Gas Investing News

By Duncan Sutherland- Exclusive to Gas Investing News

Natural gas futures prices subsided over the past week. Down more than a dollar since the 23rd, it seems likely that a further drop is forthcoming given continuing consumer malaise in the United States. Bloomberg is reporting that “Inventories gained 70 billion cubic feet” in the country last week, suggesting demand destruction is continuing.

The drop is welcome news for many other sectors, especially power utilities and energy-intensive resource producers. Utilities like NRG Energy Inc (NYSE:NRG) saw a 13% decline in 2Q profit partly due to the increased bite of high input costs.

NYMEX margins on Henry Hub and other natural gas futures are due to change at the close of business Tuesday July 29th. For a more detailed list, see here.

Canadian junior producer New Shoshoni Ventures Ltd. (TSX.V:NSV) has received mixed news in the completion report on a North-eastern British Columbia exploration well. The report noted some formation damage due to a water leak during hydraulic fracturing, but also found that formation pressure was similar to a producing field nearby, suggesting the two are connected. This area of BC is poised to become a valuable component of Canada’s natural gas production, if the July’s lease auction is any indication. Investors looking for some exciting junior opportunities should examine the BC Ministry of Energy, Mines and Petroleum Resources list of purchases here.

Good news for the venture partners Liquefied Natural Gas Ltd (ASX:LNG), Golar LNG Ltd (NASDAQ:GLNG) and Arrow Energy Ltd (ASX:AOE). Royal Dutch Shell (NYSE:RDS.A) is eyeing their Northeast Australian coal bed gas export project hungrily. With Shell already holding 30% of Arrow’s Queensland licences, the two appear to be cooperating nicely. The export terminal is projected to handle 1.5 million metric tons per annum, and would be nicely situated to serve markets in South, Southeast, East and archipelagic Asia.

SempraEnergy (NYSE:SRE) has agreed to buy EnergySouth Inc (NASDAQ:ENSI). The move will cost $510 million in cash, giving ENSI’s shareholders a generous $61.50/ share. Most attractive to Sempra was ENSI’s subsidiary EnergySouth Midstream, Inc; which has storage capacity of 57 billion cubic feet.

A great article in the New York Times about the Haynesville Shale in the Southeast US is worth reading if you’ve made it this far into the article.

Chile’s 2007 tender of leases in Patagonian south will begin to see activity as drilling starts this August. Companies like Apache Canada Ltd., a division of Apache Corp (NYSE:APA) and Methanex Corp (TSX:MX) see promise for the region, which has not been extensively explored in the past.

I would be remiss not to mention the United States Geological Survey’s report on hydrocarbons in the Arctic Ocean. Key findings were that there is in fact a large amount of gas and oil north of the Arctic Circle, and most of it is clustered within the accepted territorial waters of America, Canada and Russia. An article examining the import of the study in more depth is forthcoming, and should be available on www.gasinvestingnews.com soon.