Natural Gas

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.