Natural Gas

National Grid’s $11 bln green switch looks smart

18 Mar 2021

The UK infrastructure operator is buying a big chunk of the local electricity distribution network, paid for by selling some of its U.S. arm and UK gas assets. CEO John Pettigrew is betting power assets will grow faster as the energy transition speeds up. It’s worth paying for.

Naturgy offers cut-price route to green transition

26 Jan 2021

IFM is spending 5 bln euros on 23% of the Spanish utility. Naturgy’s depressed shares and the Australian fund’s use of debt will juice its returns. Moreover, it’s a cheaper way of surfing the renewable energy wave than boarding rivals like Iberdrola.

Corona Capital: Vaccine dibs

21 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Vaccine prioritization is about to get competitive.

Aramco pipeline spinoff plan is born of necessity

14 Oct 2020

The $1.9 trln oil giant is echoing Abu Dhabi-based peer ADNOC by discussing a part-sale of its distribution network with BlackRock and others. Aramco’s foreign investors’ dividend is safe. But financing state payouts and other activities requires the $10 bln it could raise.

Centrica sale stresses scale of CEO repair job

24 Jul 2020

Shares in the UK utility jumped 20% after it offloaded its U.S. arm to rival NRG Energy for $3.6 bln. The cash helps CEO Chris O’Shea lower debt and a pension deficit which together total 4 times estimated 2021 EBITDA. Declining earnings still make it hard to restart dividends.

Corona Capital: Natural gas, Disney, Brazil

19 May 2020

Concise views on the pandemic’s corporate and financial fallout: Investors are too optimistic about natural gas; theme-park veterans take key roles at Disney; and Sao Paulo’s idea of bringing forward holidays to improve social distancing proves confusing.

Energy debt woes are a canary in the shale mine

27 Jan 2020

U.S. oil and gas group McDermott is filing for bankruptcy and Chesapeake may default after undisciplined deals left them crumbling under piles of debt. Low natural gas prices are a bigger problem than oil right now. But their woes are a warning for the likes of Occidental.

Britain’s blackout whodunnit has multiple suspects

20 Aug 2019

An initial report sheds inconclusive light on a major recent power cut. Wind and gas-fired generators, network distributors, and National Grid may all have goofed. One thing is clear: the UK needs to go big on battery storage to accompany its commendable rush to renewables.

Gazprom payout pledge yet to catch fire

31 May 2019

After a management shake-up, the $78 bln gas company says it will pay out half its net income in dividends in coming years. That would please the state, which has been pushing the issue. But the implied dividend yield of 15% suggests investors doubt the bonanza will happen.

Private equity’s North Sea bet safer than it looks

9 May 2019

Buyout groups are pumping billions of dollars into the hydrocarbon field off the UK’s eastern coast, as oil majors depart. Peak fossil fuel demand and decommissioning costs complicate the usual private equity exit strategy. But the acquirers also have ways to minimise the risks.

Siemens self-medicates with weak activist tonic

8 May 2019

The $96 bln industrial giant’s plan to slim down by spinning off its power business looks designed to pre-empt a shareholder rebellion. But the new entity’s complex structure and its odd bundle of clean and dirty energy assets could still draw the attention of a pushy investor.

Shell’s low-carbon shift yet to charm investors

2 May 2019

The Anglo-Dutch group had a more profitable quarter than Exxon and is better placed for a greener future. But its valuation lags that of its U.S. peer, which finds more new reserves. Investors seem to care more about how much oil is pumped now than when crude demand will peak.

Engie gets the gas but without the gearing

8 Apr 2019

The French utility’s $8.6 billion deal to buy Petrobras’ Brazilian gas pipelines enables expansion in one of its core areas. Doing so with Canada’s CDPQ limits the extent it needs to push up its debt. That should help keep its new three-year strategy on the road.

Abu Dhabi’s $6 bln oil deal is a three-way hedge

29 Jan 2019

The emirate has sold 35 pct of its oil group’s refining arm to two European producers. Italy’s Eni gets to offset a heavy reliance on exploration, while Austria’s OMV gets non-European refining. Abu Dhabi hedges its dependency on crude by turning crown jewels into cash.

Shale gas industry hopefuls face rock-hard barrier

5 Oct 2018

Fracking is about to make its debut in the UK. The practice of extracting gas from shale rock is hailed as likely to put the country on the road to fuel self-reliance. But the industry faces many obstacles, and investors should be sceptical of the scope for gushing returns.

Hot summers are least of UK utilities’ problems

12 Sep 2018

SSE’s shares dipped after high temperatures and gas prices forced a profit warning. A cap on tariffs for retail customers will hit the sector further. And all energy companies have to work out how to cope with the falling cost of renewables and competition from new entrants.

Gas mega-merger hubris deflated by regulators

22 Aug 2018

Linde needs to sell more assets to close its $83 bln tie-up with Praxair. That means hurried disposals and fewer savings. The rationale for creating the world’s largest gas supplier holds, but the mess shows shareholders should apply a hefty discount to ambitious dealmaking.

China’s homegrown shale is worth the bother

27 Jun 2018

The People’s Republic produced a fraction of U.S. shale gas output in 2017. Terrain issues, deep wells and limited data explain why, yet better domestic technology and state support are pushing production up. With trade tensions rising, Beijing's costly hedge looks sensible.

Permian drillers tap new resource in wastewater

14 Jun 2018

U.S. shale operators extract four times more water than oil from wells in West Texas. Disposing the dirty liquid is costly and threatens growth. But some companies are treating and reusing water to cut costs. A few even could turn this into a second business in a parched world.

CKI’s $10 bln bid can snare Australian prey

13 Jun 2018

The Hong Kong giant is circling Australia's top gas pipeline firm. A 33 pct premium ought to satisfy APA’s board, especially as tougher rules bite. The odds are good for Victor Li’s first big deal since he took over from father Li Ka-shing at parent company CK Hutchison.