Natural Gas Producers Surge as Futures Reach a 16-Month High

NEW YORK, NY -- (Marketwire) -- 03/19/13 -- Things are slowly starting to turn around for the Natural Gas as warmer weather and falling supplies have sent futures to a 16-month high. Natural gas for April delivery on the New York Mercantile Exchange touched $3.965 a million British thermal Monday, the highest since October 2011. Five Star Equities examines the outlook for companies in the Natural Gas Industry and provides equity research on Chesapeake Energy Corporation (NYSE: CHK) and Southwestern Energy Company (NYSE: SWN).
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Forecasts for colder temperatures in major consuming regions across the U.S. have been a major cause for the recent surge in prices. Historically, around this time of year temperatures are on the rise and the demand for heating begins to fall. MDA Weather Services has forecasted mostly lower-than-normal temperatures for most of the U.S. throughout the rest of March. Since hitting a four-month low of 3.125 per million British thermal units in mid-February prices for the commodity have surged approximately 20 percent.
Prices for the commodity have also received a boost from a steep decline in inventories. Last week, the Energy Information Administration reported stockpiles declined 146 billion cubic feet, compared with a decline of 66 billion cubic feet in the same week a year ago.
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Chesapeake Energy is the second-largest producer of natural gas, a top 11 producer of oil and natural gas liquids and the most active driller of new wells in the U.S. The company recently announced plans to offer $2.3 billion of senior notes. Chesapeake plans to use the proceeds to help retire old outstanding debt. Shares of the company have rallied over 33 percent year-to-date.
Southwestern Energy's current operations are principally focused on development of unconventional oil and natural gas in the Fayetteville Shale in Arkansas, the Marcellus Shale in Pennsylvania, the Brown Dense in Arkansas and Louisiana and other new venture plays in North America. As of December 31, 2012, the company's estimated proved gas and oil reserves totaled approximately 4,018 Bcfe.
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