Natural Gas

Export approval may rev up U.S. natural gas prices

29 May 2013

Rates have fallen to a low idle since peaking five years ago. But renewed overseas sales should boost demand and give prices some oomph. Freeport LNG just received the first export license granted since 2011. With more on the way, drillers finally have reason to cheer.

New oil dynamics may challenge crude growth logic

19 April 2013

Fears for the wobbly world economy have pushed Brent below $100 a barrel. Cheaper energy helps industry. Better still, booming shale output, greater efficiency and the rise of natural gas as a rival transport fuel may keep the oil price subdued even as growth is stimulated.

Chesapeake CEO exit puts energy bad boys on notice

30 January 2013

Aubrey McClendon’s abuse of shareholders has finally cost him his job. Defenders claimed he was vital to the gas driller’s future. But the oil company’s stock is already rallying. Fellow Wild West chiefs like SandRidge’s Tom Ward and Hess’s John Hess now look on borrowed time.

Conoco’s $5 bln Kazakh sale is the easy part

26 November 2012

The U.S. oil giant’s investors should be happy to see the costly Asian project go. The cash also will help fund lavish capex plans and the generous dividend. But Conoco’s real chore is to prove it can boost sluggish output while retreating from promising, if risky, regions.

Is everything sacred in Canada?

20 October 2012

At first it was a hole in the ground - then the stock exchange and a DIY chain. Now the government has blocked a $5.2 bln shale gas deal - signalling to investors that the market for corporate control is effectively shut.

Uncontrollable gas troubles U.S. energy firms

14 September 2012

U.S. production keeps rising even though companies like Chesapeake promise to cut it. Blame efficient techniques and bad luck. But failure to curb supply means low prices, depriving large producers of cash to drill for more profitable oil and leaving smaller players vulnerable.

Indispensability of Chesapeake CEO is exaggerated

2 July 2012

Embattled CEO Aubrey McClendon owes his survival largely to a myth of unsackability. Despite numerous abuses, supporters contend his talent makes him indispensable to the energy group. This puts too high a value on the CEO and too little on Chesapeake’s vast asset portfolio.

Chesapeake gets pistol-whipping from shareholders

8 June 2012

Owners of the besieged U.S. gas giant voted overwhelmingly against renaming directors and the board’s executive pay plan, while favoring a slew of investor proposals to improve Chesapeake’s governance. It’s hard to see how Aubrey McClendon can keep running this circus.

Pricey Chesapeake medicine highlights its sickness

12 May 2012

The embattled energy firm is borrowing $3 bln at 8.5 percent to repay a loan whose terms might otherwise prevent asset sales. This buys time. But it makes even more obvious Chesapeake’s unsustainable reliance on selling choice assets to fund its persistent cash drain.

Pampered board shares blame for Chesapeake fiasco

9 May 2012

On paper the gas company appears to have a good mix of directors. But they didn’t just fail to stop CEO Aubrey McClendon’s excesses - they often approved. Time constraints and bumper pay and perks may have helped keep them subservient and led to them failing shareholders, too.

Cash-flow drain puts Chesapeake on fire-sale alert

8 May 2012

The ailing gas driller once again promises financial discipline and is braced for $20 billion of asset sales. But the firm’s forecasts for gas prices, capital expenditure and cash flow are both too rosy and too contradictory. That means more family silver will have to go.

U.S. natural gas looks irresistibly cheap vs oil

5 March 2012

With crude prices rising and gas sliding further, oil is now eight times dearer than gas based on energy content - the biggest gap since the 1950s. Global shifts dictate the price of the black stuff but, as news from Detroit shows, local market forces should work on American gas.

US gas driller stock still too hot for cold prices

12 January 2012

Natural gas prices in the U.S. are near decade lows and sliding. Yet despite Wednesday’s declines, gas drillers like Cabot - the biggest S&P 500 gainer last year - continue to trade on richer multiples than extractors of dearer oil. The current valuations can’t be justified.

U.S. energy bill beneficiary redefines going green

13 December 2011

Oil billionaire T. Boone Pickens and U.S. Representative Nancy Pelosi are oddly aligned. A fuel subsidy proposal, if passed, would make them both richer because of their stakes in a “green” firm that would benefit. Congressional trading rules need an overhaul now more than ever.

Coal industry blowing smoke with jobs claims

16 November 2011

A U.S. TV ad depicts Americans losing their jobs because of new pollution rules. The analysis is questionable even in isolation. But any loss for coal is a gain for other fuels like gas. And an estimated $200 bln in health savings from cleaner air counts for something, too.

Kinder pays top dollar to enter energy big league

17 October 2011

If regulators give the nod, a new $94 bln pipeline titan will be born, becoming among the biggest U.S. energy firms. Kinder is paying more than is justified by the synergies for El Paso. But Kinder’s chief has done investors proud in the past and is not to be underestimated.

Opportunity knocks for U.S. gas exporters

13 October 2011

With natural gas four times dearer in Asia than America, U.S. producers will be tempted to export. But the price difference must endure to justify the infrastructure investments needed. Still, rising global demand and booming U.S. drilling mean the numbers might now stack up.

Ohio oil promises new bonanza for Texas bankers

7 September 2011

The first takeover deal in the Utica shale may be modest, but it’s only a start. Some $38 bln of shale-related deals this year account for 80 pct of U.S. exploration M&A. If Ohio’s rock formation yields even half its touted oil trove, energy financiers should be sitting pretty.