MGM Energy Corp MGMCF

Natural Gas Cartel-first strike

[JR5]

Just a sample of what to expect in the future?

The Ukrainian negotiating team remained in Kiev and hasn’t said when it plans to return to Moscow, Gazprom spokesman Sergei Kupriyanov told reporters today. Talks between the two sides on the price of gas deliveries to Ukraine for 2009 and transit fees for Russian gas to Europe through the country broke down on Dec. 31, and Gazprom cut supplies of the fuel to Ukraine yesterday.

Russia, which supplies a quarter of Europe’s gas, 80 percent through Ukraine, is seeking to avoid further damage to its reputation after its August war with U.S.-allied Georgia. This week’s cutoff echoed a similar dispute in 2006 which disrupted supplies to Europe, calling into question Russia’s reliability as an energy supplier.

If the issue is not resolved soon would expect natural gas prices to move higher, especially as stored gas is drawn down in Europe. They will have to meet the shortfall with gas from other members of the Cartel via ocean tanker shipments. Nice prospect at the start of winter.

Monday the answering service tells me the office staff will be back and one should be able to get some questions answered regarding drilling progress. I'm hoping they started!

Chees,

JR.