Smells Good: The Case for Natural Gas

Source: Michael Fitzsimmons, Seeking Alpha (5/28/08)

So, comparing apples to apples on a BTU energy basis, the energy ratio would be 5,800,000/1,024,000 = 5.6 oil/gas [BTU]. The conclusion here is that, based purely on energy equivalency, natural gas is a bargain at today's prices. One could therefore make a decent bullish argument that natural gas prices need to rise to keep up with oil on a purely energy equivalent basis.

So much attention is being paid to the high cost of crude oil these days, is natural gas being overlooked from an investment perspective? As we all know, natural gas is the dominant heating fuel in a majority of US homes. Natural gas is a fuel for electrical power generation and an important feedstock for the fertilizer industry. Increasingly it is being used as a transportation fuel...

Certainly hurricanes Katrina and Rita impacted natural gas production, distribution, and prices for the periods shown. That said, the trend is clear: US nat. gas prices are rising and roughly 60,000 more wells were needed in 2006 to produce a slightly lower amount of nat gas as in 2002.

As I write this article, oil is trading at $128/barrel and natural gas is trading at $11.79 per thousand cubic feet, for a price ratio of 10.9 oil/gas. On an energy basis, according to the EIA website:

1 barrel of crude oil (42 gallons) = 5,800,000 BTU

1 cubic foot natural gas = 1,025 BTU

So, comparing apples to apples on a BTU energy basis, the energy ratio would be 5,800,000/1,024,000 = 5.6 oil/gas [BTU]. The conclusion here is that, based purely on energy equivalency, natural gas is a bargain at today's prices. One could therefore make a decent bullish argument that natural gas prices need to rise to keep up with oil on a purely energy equivalent basis...

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Source: Streetwise Reports (07/13/2020)

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"China's export quota could be opportunity for Canadian miners"

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."