NEW YORK - November 4, 2009 - Credit implications of pending greenhouse gas (GHG) legislation will be a mixed bag for U.S. energy and related sectors from a potential positive for natural gas producers to a serious challenge for domestic refiners, according to a new Fitch Ratings report.

Dominion Resources, Inc. (D) has asked the Federal Energy Regulatory Commission (FERC) to start pre-filing process for its Appalachian Gateway Project. The proposed project will transport natural gas produced in West Virginia and southwest Pennsylvania to storage fields and pipelines in Pennsylvania. The Appalachian Gateway project will cost around $600 million. Dominion expects to start construction work in 2011 and commence commercial operation in 2012. The project is fully subscribed by Marcellus Shale and other Appalachian natural gas producers. The total firm transportation delivery is estimated to be nearly 484,260 dekatherms of natural gas per day.  Dominion will build four new natural gas compressor stations and upgrade two existing compressor stations, which will add about 17,000 horsepower of compression capacity. Around 110 miles of new pipeline will be constructed under the project, which will start at West Virginia and end at Dominion and Spectra's jointly owned ...

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,

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Yesterday, one of the largest onshore contract drillers in the U.S., Patterson-UTI Energy, Inc. (PTEN) said its August 2009 drill rig count averaged 72, up from 65 in the previous month. The company operated 69 rigs in the U.S. and 3 in Canada in August, compared to 63 rigs in the U.S. and 2 rigs in Canada during July. Patterson’s activity levels in the U.S. peaked in early October 2008, with a rig count of 275. Since then, the company has witnessed a steep and quick decline on the back of decreased demand largely caused by lower commodity prices for natural gas. Favorable prices over the last few years led to increased natural gas drilling, with the total onshore rig count making a new all-time high in 2008. As a result, after remaining essentially flat for almost 9 years (1998-2006), natural gas production went up by ...

In the weekly report that always seems to move prices 5% one way or the other, the natural gas supply report showed a higher than expected supply in natural gas. a href="http://www.bloomberg.com/apps/news?pid=20601087amp;sid=aJ._taTKDeSE"Here's the story from Bloomberg/a:br /br /blockquoteNatural gas futures fell the most in two months after a government report showed a bigger-than- estimated increase in U.S. stockpiles. Supplies in storage gained 66 billion cubic feet in the week ended July 31 to 3.089 trillion cubic feet, the a href="http://www.bloomberg.com/apps/quote?ticker=DOENUSCH%3AIND" t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true"Energy Department/a said. Analysts forecast a gain of 61 billion. The total was a record for late July, based on weekly department data going back to 1994.br /br /“We have a lot of supply and it really weighs on the market,” said a href="http://search.bloomberg.com/search?q=Phil+Flynnamp;site=wnewsamp;client=wnewsamp;proxystylesheet=wnewsamp;output=xml_no_dtdamp;ie=UTF-8amp;oe=UTF-8amp;filter=pamp;getfields=wnnisamp;sort=date:D:S:d1" t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true"Phil Flynn/a, vicebr /president of research at PFG Best in Chicago. “The dollar ...

Houston, Texas-based Halliburton Company (HAL), one of the largest oilfield service providers in the world, has bagged a two-year contract extension from StatoilHydro (STO). The estimated value of the contract extension is approximately $450 million.   Halliburton had been awarded the first contract in 2006. The initial contract was for a two-year term with further extension options of three two-year periods.   Under the terms of the extended contract, Halliburton will provide fluids systems for multiple fields on the Norwegian Continental Shelf. This includes cementing services for 20 rigs and completion fluids for 16 rigs.   The contract will involve services from both of Halliburton’s business segments: Completion and Production as well as Drilling and Evaluation.   Halliburton is among the top three players in each of the product/service categories it offers and is present in all the major hydrocarbon-producing regions of the world.   We view ...

Earlier today, one of the largest onshore contract drillers in the U.S., Patterson-UTI Energy, Inc. (PTEN) said its June 2009 drill rig count averaged 60, the same as in the previous month. The company operated 58 rigs in the U.S. and 2 in Canada in June, compared to 59 rigs in the U.S. and one rig in Canada during May.Patterson's activity levels in the U.S. peaked in early October 2008, with a rig count of 275. Since then, the company has witnessed a steep and quick decline on the back of decreased demand largely caused by lower commodity prices for natural gas.Favorable prices over the last few years led to increased natural gas drilling, with the total onshore rig count making a new all-time high in 2008. As a result, after remaining essentially flat for almost 9 years (1998-2006), natural gas production ...

Now that the stock market has soared 40% from its March lows, almost no one can seem to remember what they were so worried about. By contrast, now that the price of natural has collapsed 40% in the last seven months, almost no one can remember why they ever worried about an energy shortage.

Mr. Market is about to heal America’s collective amnesia.

Investors will once again remember why they were selling stocks last March, and they will also remember why they used to invest in natural gas.

Share prices have gained a lot of ground during the last few months, even though the economy has not. The major averages have rallied about 40%, but many stocks are up a whole lot more than that. Seventeen of the thirty-three stocks I have recommended to the subscribers have gained more than 50% since those March lows. Eight are up

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On Monday, June 29, interim service began on REX East, the eastern section of Kinder Morgan Energy Partners' (KMP) 1,679-mile multi-state Rockies Express Pipeline (REX). With a capacity of 1.6 billion cubic feet per day (Bcf/d), natural gas started flowing on the 444-mile segment of the $6.6 billion pipeline that runs from Audrain County, Missouri, to the Lebanon interconnection point in Warren County, Ohio. Earlier, during May last year, the western section of the pipeline (REX West) came online. The 713-mile pipeline runs from the Cheyenne hub in Weld County, Colorado, to a major delivery point in Brown County, Kansas and has a capacity of 1.5 Bcf/d.

The remaining portion of the 639-mile 42-inch diameter Rex East pipeline, which will end in Clarington, Ohio, is expected to be operational by November 1, 2009. When fully completed, the entire 1,679-mile pipeline will be capable of transporting roughly

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Our near-term (6-18 months) outlook for the coal industry has improved somewhat from our previous neutral sentiment to a more positive undertone. Based off of various recent economic indicators, the U.S. economy appears to be stabilizing. Although the rest of 2009 is likely to continue on a path of weak steel and electricity demand relative to 2008 levels, several factors should help lift the coal producers in 2010.

Reductions in capex spending from both coal and natural gas producers, the weakening of the U.S. dollar and most importantly, increased steel and electricity consumption in '10 should all be positive catalysts for the coal industry next year.

As stated in earlier outlook summaries, benchmark metallurgical prices for fiscal 2009 have been set around $120/mt -- off markedly from the $300/mt level seen in 2008 but still above historical met price levels. This means that in 2010, producers will still realize triple digit average

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