Natural Gas - Coming SoonHi all... I have received this interesting message from Pinnacle Digest which I thought was worth sharing. Great forward looking perspective on Natural Gaz. Join in at a discount with V.YAN while the stock is still at a discount and before the new Nat Gaz buzz word makes is way everywhere. Upside is $$$$. Good reading.
_______________
PINNACLEDIGEST.COM
Dear member,
The key to investing is to buy low and sell high; an obvious statement, no doubt. But having the fortitude to buy equities when nobody else wants to, and to sell when everyone wants to buy, is easier said than done.
The old saying "its not what your buying, but when you buy it" rings very true. Just look at the market over the past 7 months.
Investors with the guts to buy stocks when valuations were so unrealistically low back in March and even December are now reaping huge rewards - rewards not seen in decades. For those strong willed investors, the recession and market crash of 2008 and early 2009 was a blessing; a blessing that turned into boat loads of cash. We all wish we had bought on March 6th or 7th when most major indices, companies and many commodities were in their darkest hour. Unfortunately, not all of us did.
To the investors that remained on the sidelines and have been reluctant to enter the market, you have missed out on the greatest bear market recovery since the Great Depression. Lucky for you, there are a few lagging sectors expected to break out shortly.
Our research team believes we have found an opportunity in the natural gas sector.
The lesson here is not to attempt to have perfect timing, but to recognize a cyclical investment opportunity before the masses do.
This opportunity is presenting itself within natural gas. Natural gas prices have been beaten down by oversupply and costly drilling that made no sense when the price per 1,000 cubic feet dropped below $5. In case you've been living under a rock, natural gas prices were obliterated over the last 12 months, falling from a high of US$13 per 1,000 cubic feet in July 2008, to below US$2 per 1,000 cubic feet just a couple months ago.
Recently, Natural gas has been steadily moving back up, closing near $4 on Friday. This is a commodity which has not seen a dramatic correction in its price and a key reason why we are heavily focused on it right now.
Strength is slowly coming back into this market as bottom feeders enter the game. Have a look at the chart below. Many top industry experts believe natural gas is poised for a steady increase and potentially a short-term break out as we enter the winter months.
Whenever our team evaluates a commodity or equity, the question we have to ask is: Why now?
Why invest in natural gas now?
There are fundamental signs emerging in this sector that point to a strong recovery for natural gas prices.
- Supply is dwindling as current pipelines are being shut in.
- Natural Gas has fallen substantially since last September while demand has increased from September of last year.
- Many Natural Gas companies are not producing gas from current production facilities and are relying on reserves to carry us through the winter.
- Natural Gas prices are extremely low in comparisons to past years and investors, analysts and institutions are beginning to recognize this.
We have taken a few excerpts from a recent article written by Lauren Krugel of the Canadian Press (this article is Canada specific, but very relative to the natural gas market in North America and the world).
The Conference Board of Canada recently reported that Canada's natural gas producers will reap their lowest profits in a decade this year (in 2009). They cited the issue being that prices for the commodity have remained below the level needed to encourage companies to embark on new drilling.
The Ottawa-based economics think-tank said the gas industry's overall profits will total just $2.3 billion this year, down 60% from last year and the lowest since 1999.
It also states that output by Canadian gas producers will be down 5% in 2009 from last year's level, which was 5.2% below 2007 output.
Todd Crawford, an economist with The Conference Board Of Canada stated "Last year, revenues more than doubled over the first six months as gas prices skyrocketed. Now, low prices and the tough credit conditions have created a perfect storm that sent drilling activity in Canada tumbling this year."
In its report, the Conference Board said it expects gas-sector profits will begin to grow again in 2010.
We encourage you to read the entire article and discover just how harshly the natural gas market has been hit in the past 12 months and why that has drawn attention from many top investors.
READ ARTICLE
Over the last three months our team evaluated a handful of junior natural gas companies which have been dramatically increasing the proven value of their reserves during these tough times. We were only willing to select a company which had the potential for commercially viable wells, with low cost production that can be brought on immediately should the price of natural gas continue to improve. It took a while to find a company that met this criteria but our work is almost complete and we are preparing a detailed report on the company for your review.
We specifically evaluated companies operating within Alberta, as the Alberta Government has estimated that there is 44 trillion cubic feet ("TCF") of non-producing, shallow natural gas in the province. Later this week we will introduce you to a company operating in that specific region who has managed to increase their asset value immensely during the market bottom. The company's share price has remained unchanged in this environment but as of late has seen a renewed amount of interest, which is why we are getting ready to introduce them to you now.
What drives the price of Natural Gas?
It has been reported that this winter is expected to be warmer than normal. This is not the best news for natural gas, but none the less, the US Deptartment of Energy has predicted prices will rise by roughly 5%. If our winter in North America is colder than expected, the DOE has stated that consumers can expect double digit percentage increases in the price of natural gas.
An article from EnergyShop.com highlighted the Long Term Positives surrounding natural gas. They are listed below:
- Natural gas demand in North America is increasing at about 3 % per year whereas supply is increasing at about 1%
- Increasing economic activity, growth, new businesses and new homes increase gas use
- Production from many older gas wells is declining quite rapidly.
- More natural gas is being used for electricity generation. Any new electricity capacity brought on line right now is generated by natural gas, rather than oil, coal, water or nuclear.
- As the price of crude oil increases, some industries switch to natural gas. Many developed this dual fuel capability when gas prices skyrocketed in 2001.
- Prices are not expected to come down until new major gas pipelines are built connecting new gas fields in Alaska and the Northwest Territories. That is at least 6 years away. Recent reports however suggest that virtually all of this northern gas will be used in to extract oil from the tar sands in Northern Alberta.
- Liquified Natural Gas (LNG) will become a factor in North America, but many terminals and custom tankers will have to be built.
Please feel free to learn more about natural gas by reading the article below:
READ ARTICLE
Natural gas is used to heat our homes, create the power to keep our lights on, cook our food and fuel the 7 million natural gas vehicles currently in use around the world.
Natural gas is a seasonal commodity which typically increases in value during the winter months.
Our team will be introducing you to a company which has clearly defined its goals of near-term production as it advances its projects and increases the value of its reserves in Alberta. We will be introducing this investment opportunity to all of our members this Friday. Please feel free to contact us via email with any questions you may have.
All the best with your investments,
PINNACLEDIGEST.COM