The Bottom Line: Investing In Natural Gas Might be a Good Long Term Investment

Natural Gas Industry-related data:
§  $6 & $7.50/MMBtu:  consensus estimate long-term natural-gas price range
§  $5.33/MMBtu:  12/15/2009 price
§  $14/MMBtu:  record high reached in Summer 2008
§  5.27%:  Natural Gas YTD return (FCG ETF proxy)
§  $2.50:  September 2009:  7 year low
§  3.773 trillion cubic feet:  U.S. storage facilities supply (near record)
§  XTO's decision to sell to Exxon: implies that independent producers don't foresee a strong rebound in gas prices
§  34%:  Oil’s share of global energy mix in 2007
§  0.9%/year: oil annual long-term growth
§  21%:  Natural gas’ share of global energy mix in 2007
§  1.5%/year:  natural gas’ annual long-term growth
§  45 Trillion cubic feet:  about two years of domestic gas demand
§  $81 Billion:  1999 Exxon and Mobil merger
§  50%:  natural gas emits half as much CO2 as coal
§  $1 Trillion: industry investment to develop domestic shale fields
§  Potential takeover targets:  Chesapeake Energy, Devon Energy, EnCana, EOG Resources, Range Resources
§  2.33 Billion cubic feet a day:  XTO daily natural gas production output putting it just behind Chesapeake as the top domestic producer.
§  In 2000, price increased from $2.50 to $10 by the end of the year; eight months later, the price slipped to $3.
§  In 2005, prices increased to more than $15 after hurricanes Katrina and Rita and then decreased to below $7 just two months later.
§  In 2008, prices increased to more than $13 but then decreased to $3 this past September and closed Tuesday at $5.523.
§  46%:  % of all power plant capacity additions from 2008 to 2035, according to the The U.S. Energy Information Administration
§  Unconventional Resources:  a broad category of fuels (e.g., shale gas, tar sands, etc…) that require complex extraction technology.

The Bottom Line:  Investing In Natural Gas (FCG) Might be a Good Long Term Investment

Source(s):  WSJ, NYT, International Energy Agency, Google finance