A clarion is a medieval trumpet that had clear, shrill tones. Trumpets were often uses to get people’s attention when making announcements. We are using “clarion” in the context of making announcements, as well as being thought-provoking when sharing our information and opinions with those who are interested in new investment ideas.
Topic: Natural Gas
For quite a while, natural gas performed so badly, with the price beaten down because of the tremendous new supplies found in the United States, and which are accessible because of evolving fracking techniques. As a substitute, especially for coal, natural gas all of a sudden came into sharp focus. After hitting a low of US$1.84 mmbtu last April, the price has almost doubled and currently (November 16) sits at $US3.48 mmbtu.
The first chart shows the trend in the ratio of crude oil to natural gas. On October 1, 2011, the ratio was 21.58x. The current ratio (November 16 2012) is 24.91x. It had reached a high of 56.01x when the price bottomed out in April.
October 1, 2011 - November 19, 2012
The second chart, on the next page, compares the relative performance of oil versus gas to their respective prices on October 1, 2011. Oil has out-performed over the period but, since April, gas has almost closed the gap.
October 1, 2011 - November 19, 2012
The average price of natural gas since October 1, 2011 is US$3.37 per mmbtu. (The current price is US$3.48 per mmbtu, up from an April low of US$1.84 per mmbtu.)
The following table shows the trend in natural gas on a quarter-by-quarter basis.
Average Price per MMBTU (US $)
|
Q1 |
Q2 |
Q3 |
Q4 |
|
|
2010 |
$5.07 |
$4.30 |
$4.32 |
$3.75 |
|
2011 |
$4.15 |
$4.31 |
$4.12 |
$3.31 |
|
2012 |
$2.39 |
$2.31 |
$2.88 |
So far in Q4, the average price has been US$3.38 mmbtu. If the price of natural gas can be sustained at recent levels, then the average price in Q4/2012 should compare favourably with last year’s final quarter.
If so, this could give continuing momentum to those beaten-down natural gas stocks that are starting to show some life.
Bob Weir, CFA, and Director of Research
BriefCase
NewsBytes from November 7 – November 20, 2012
Additional information on the companies featured in NewsBytes may be found at www.sedar.com, and at www.eresearch.ca.
For the latest eResearch publications, see sidebar opposite.
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Adira Energy Ltd. ($0.115 - November 7, 2012; ADL-TSX-V) …. (1) Adira has filed a draft prospectus with the Israeli Securities Authorities in connection with the Company’s previously announced application to list its securities on the Tel Aviv Stock Exchange. (2) Adira has also filed a preliminary short-form prospectus with the securities regulatory authorities in Ontario, British Columbia and Alberta in connection with a fully marketed best-efforts offering of units through a syndicate of agents. The offering may also be made in other jurisdictions outside Canada, including the USA and Israel.
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Rainbow Resources Inc. ($0.19 - November 8, 2012; RBW-TSX-V) …. (1) Rainbow Resources has completed 12 diamond drill holes over two separate sections (about 3,300 feet apart) at the Company’s Gold Viking property in the Slocan Mining District of southeast British Columbia. The Company is awaiting results from the holes in order to plan a step-out drilling strategy. (2) The Company has also completed the first two holes of a Phase 1 reverse circulation drill program at the Jewel Ridge property near Eureka, Nevada. (3) Rainbow is awaiting assay results from the recently-completed 15-hole drill program at the International silver property in the West Kootenay area of B.C.
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Canadian Orebodies Inc. ($0.20 - November 12, 2012; CO-TSX-V) …. (1) Canadian Orebodies has completed its summer drilling program at the Haig Inlet iron project on the Belcher Islands in Nunavut. A total of 6,469.6 metres were drilled in 38 holes over four separate target areas (Haig West, Haig South, Haig North Extension, and Kihl Bay. An updated NI 43-101 compliant resource estimate is expected by Q1/2013. (2) The Company has extended the expiry date of 6,325,666 common share purchase warrants issued as part of a private placement completed November 19, 2010. The expiry date has been extended by one year to November 19, 2013, with the exercise price remaining unchanged at $0.18.
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Cadillac Ventures Inc. ($0.08 - November 20, 2012; CDC-TSX-V) …. Cadillac Ventures has entered into an agreement for a private placement financing of units at $0.09 per unit and flow-through units at $0.10 per flow-through unit, for aggregate gross proceeds of up to $3.0 million. The proceeds are to be used for exploration and development of the Company’s Canadian properties.
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Monthly Top Ten
The top-ten www.eresearch.ca downloaded reports since October 22, 2012:
- Century Iron Mines Corporation, Perspective, October 23
- High Arctic Energy Services Inc., StockPotentials Perspective, Oct. 19
- Cadillac Ventures Inc., Perspective, October 24
- Bioniche Life Sciences Inc., Perspective, November 8
- Red Tiger Mining Inc., Perspective, November 5
- Canadian Orebodies Inc., Perspective, November 8
- Tim Hortons Inc., Phases & Cycles, October 23
- Bioniche Life Sciences Inc., Perspective, October 19
- Bioniche Life Sciences Inc., Perspective, October 4
- Boralex Inc., Phases & Cycles, October 19
Bi-Weekly Top Five
The top-five www.eresearch.ca downloaded reports since November 5, 2012:
1. Bioniche Life Sciences Inc., Perspective, November 8
2. Red Tiger Mining Inc., Perspective, November 5
3. Canadian Orebodies Inc., Perspective, November 8
4. Cadillac Ventures Inc., Perspective, October 24
5. Canadian Orebodies Inc., Perspective, October 10
Monthly Top-Five Requested Articles
The top-five www.eresearch.ca downloaded articles since October 22, 2012:
1. Gold, Phases & Cycles, October 23
2. Technical Trends, UpTrend.com, October 29
3. Precious Metals, Trader Planet, October 31
4. Cyclicals, Trader Planet, October 31
5. Energy Revolution, Hoesgen Investment Partners, November 5
eResearch was established in 2000 as Canada's first equity issuer-sponsored research organization. The firm is a primary source for professional investment research, focused primarily on small- and mid-cap companies. Its research and analysis is of institutional quality, and has the potential to reach millions of global investors through its extensive electronic distribution network. Its marketing and promotion activities includes research reports, videos, press releases, hosted luncheons, and corporate communications.
Editor’s Note: Clarion Letter readers who are equity investors/traders only can gain access to the energy space through the following exchange traded funds (ETFs).
WTI Crude OIL
United States Oil (USO, quote)
Power Shares DB Oil Fund (DBO, quote)
Brent Crude Oil
United States Brent Oil Fund (BNO, quote)
Natural Gas
United States Natural Gas Fund (UNG, quote)
United States 12 Month Natural Gas Fund (UNL, quote)
First Trust ISE-Revere Natural Gas Index Fund (FCG, quote)
Coal
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