One Natural Gas Company Worth Looking Into… Now And Later

Tony Daltorio, Investment U Research

These days, the US natural gas market finds itself weighted down by doom and gloom.

With North America choking on the stuff and underground storage of natural gas potentially approaching 4 trillion cubic feet, pundits keep saying that the market will see prices plunge to $2 per million BTU, where it will stay for years.

To contrarian investors such as myself, that type of talk couldn’t sound any more sweet…

Despite the gloom, we can still see a few glimmers of light in the natural gas market, such as drilling grinding to a multi-year low, barely a year after reaching its all-time high. Or the fact that some producers have voluntarily reduced output, deeming the present value of gas in the ground superior to current prices.

One way or another,

...

For Immediate Release

Chicago, IL – September 17, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include D.R. Horton (DHI), KB Home (KBH), Pulte Homes (PHM), Allstate (ALL), Hartford Financial Services (HIG), Travelers (TRV), Loews (L), Humana (HUM), Stericycle (SRCL), C.R. Baird (BCR), Celgene (CELG), Gilead Sciences (GILD), Anadarko Petroleum (APC), EOG Resources (EOG), AK Steel (AKS), Nucor (NUE), U.S. Steel (X), Fifth Third (FITB), Regions Financial (RF), Suntrust Banks (STI) and Zions Bancorp (ZION).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Third-Quarter Earnings Forecast

Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

Per share profits for the S&P

...

The commodities markets have been kicked into high gear. As America’s lenders change their mind, the world’s mining companies are on a surefire path to riches.

If you can’t farm it, you have to mine it. It is a great message, no matter if you are an investor or an out-of-work cowboy.

Riding through the streets of Alaska’s ever-wet capital, you see all sorts of bumper stickers. There are three main categories – fishing, mining and Sarah Palin.

It is the miners getting all of the attention this week.

There are several reasons the world’s mining industry is opening a big ‘ole bottle of bubbly, but none more poignant than the fact that America is shelling out debt faster than a hot-rod blackjack dealer unloading his deck.

As Uncle Sam goes “all in,” the folks paying for Washington’s lavish lifestyle are getting nervous. For proof, I need just one set of numbers.

In July, foreign

...

Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

Per share profits for the S&P 500 are projected to fall 15.4%. The median company is forecast to report a 14% drop in per share earnings. (The difference being that the S&P 500 forecast is a weighted projection.) More than 340 companies may have experienced a year-over-year drop in profits.

On a revenue basis, things are not much better. Median company sales are forecast to have dropped 7.2%.* More than 360 companies are expected to report a year-over-year drop in earnings.

It's important to realize that during July and August 2008, the economy was in fairly good shape. Lehman did not collapse until September 2008. Furthermore, the credit crunch's grip severely tightened over the 2-month span of September and October 2008. As a result, many companies are now facing tough

...

ConocoPhillips (COP) recently received approval from federal officials to pull a collection of North Slope oil and gas leases into a new oil-field unit, a predecessor to development and production. For this purpose, the company partners with Anadarko Petroleum (APC). The leases are in the National Petroleum Reserve (Alaska) and on the western side of Alaska's North Slope. The new oil-field unit, named Bear Tooth Unit, includes 23 leases and approximately 105,000 acres, located northwest of the company’s Mooses Tooth Unit. The company said that both the units have sites of known oil discoveries. While production from the Mooses Tooth Unit is expected to commence sometime between 2012 and 2014, Bear Tooth would be online later. ConocoPhillips has recently relinquished a few leases that do not fit within its strategic plan based on the potential for commercial development. ConocoPhillips has significantly transformed its asset ...

Oil major BP Plc (BP) has made a huge oil discovery in the deepwater Gulf of Mexico (GoM). The discovery well is located at its Tiber prospect, approximately 250 miles (400 kilometers) southeast of Houston and is in 4,132 feet (1,259 meters) of water. The well had oil in multiple Lower Tertiary reservoirs. The Tiber prospect is operated by BP, Petrobras (PBR) and ConocoPhillips (COP) with their working interest of 62%, 20% and 18%, respectively. Tiber is BP's second significant discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following its earlier Kaskida discovery in 2006. Kaskida is operated by BP, Anadarko Petroleum (APC) and Devon Energy (DVN). The discovery may signal new prospects in the deepwater Gulf of Mexico. While onshore oil exploration gets saturated over time, oil and gas giants and state-run oil majors scramble to ...

Anadarko Petroleum (APC) posted better-than-expected numbers for the second quarter. It reported a net loss (continuing operations) of 47 cents per share, lower than the Zacks Consensus Estimate of 66 cents. The company has raised the sales volume guidance for 2009 by 2-3 million BOE to 210-215 million BOE and kept the capex budget intact at $3.9-$4.4 billion.   Anadarko’s deep and diversified asset base, low-risk and predictable production profile, global business development approach and brilliant execution capability reflect visible upside over medium-to-long run. Moreover, a strong balance sheet, investment-grade rating and access to liquidity will enable the company to pursue new strategic and tactical growth opportunities, particularly at a time when valuations are depressed.   Anadarko has been continuously evaluating capital allocations to ensure that the on-track projects are value accretive. It has been able to preserve financial flexibility and drive down service costs to stay competitive ...

Anadarko Petroleum (APC) posted better-than-expected numbers for the second quarter of 2009 on higher sales volumes, lower lease operating expenses (LOE) and improved drilling efficiency. Net loss from continuing operations were 47 cents per share, lower than the Zacks Consensus Estimate of 66 cents. It reported a net income of 3 cents per share in the same period last year.   Sales volumes went up 12% to 56 million barrels of oil equivalent (BOE) or 617 thousand BOE per day, above the quarterly guidance, primarily due to higher volumes in the Rockies and Independence Hub and higher natural gas liquids (NGL) recoveries at the Chipeta Cryo plant in Utah. Daily sales volumes of crude oil & condensate, natural gas and NGL averaged 182 thousand barrels (down 7%), 2.3 billion cubic feet (up 25%) and 46 thousand barrels (up 12%), respectively.   Revenues dipped 37% to $1.7 billion due ...

A government report that suggested the economy shrank at a slower pace than feared failed to push stocks higher on a lackluster Friday but indexes managed to end the month on a solid footing, spurred by hopes that the recession is losing its force.  The big July saw the Dow Jones industrial average surging 725 points or 8.6% - its best July since 1989, and the broader S&P 500 index gaining 7.4% for its best July run since 1988.  The S&P500 has now recorded its most remarkable five-month performance since 1938, holding 46% above its 12-year low set in early March.

This morning’s US stock futures indicate a sharply higher opening, helped by positive signs emanating from overseas markets.  Today, Chinese stocks hit a 14-month high after data showed manufacturing activity is expanding in the country.  The Shanghai Composite Index rose 50.53 points, or 1.5%, to close at 3,462.59

...

On June 10, 2008, Alexei Miller, CEO of Russia’s Gazprom, told a French audience that crude oil prices would reach $250 a barrel in 2009. His former Gazprom cohort and then freshly minted Russian prime minister Medvedev did him one better… pegging crude oil prices at $500. Was it wishful thinking? Did the gentlemen overdose on “hard-money” investment newsletters and Peak Oil Theory? We may never know.

After dropping from $147 last July close to $30 this past winter, crude oil is now trading within a reasonably tight track around $40 and $57.

Now it’s on the move again, breaking through $60 right at the beginning of the summer driving and hurricane seasons.

But oil companies’ proud profit margins of yesteryear have disappeared… along with the easy credit that allowed investment banks and hedge funds leverage crude prices to record highs.

Suddenly, not even the most pink politician is talking punitive taxation against

...