Natural Gas – Can it get any Worse?

29-Mar-2012 | Reggie | Canadian Investing Commodities Oil & Gas

Today US natural gas futures hit a 10 year low at $2.16 per MMBTU (million british thermal units) and $1.59 here in Alberta.  This should not come as much of a surprise to anyone who has been following the market for the gas.  Production has remained at or around record highs as new technologies flourish and allow for extraction through unconventional means, along for the high demand and price for Natural Gas Liquids (of which Natural Gas is a byproduct).  Add to this, winter in North Americawas one of the most mild in years leaving demand for gas much lower than normal.

 

This leads to the question, how low can it go?  Some analysts think it might not be long until gas producers are paying consumers to take the product off their hands.  Storage tanks are completely full and there is no where to send the massive amounts of gas being produced.  This is definitely not the ideal situation as the economics of many of these gas wells allow for profits to be made even at these rock low prices, but with demand where it is, there is really no choice but for prices to continue to decline until exploration halts and wells are shut in.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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News Tidbits

14-Oct-2011 | Reggie | Asia Banks Bonds Canadian Investing Commodities

 

Canadian banks managed to escape the debt crisis of 2008 without much trouble thanks to their safe balance sheets and relatively high capitalization ratio.  That safety is paying off 3 years later as banks in Europe are once again struggling with high debt levels.  In order to raise capital, Euro banks are unloading assets and Canadian banks are in great shape to snap those up.  So far RBC has grabbed up some assets from Dutch bank Dexia and will probably get more.

 

Inflation in China is down slightly from their highs which came as a bit of a relief to Chinese authorities who have been struggling hard to get rising prices under control.  Over the past year, China has constantly raised interest rates and bank reserve rates in an effort to get inflation under control and it finally seems to be working.  Food prices are still up significantly which means that there likely won’t be any rate decreases in the near term future.

 

Bill Gross: “This year is a stinker.” This comment was made by the world’s biggest bond manager in his October newsletter.  He attributes the poor performance to investors moving into US government bonds as European debt issues continued.  The PIMCO bond fund was positioned to perform best in a scenario of about 2% global growth.

 

Oil price rise over $3.00 thanks to strong economic data released today.  The price increase is being mainly attributed to strong US consumer spending, increased bank lending in China, and the G20 meeting where the European debt issues continue to

 

Occupy Wall Street continues in New York and spreads throughout the world.  The protesters that have been basing their operations out of Zuccotti park will be allowed to continue to camp out in the park thanks to the Canadian real estate trust, Brookfield Asset Management.  Brookfield owns and controls the park in downtown New York.  The movement has gained more momentum as folks and businesses continue to make the endorsement and activists spring up in different cities throughout the globe.  The Canadian Auto Workers union is one of the latest to give their encouragement to the movement.

 

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Natural gas for Buses and Trucks!

15-Apr-2011 | Reggie | Green Investing Market Strategies Oil & Gas

Encana Corp is one of the biggest explorers and producers of natural gas out there.  Last year Encana spun off their oil production into another company, Cenovus making Encana basically a pure gas play.  As a result their fate has been tied very closely to the price of natural gas something that has been evident thanks to ECA’s stock price recently.  Rather than sit around with their wells shut in waiting for prices to rebound before turning the taps back on, Encana is taking action to change their destiny.

One way that Encana can improve their sales is by increasing demand.  Yes, its that easy.  Encana has been a big proponent of coverting vehicles to natural gas and putting the infrastructure in place to make that possible.  With gasoline prices back up over a $1.00 a liter and over $4.00 a gallon in the United States Encana’s plan is getting a very warm reception.  There is currently a huge abundance in natural gas making this a very logical step forward for the industry.  Environmentalists should be happy as well thanks to natural gas being a relatively clean burning fuel.

 

So far commercial trucks and buses are the main target for the conversion and have to potential to increase the demand for natural gas by a substantial amount.  I absolutely love how Encana is putting their future in their own hands and not relying on the whims of the market.  If this catches on, which there isn’t really any reason it shouldn’t, it will change the market for natural gas and gasoline forever.

 

For more information check out the Globe and Mail’s article here

 

 

 

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Natural Gas is Everywhere!

04-Jan-2011 | Reggie | Oil & Gas USA

One of the major stories of 2011 is going to be natural gas and not necessarily because the companies that are producing it will be ultra successful. Thanks to new technologies and exploration natural gas is becoming available just about everywhere in the world. The latest find is offshore Israel which has the potential to make Israel energy independent for the next 100 years. Shale gas is looking to become a major change in the United States energy picture as well. Its looking like shale gas will soon compose a major part of the US energy needs making them far less dependent on foreign imports. Geologists estimate that the Marcellus field that comprises a pretty sizeable chunk of the north eastern United States contains upward of 500 trillion cubic feet of gas. With present technologies they estimate about 10% of that is recoverable, which would be enough to meet the US energy demands for 2 years. With new drilling and fracturing techniques emerging all the time, the amount recoverable will likely increase as well. The Marcellus isn’t the only shale play in the United States either. Shale plays have been discovered in Michigan, Texas, Oklahoma, Alabama, Arkansas, Colorado, Louisiana, and Illinois. There are a couple major reasons that these shale plays will be pursued and developed. One is energy independence. Although Canada is a safe, and reliable trading partner, energy is of the upmost importance to a nations security. The other is for economic reasons. Jobs will be transferred to south of the border and the reliance will be eliminated. This poses a pretty scary picture for Canadian producers. We only use a small fraction of what we are able to produce and ship the rest south of the border. With the United States becoming increasingly independent, we will have to look for new avenues to sell this gas. The market for natural gas is already oversupplied with many producers opting to shut in the wells rather than sell the gas for a loss. The only 2 hopes for the Canadian natural gas industry is the increased use and adaptation of LNG or the conversion of coal fired power plants to natural gas. Both will take a long time to develop which will means Canadian natural gas is in for a rough couple years.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Could Tag Oil be the next ‘It’ stock?

20-Oct-2010 | kate | Commodities New Zealand Oil & Gas Stocks

Tag Oil is a “pure play” exploration and production company that has over 2 million acres in the Taranaki Basin of Northern New Zealand. The basin is a mature proven producing basin that when compared to Canada is highly unexplored. Across two of their 100% owned acre blocks holds an estimated 100 million bbl of original oil in place. Their East Coast Basin is seen as “game changing” play for Tag as it is literally “leaking oil an

d gas”, and holds similar characteristics to both the Bakken and Paris Basin Liassic. The East coast basin has the potential for 12.7 billion barrels of unconventional and 1.7 billion barrels of conventional oil.

TAG also holds a major gas resource in Taranaki Basin called Cardiff and will be applying a multi stage frac to access the reserves. Natural gas prices in New Zealand have been rising steadily and are currently around NZ$9.25/MCF which is roughly equal to $7.00 American.

TAG is currently producing 490 boe/d and is expected to reach 1000 boe/d within three to four months.

TAG recently did a $20 million financing and since has been working on initiating several work programs to be carried out from the remaining 2010 ye

ar into 2011 in the Cheal and Broadside blocks within the Taranaki Basin. Their strategy is to continue building oil production and cash flow through lower risk development and exploration projects prior to exploration activity plan for 2011 in the East Coast basin.

TAG stock price has been moving steadily since September when it was trading around $2.50. TAG oil was trading at $4.90 at 10:28am MT today.

TAOchart

TAG Oil Chart

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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