Natural Gas

[aqeginili]

This sector has had a heck of a run within the last 30 days. I keep raising my limit buy on EOG and am chasing the stock at this point. I've learned not to fight the trend and it appears Wall St. is willing to take nat gas higher as it has also had a great run recently. Could this be the story of 2008, much like oil was in 2005-2007? Should we expect a drastic drop off when Spring is nigh?

I've since raised my limit buy on EOG to $96. I'm interested to hear if you all think nat gas is overheated and due for a pullback and if my entry price is a safe bet based on TA and the price action in the commodity.

Thanks in advance.

PS: if there is a better play on nat gas other than EOG I am interested in hearing your opinion.

You owe it to yourself to set aside 19 minutes to watch the following (pass it on):
http://youtu.be/jboTeS9Okak
-----------------------------------
Perspective:
http://frontpagemag.com/2012/dgreen...tm_campaign=446602d97a-Mailchimp_FrontPageMag
http://www.rushlimbaugh.com/daily/2012/11/07/in_a_nation_of_children_santa_claus_wins
Technical Alchemist, Feb 26, 2008 #1

[Aterasfiz]

MadCow,
Have you looked at CHK? I've been following this about 9 months (I believe it was featured in Smart Money Magazine in September 2007, which is where I got turned on to it) Its had an incredible run over the past 2 weeks right up through earnings. If you read into earnings they actually beat estimates, once you take out one time charges. Company has been buying/leasing land and increasing production. CEO has been buying a good bit of shares and management seems to be solid. If you have the time to do some DD you should be able to find whatever you need. I hope this info helps. Just an FYI...I have owned this stock in the past but exited my most recent position Friday and am also looking to get back in.

The Poni

[arogonoluhi]

theponi said: ↑
MadCow,
Have you looked at CHK? I've been following this about 9 months (I believe it was featured in Smart Money Magazine in September 2007, which is where I got turned on to it) Its had an incredible run over the past 2 weeks right up through earnings. If you read into earnings they actually beat estimates, once you take out one time charges. Company has been buying/leasing land and increasing production. CEO has been buying a good bit of shares and management seems to be solid. If you have the time to do some DD you should be able to find whatever you need. I hope this info helps. Just an FYI...I have owned this stock in the past but exited my most recent position Friday and am also looking to get back in.

The Poni
Click to expand...
Yes, I am quite familiar with CHK. It was one of the first stocks I ever owned, back in mid to late 2005 during all the Hurricane Katrina mania I made quite a bit of money off of it. However, my understanding is that EOG is the most exposed to the spot price of nat gas (can anyone corroborate this?) because they are not as bound to contracts like CHK is and with the recent run of nat gas from just over $6 to nearly $10 in the last 6 months my thought process is that EOG would be the most likely to have an upside surprise. Thoughts?

[AundreaMud]

What a difference a couple years makes. Nat gas went from a darling to one of Cinderellas ugly sisters.

I was thinking of ways to play this and I recall reading a statistic that said the USA is a net exporter of refined fuels including nat gas. Basically we import oil, refine it into gasoline, heating oil, and other distillates and ship it down to South America and other emerging markets. As poorly outdated as our refining infrastructure is in this country it's still worlds ahead of what they have in emerging markets.

With that being said the low gas prices make the producers like CHK a poor choice to play the shale gas revolution unless you buy one of the royalty trusts. On the other hand, you can play the exportation of natural gas. A couple names I like in this field are Chicago Bridge & Iron [CBI] and Cheniere Energy [LNG].

CBI manufactures LNG storage tanks and LNG liquefaction and regasification terminals. They provide other services to the energy sector but this is probably their most levered component to nat gas.

cbi.jpg

LNG primarily engages in the collection and distribution of liquified natural gas (aka LNG). They own and operate the LNG receiving terminals and help get the LNG on the tankers for cross-sea export. This is a pure play on overseas demand for LNG.

lng.jpg

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On a side note I've mentioned in other threads I'm playing the excessive shale gas production via select royalty trusts and the midstream players. The trusts like ECT pay hefty distributions as do the midstream players like EPD and EEP. The nice thing about the midstream pipeline players is they are a play on volume of gas not the price of the commodity. The more is produced and needs to be shipped the more they can charge and obvious that should flow to the bottom line and result in higher distributions to unit holders.

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Last edited by a moderator: Mar 22, 2014
You owe it to yourself to set aside 19 minutes to watch the following (pass it on):
http://youtu.be/jboTeS9Okak
-----------------------------------
Perspective:
http://frontpagemag.com/2012/dgreen...tm_campaign=446602d97a-Mailchimp_FrontPageMag
http://www.rushlimbaugh.com/daily/2012/11/07/in_a_nation_of_children_santa_claus_wins

[Avoistast]

What about something like UNG? funny that you went back and found this thread. brutal, but these are attractive if it turns around

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Last edited by a moderator: Mar 22, 2014