Natural gas now getting its fair share of publicity

Journal Record, The (Oklahoma City),  Jul 14, 2008  by Jerry Shottenkirk

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Most eyes are on the price of crude oil simply because it is so important in the price of just about everything.

But natural gas also has been increasing at rates that have sent investors and exploration and production companies into commodity- seeking and stock-buying frenzies.

In one of his patented raves, Jim Cramer of CNBC's Mad Money called Chesapeake Energy and Devon Energy two of the best investments on the markets. In the next sentence, he also lauded Enid-based Continental Resources for its recent Bakken Shale oil find.

Natural gas has been getting positive publicity lately, and some of it has been produced by the energy companies.

Chesapeake Energy on Friday announced that it has started an online video channel called Shale.TV. Chief executive Aubrey McClendon also started the American Clean Skies Foundation last year.

Natural gas climbed to $13.694 per thousand cubic feet early Friday before settling down 39 cents at $11.90. Oil settled at $145.08, up $3.43.

There's good reason to put out the word on natural gas, and thus far it has been working, said Tom Price, senior vice president of corporate relations for Chesapeake.

"I think it's just so critical right now that people know the facts," Price said. "We've got a situation where it has been reported for some time there's no more gas out there. It's just completely wrong. Sometimes you got to take steps to make sure people have an accurate representation of what is happening in terms of increases in natural gas supply."

Price said the country is looking for energy solutions.

"We need answers now, not in 10 years or 20 years from now," he said. "People are looking at what can be done in the shortest amount of time to try and reduce the price of gasoline at the pump and what we can do to prevent the exportation of $750 billion a year to foreign governments that are not reliable friends and allies."

Investment giant T. Boone Pickens sparked interest last week with a plan for wind energy and natural gas-powered vehicles. That, too, helped the price of natural gas and some energy stocks.

"Whenever somebody with the credibility of Boone Pickens makes a comment about the importance of natural gas and its future, it's helpful," Price said.

The U.S. currently produces 60 billion cubic feet of natural gas per day, and recent discoveries will put that number 5 percent to 8 percent higher each year, Price said.

"You're talking about a four-billion-cubic-feet-per-day increase, and some of these shale projects have not even really ramped up," he said.

He said Chesapeake has 10 producing wells in the Haynesville Shale of Louisiana and by the end of this year that number will double. By the end of next year Chesapeake expects to have 40 rigs and 60 by the end of 2010.

Jake Dollarhide of Longbow Asset Management in Tulsa said natural gas has made big strides.

"It's had a meteoric rise this year," Dollarhide said. "It has had much less fanfare than the price of oil, but to date this year, the price of natural gas, on a percentage basis, has increased more than the price of oil. It's why you see names like Chesapeake and Devon rise so precipitously and so many investors want to invest in those stocks."

Devon Energy is not part of the pro-natural gas movement but certainly doesn't have any objections to those who are, said company spokesman Chip Minty.

"At Devon we don't promote one form of energy over the other," he said. "We are 60 percent natural gas and 40 percent oil. As a company, from time to time we talk about natural gas being the cleanest burning but we are also an oil company."

Devon is the top natural gas producer in the Barnett Shale but also is part of the more prolific oil finds in the deepwater Gulf of Mexico. "We do the best we can with oil and gas and have so since 1981, and we welcome the development of other viable sources of energy."

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