| What Has Natural Gas Done for You Lately? |  |  Keeping an Eye on the U.S. Supply There are a couple of ways to go when you're considering investments around natural gas. You could consider companies that deliver natural gas by way of an intricate network of pipelines that criss-cross the country. Cost effective delivery is critical since the final consumer is often hundreds or thousands of miles from the well head. Or, you may want to look for companies that are not only developing increased reserves of NG, but are also looking at alternative (green) energy sources such bio-diesel. One company worth adding to the watch list is Apollo Resources (OTCBB:AOOR), which is betting heavily on alternative fuels while developing "undervalued" hydrocarbon energy assets, with an emphasis on natural gas. And another company to tag is Aspen Exploration (OTCBB:ASPN), which focuses on the development of oil and gas sources in California. And other companies to consider may be Denbury Resources (NYSE:DNR), an independent junior with holdings in Mississippi, Louisiana and Texas; Giant Industries (NYSE:GI), a refiner based in Arizona; and Quicksilver Resources (NYSE:KWK), bringing once-productive wells back to life through new technologies. From natural gas extraction to services and delivery to the development of potential environmentally-friendly natural gas production, this issue of PetroPortfolio examines some of the clear and hidden opportunities around this vital resource. | | | Gas Pains? Watch Out at the Pump -- and Elsewhere Consumers wince at the pump every time they stop to top off the tank. But as oil and gas prices have tapped into the wallets of U.S. consumers, there's been little media attention paid to the price of natural gas. So unless you work in the trading pit, you probably haven't noticed the 38% increase in natural gas prices over the past three quarters, rising from US$5.51 (per thousand cubic feet) to a recent $7.64 close on the NYMEX. Why hasn't this been big news? Because few consumers use natural gas to heat their homes or cook their food. Natural gas is used to fire industrial furnaces more than to fire up the barbeque. If you're a trader, though, the future of natural gas is as bright as a nighttime flare-off. Total natural gas consumption is projected to increase by close to 20% by the year 2030. Department of Energy | | | "We Ain't Seen Nothin' Yet..." Energy Expert Predicts Natural Gas Cartel Energy expert Philip Verleger sees the prospect of a natural gas cartel in the future, led by the Russians who are major producers of NG. In an April interview, Verleger made an ominous prediction: "We ain't seen nothin' yet. Russia could use its position in natural gas to accelerate the development of a natural gas cartel, were it to build outlets to China...and more outlets to Europe so they could discriminate against countries that displease them." While the likelihood of a viable NG cartel is slim in the near future, and since the U.S. doesn't import that much natural gas, Verleger's assessment is only a cause for pause, and an indication of what the future might hold as U.S. gas reserves drop and consumer demand increases. Council on Foreign Relations | | | The Future's So Bright... Adding Rigs for Future Production Oil and gas producers are not going to invest heavily in exploration and development in uncertain markets. So, it seems obvious that industry insiders see a bright future for U.S. natural gas in the short term. Not ten years out, or twenty -- but right now. It takes a lot of money for a driller to put up rigs and hire the manpower to operate them. Many companies are sitting on reserves waiting for a jump in natural gas prices, while drilling companies are placing rigs in Oklahoma, Texas and Wyoming because they see the dramas playing out on the world stage in South America, the Middle East and Russia, and anticipate a spike in natural gas prices as soon as one of these flashpoints ignites. Energy Information Administration
| | | Green Ideas for Natural Gas A Cornerstone in Greenhouse Gas Reduction "Natural gas, because it is clean and efficient, can serve as the cornerstone in addressing the need to reduce greenhouse gases," said David N. Parker, President and CEO of the American Gas Association, which represents utilities delivering natural gas to 170 million Americans. The AGA published its set of Climate Change Principles detailing the impact natural gas will have on the climate. It's worth a read, especially if you're looking for an industry that seems poised for both short- and long-term growth -- the ideal scenario for day traders and buy-and-hold investors interested in possible increases in returns for the additional risk associated with commodities-based companies. American Gas Association | | | Published by PetroPortfolio Ltd. Copyright 2007 PetroPortfolio Ltd. All Rights Reserved.
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