The Natural Gas Shakeout

Source: Fortune, Shelley DuBois (11/10/10)

"Natural gas prices have made the entire sector ripe for takeover."

If you didn't think America's energy policy battles could get any more confusing, consider this: Some fossil fuel companies are pulling for a carbon tax. Specifically, companies that focus on cleaner-burning natural gas would benefit from subsidies for energy that generates less carbon dioxide.

However, squeezing a carbon tax through a pro-coal Republican majority means that the natural gas industry has its work cut out for it.

Overproduction has led to a natural gas surplus. According to the U.S. Energy Information Administration, the United States had a record-setting amount of natural gas in storage this year, about 3.8 trillion cubic feet.

The makings of the surplus started in 2003 with a new well stimulation method, horizontal hydraulic fracturing, which enabled drillers to get more gas out of wells. Companies started drilling and producing like crazy.

Recently drops in nat gas prices are making it competitive with coal, but natural gas needs more than a favorable cost comparison to compete.

Coal has not only an infrastructure for transport and distribution, but also powerful lobbyists. "The natural gas lobby just hasn't gained enough traction to overcome coal's power," says Joe Magner, analyst with Macquarie Capital USA. They're developing it, but it will be a long time until natural gas is woven into the fabric of American fuel.

Magner thinks gas-geared companies can do a several things to survive: move back towards oil assets, prepare for a dip in gas prices by hedging and watch spending on new projects, keeping plenty of accessible cash. Or they'll need to sell to a bigger oil company.

America will eventually need a non-oil fuel, says Segrich, but it's clear to see that shift will take time. The brief dip in natural gas prices made nearly the entire sector ripe for being scooped up and bought out.

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Source: Streetwise Reports (07/13/2020)

Streetwise Reports is offering 100 investors—at no charge—the opportunity to meet via Zoom with executives of precious metals companies as they discuss recent developments at their companies and upcoming catalysts.

"China's export quota could be opportunity for Canadian miners"

Latin America: Six Gold Juniors Amass 100M+ Ounces
Source: Marc Davis, BNW News (05/25/2010)

Latin America, the world's last great mineral frontier for prolific gold discoveries, is proving a godsend for some lucky investors.

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."

I haven’t spoken to my old mining stock friend, noted and universally respected gold stock guru, Bob Bishop, about Rare Element in a year, but I hear he is still a supporter and very large shareholder. I don’t believe he will hold it against me to remind you that this was one of his favorite holdings when he left the newsletter writing business. . .

It's Only the Beginning for Uranium
Source: www.financialinsights.com (06/03/2005)

Dr. Richard S. Appel, author of Financial Insights, first became bullish on uranium in mid-2003, when it appeared obvious that its supply versus demand equation was fated to seriously drive higher its price. Since then, a series of events in the uranium industry has led Appel to believe that uranium prices will reach never before seen levels.

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