Natural Gas

Reborn Chesapeake starts to hit its stride

20 May 2014

A year to the day after replacing profligate CEO Aubrey McClendon, the U.S. oil and gas explorer secured a two-notch credit rating upgrade to nearly investment grade. By slashing debt and simplifying Chesapeake, new boss Doug Lawler is winning over stock and bond investors alike.

Regulatory dithering can cost the economy dearly

22 Apr 2014

The U.S. government’s continued deferral on the Keystone pipeline decision is a case in point. One year’s economic benefit from the project may be $1.8 bln; if the answer is no, the energy system can be optimized another way. Win or lose, regulators need to make up their minds.

Batista’s proposed gas sale looks like a giveaway

25 Oct 2013

The fallen billionaire’s OGX seems poised to unload wells for $100 mln, or barely half their value. They already generate some $1 mln of revenue a day, with plenty of untapped capacity. As demand soars in Brazil, bargain hunters stand to profit handsomely from the tycoon’s woes.

Helium fiasco deflates case for strategic reserves

27 Sep 2013

The U.S. government stockpiled the gas for a fleet of blimps that never flew. Now it’s dumping supplies at cut-rate prices, creating market distortions and shortages. A legislative fix is in the works, but it’s a reminder that hoarding resources can be a volatile strategy.

Privatisation snag could push back "Grecovery"

11 Jun 2013

Athens will have to lower its privatisation revenue targets for 2013 after a tender for state-controlled natural gas company DEPA attracted no bids. Coming after some good news, this setback will hit confidence as well as revenue. The Greek recovery could be delayed yet again.

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 Apr 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 Jan 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 Nov 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 Oct 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 Sep 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 Jul 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 Jun 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 Mar 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 Jan 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 Dec 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 Nov 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.