Natural Gas is a strong buy as the annual Spring sell-off
begins. Traditionally Natural Gas gets sold off as the end of
winter approaches, however this tradition will come in for some
As with most of our investment decisions we are not looking at
the short term, we are always looking to buy quality assets that
have a good long term outlook. At the current prices, Natural Gas
fits that criteria.
Nymex Natural gas prices fell yesterday as concentration
switched from the expiring February contract to March. The Henry
Hub March contract fell over 3% as warmer weather loomed in the
Midwest in the latest short term forecasts. Gas opened at $4.796
and fell as low as $4.576 before the pit closed at $4.598.
Support today is seen at $4.534 and $4.494 with resistance at
$4.666 and $4.702.
Why Natural Gas be a long term winner?
World primary energy consumption grew by 45 percent over the
past 20 years, and is likely to grow by 39 percent over the next
20 years. Global energy consumption growth averages 1.7 percent
p.a. from 2010 to 2030, with growth decelerating gently beyond
2020, according to the BP Energy outlook 2030.
In 2009 the world's proven gas reserves amounted to 187.5
trillion cubic meters, which at current production levels will be
sufficient for the period to 63 years.
As expected, natural gas by 2030 will be a fuel observing the
most rapidly growing demand.
Asia will be the main source of production growth and demand
for gas. China's share will amount to 56 percent growth in gas
demand in the region.
The share of the Middle East, which is the second largest
source of production growth and demand for gas in 2030, will
comprise 17 percent of global demand for fuel compared to 12
percent in 2010. Its share in the growth of global gas production
will increase from 15 percent in 2010 to 19 percent in 2030.
LNG imports will grow. Annual growth in LNG supply will amount
to 4.4 percent by 2030. Its share in world gas supplies will
increase from 9 percent in 2010 to 15 percent in 2030.
In Europe, the share of LNG in total imports will increase
from 30 percent in 2010 to 42 percent in 2030.
HCM Pro Trader Chart UNG
United States Natural Gas Fund, LP NYSE:UNG, High Plains Gas
Inc OTC:HPGS, Western Gas Partners, LP NYSE:WES
here are the best buys in natural gas NYSE:UNG, OTC:HPGS,
United States Natural Gas Fund, LP (USNG) is a limited
partnership. The Company is a commodity pool that issues limited
partnership interests (units) traded on the NYSE Arca, Inc. (the
NYSE Arca). The investment objective of USNG is for the changes
in percentage terms of its units' net asset value (
) to reflect the changes in percentage terms of the spot price of
natural gas delivered at the Henry Hub, Louisiana as measured by
the changes in the Futures Contract on natural gas traded on the
New York Mercantile Exchange (NYMEX) that is the near month
contract to expire, except when the near month contract is within
two weeks of expiration, in which case the futures contract will
be the next month contract to expire. The Company's general
partner is United States Commodity Funds LLC (the General
Partner) and is responsible for the management of USNG.
High Plains Gas, Inc. Increases Gas Production OTC:HPGS
The Company's average production for previously producing
wells increased 129%, as compared to those wells that had not
The re-enhancement program included well cleanouts, pump and
blower changes and other activities to initiate and increase
existing production. Of the total wells in the enhancement
program, 10 wells with prior natural gas production had a net
increase of 4,289 Mcf (thousand cubic feet) for the month after
re-enhancement efforts, for an average increase of 129%.
The 12 wells that did not have gas production prior to
February 2010 added 4,821 Mcf per month to High Plains natural
gas output after restarting took place.
"We are very pleased that we were able to increase production of
previously working wells by 129%, showcasing our great success
with re-enhancement and refurbishment processes. As we continue
with our re-enhancement programs in other fields, we plan to
continue to increase our gas production capabilities," said Mark
Hettinger, Chairman of High Plains Gas. "With our recent North
and South Fairway acquisition of over 1,600 wells, we already
have targeted over 600 wells for re-enhancement, which is
expected to begin in early 2011."
About High Plains Gas, Inc.
High Plains Gas, Inc. is a Gillette, Wyoming based energy
company actively engaged in the acquisition, development and
production of natural gas primarily in the Powder River Basin.
Through its wholly-owned subsidiary CEP - M Purchase LLC, the
Company owns the former Marathon "North & South Fairway"
assets. These assets consist of 1,614 Coal Bed Methane Wells with
associated flow lines and over 155, 000 net acres. This combined
with the Company's existing 92 natural gas wells gives the
company a strong foundation in the natural gas industry. High
Plains Gas will pursue expansion opportunities for the profitable
production and transmission of natural gas. High Plains Gas
believes it has unique expertise and experience in the
refurbishment and reactivation of wells that produce natural gas
from coal bed methane formations.
Western Gas Partners, LP NYSE:WES
Western Gas Partners, LP (Partnership) is a limited
partnership organized by Anadarko Petroleum Corporation to own,
operate, acquire and develop midstream energy assets. The Company
is engaged in the business of gathering, compressing, treating,
processing and transporting natural gas for Anadarko. As of
December 31, 2009, its assets consist of nine gathering systems,
six natural gas treating facilities, four gas processing
facilities, one natural gas liquid (NGL) pipeline and one
interstate pipeline. The Company's assets are located in East and
West Texas, the Rocky Mountains and the Mid-Continent. In July
2009, the Company acquired a 51% interest in Chipeta Processing