEArca:UNG) Struggles On
U.S. Natural Gas Fund
The U.S. Natural Gas Fund (NYSEArca:UNG), whose fate is tied in with the movement of natural gas (as it tracks whichever direction natural gas takes, being an exchange-traded fund), has found itself struggling as it plunges in value along with the huge drop in natural gas prices.
Since January 1, 2010, the fund has lost close to $1.5 billion in assets, close to 33 percent of the entirety of the fund.
Close to $450 million in cash has also been redeemed by investors, while another $1 billion was lost on those shorting the fund.
The fund, which was birthed in 2007, is now experiencing its worst losses since its inception.
Energy analysts say natural gas futures will struggle to break the $4 mark in the near term.
U.S. Natural Gas Fund
The U.S. Natural Gas Fund (NYSEArca:UNG), whose fate is tied in with the movement of natural gas (as it tracks whichever direction natural gas takes, being an exchange-traded fund), has found itself struggling as it plunges in value along with the huge drop in natural gas prices.
Since January 1, 2010, the fund has lost close to $1.5 billion in assets, close to 33 percent of the entirety of the fund.
Close to $450 million in cash has also been redeemed by investors, while another $1 billion was lost on those shorting the fund.
The fund, which was birthed in 2007, is now experiencing its worst losses since its inception.
Energy analysts say natural gas futures will struggle to break the $4 mark in the near term.
U.S. Natural Gas Fund
Thursday, March 18, 2010
United States Natural Gas Fund (NYSEArca:UNG) Down on Oil Prices Spiking
United States Natural Gas Down
Increasing oil prices has put some downward pressure on natural gas, and United States Natural Gas (NYSEArca:UNG) has responded in kind, dropping along with the move - at least for now.
Others have been heartened by the proposal by Obama to switch coal-burning power plants to natural gas. There will be a lot of opposition to that, and it's not clear whether that would pass or not.
Even if it did, growth for coal would still continue as producers are targeting emerging and developing markets, where they see most of their growth happening, along with most commodities.
Either way, natural gas will increase in use, and long term, that will be good news for the United States Natural Gas Fund.
Increasing oil prices has put some downward pressure on natural gas, and United States Natural Gas (NYSEArca:UNG) has responded in kind, dropping along with the move - at least for now.
Others have been heartened by the proposal by Obama to switch coal-burning power plants to natural gas. There will be a lot of opposition to that, and it's not clear whether that would pass or not.
Even if it did, growth for coal would still continue as producers are targeting emerging and developing markets, where they see most of their growth happening, along with most commodities.
Either way, natural gas will increase in use, and long term, that will be good news for the United States Natural Gas Fund.
Wednesday, March 17, 2010
Exxon Mobil (NYSE:XOM) and XTO Energy (NYSE:XTO)
Exxon Mobil Waiting Period over for XTO Energy
A required regulatory hurdle entailing a waiting period for Exxon Mobil (NYSE:XOM) to take over XTO Energy (NYSE:XTO) has been met, and the fact that there were no objections or actions taken by the Federal Trade Commission or the Justice Department implies an open door and that Exxon and XTO can go forward with the deal. The waiting period officially ended on Monday.
Terms of the deal are straightforward, with Exxon acquiring XTO in an all-stock deal for the company. One other key requirement will be for the shareholders to approve the deal, which doesn't seem to be a problem at this time. Exxon will also take over about $10 billion in debt XTO holds. The deal is expected to close on June 30 according to CEO Rex Tillerson.
According to XTO, they are sitting on 45 trillion cubic feet of gas which is trapped in tight shale formations, which formerly was cost-prohibitive to extract. New technology exists where it can be done on a much less expensive basis.
Exxon believes natural gas will be an important generator of electricity in the years ahead.
A required regulatory hurdle entailing a waiting period for Exxon Mobil (NYSE:XOM) to take over XTO Energy (NYSE:XTO) has been met, and the fact that there were no objections or actions taken by the Federal Trade Commission or the Justice Department implies an open door and that Exxon and XTO can go forward with the deal. The waiting period officially ended on Monday.
Terms of the deal are straightforward, with Exxon acquiring XTO in an all-stock deal for the company. One other key requirement will be for the shareholders to approve the deal, which doesn't seem to be a problem at this time. Exxon will also take over about $10 billion in debt XTO holds. The deal is expected to close on June 30 according to CEO Rex Tillerson.
According to XTO, they are sitting on 45 trillion cubic feet of gas which is trapped in tight shale formations, which formerly was cost-prohibitive to extract. New technology exists where it can be done on a much less expensive basis.
Exxon believes natural gas will be an important generator of electricity in the years ahead.
Monday, March 15, 2010
United States Natural Gas Fund (NYSEArca:UNG) and Inventory
United States Natural Gas Fund
Over the last year the United States Natural Gas Fund (NYSEArca:UNG) has continued on its downward spiral, with the chart line continually dropping from left to right.
A year ago the stock was almost at double what it is today, and there's no end in sight as far as where it will bottom out, as inventory continues to hold strong with no surprises in the mix. Two years ago the stock was over five times the value as it is today, revealing once it bottoms out there could be a nice rebound, although many of those long in the stock are hoping that happens sometime soon.
Until demand for natural gas picks up though, the company will continue to struggle, and we could see it plunge even further before we see signs of sustainable recovery.
This confirms consumers and businesses aren't convinced the recession is over, and until they start spending again, including on natural gas, we'll see supplies continue to grow or stay the same, giving the stock nowhere to go but down or stay level.
Even so, I like this stock once it does reach its bottom, as it should give a nice upward push at that time.
United States Natural Gas Fund
Over the last year the United States Natural Gas Fund (NYSEArca:UNG) has continued on its downward spiral, with the chart line continually dropping from left to right.
A year ago the stock was almost at double what it is today, and there's no end in sight as far as where it will bottom out, as inventory continues to hold strong with no surprises in the mix. Two years ago the stock was over five times the value as it is today, revealing once it bottoms out there could be a nice rebound, although many of those long in the stock are hoping that happens sometime soon.
Until demand for natural gas picks up though, the company will continue to struggle, and we could see it plunge even further before we see signs of sustainable recovery.
This confirms consumers and businesses aren't convinced the recession is over, and until they start spending again, including on natural gas, we'll see supplies continue to grow or stay the same, giving the stock nowhere to go but down or stay level.
Even so, I like this stock once it does reach its bottom, as it should give a nice upward push at that time.
United States Natural Gas Fund
Monday, March 8, 2010
ExxonMobil (NYSE:XOM) Shale Gas Deposits in Europe
ExxonMobil Shale Gas in Europe
After largely missing out on the huge amount of shale gas available in the U.S., large energy companies like ExxonMobil (NYSE:XOM) are now looking to the European continent as the place they can access large shale gas deposits.
If the amound of shale gas in the U.S. is any indicator, there could be an extraordinary amount in Europe as well, as the technology is now available to tap into it.
For ExxonMobil, their huge move into the shale gas sector was via its acquisition of XTO, which specializes in the field.
Even with the drop in the price of gas, over the long term the shale gas play should result in solid revenue and profits for those willing to invest with a long term horizon in mind.
The major challenge for those looking to Europe for shale gas is the industry infrastructure will need to be build up in order to process the gas, as there are only about 50 onshore gas-drilling rigs in Europe in contrast to the approximate 2,000 operating in the U.S.
ExxonMobil Shale Gas in Europe
After largely missing out on the huge amount of shale gas available in the U.S., large energy companies like ExxonMobil (NYSE:XOM) are now looking to the European continent as the place they can access large shale gas deposits.
If the amound of shale gas in the U.S. is any indicator, there could be an extraordinary amount in Europe as well, as the technology is now available to tap into it.
For ExxonMobil, their huge move into the shale gas sector was via its acquisition of XTO, which specializes in the field.
Even with the drop in the price of gas, over the long term the shale gas play should result in solid revenue and profits for those willing to invest with a long term horizon in mind.
The major challenge for those looking to Europe for shale gas is the industry infrastructure will need to be build up in order to process the gas, as there are only about 50 onshore gas-drilling rigs in Europe in contrast to the approximate 2,000 operating in the U.S.
ExxonMobil Shale Gas in Europe
Sunday, March 7, 2010
Natural Gas Companies Continue Drilling
Natural Gas Companies' Production
Even though prices for natural gas have fallen, natural gas companies continue to drill.
The consequence, as with any sector experiencing falling prices, is profits are under pressure from the practice.
The reasoning behind continuing to drill is the cold winter cut into natural gas stockpiles, which are now down by about 4 percent from levels in 2009, and the unemployment rate numbers showing some slight improvement.
I would throw out the unemployment numbers (even if they could be trusted), as they have been bouncing around for some time, and all data point to very little, if any, jobs being created by businesses in the U.S. at this time.
Natural Gas Companies' Production
Even though prices for natural gas have fallen, natural gas companies continue to drill.
The consequence, as with any sector experiencing falling prices, is profits are under pressure from the practice.
The reasoning behind continuing to drill is the cold winter cut into natural gas stockpiles, which are now down by about 4 percent from levels in 2009, and the unemployment rate numbers showing some slight improvement.
I would throw out the unemployment numbers (even if they could be trusted), as they have been bouncing around for some time, and all data point to very little, if any, jobs being created by businesses in the U.S. at this time.
Natural Gas Companies' Production
Thursday, March 4, 2010
Union Drilling (Nasdaq:UDRL) Narrows Losses
Union Drilling Quarterly Results
Union Drilling (Nasdaq:UDRL) lowered its losses in the fourth-quarter of 2009 over the fourth quarter of 2008, but revenue plunged to about half of what it was year-over-year.
In 2008, profits surged largely because of a writedown on assets held by the company.
Losses this year came in at $2.9 million, or 12 cents a share, while losses in fourth quarter of 2008 stood at $3.7 million or 17 cents a share.
But taking into account the charges for both quarter, the 2009 fourth quarter was a disaster, as the 2008 fourth quarter would have ended with a profit of $4.2 million, while this fourth quarter would have resulted in losses of $1.9 million otherwise.
Revenue mixed expectations, although not by much, as it dropped to $40.6 million, while analysts had looked for $41 million. From a year ago though, revenue had been $80.9 million.
For all of 2009, Union Drilling profits were down by about $12 million, or 55 cents a share. In 2008 the company generated $7.8 million, or 35 cents a share profit.
Revenue also dropped in a big way from $302.8 million in 2008 to only $168.9 million in 2009. A bad year no matter how you look at it.
Union Drilling Quarterly Results
Union Drilling (Nasdaq:UDRL) lowered its losses in the fourth-quarter of 2009 over the fourth quarter of 2008, but revenue plunged to about half of what it was year-over-year.
In 2008, profits surged largely because of a writedown on assets held by the company.
Losses this year came in at $2.9 million, or 12 cents a share, while losses in fourth quarter of 2008 stood at $3.7 million or 17 cents a share.
But taking into account the charges for both quarter, the 2009 fourth quarter was a disaster, as the 2008 fourth quarter would have ended with a profit of $4.2 million, while this fourth quarter would have resulted in losses of $1.9 million otherwise.
Revenue mixed expectations, although not by much, as it dropped to $40.6 million, while analysts had looked for $41 million. From a year ago though, revenue had been $80.9 million.
For all of 2009, Union Drilling profits were down by about $12 million, or 55 cents a share. In 2008 the company generated $7.8 million, or 35 cents a share profit.
Revenue also dropped in a big way from $302.8 million in 2008 to only $168.9 million in 2009. A bad year no matter how you look at it.
Union Drilling Quarterly Results
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