March 21 2008 William writes:
Encana is a natural gas and oil producer with the majority of its assets located in North America. The company has increased its gas production and reserve holdings annually for the past 3 years. On Dec 31, 2007 had access to 12.4 trillion cubic feet of natural gas (5% of North American reserves).
Natural Gas Industry
At the current rate of production and consumption, the North America will exhaust the discovered domestic natural gas reserves in less than 12 years. Natural gas is more difficult to transport overseas than oil because it must be condensed and shipped in pressurized vessels. This insulation from foreign markets adds a premium to domestic supplies and makes it unlikely that gas supply will match demand for the next 5 years.
Electricity Generation
Natural gas electricity generation consumes 31% of U.S. natural gas and produces 25% of its electricity. New natural gas power plants will contribute 78% of the total electricity generation capacity additions in 2008. They are cleaner, more energy efficient and release less CO2 than comparable coal plants. Any strengthening of environmental regulations will make natural gas more cost attractive to electric utilities.
Investment Opportunity
Encana’s domestic, land based resources give it a distinct advantage over international and offshore competitors that are often affected by political instability and adverse weather conditions. Encana is in an excellent position to increase profits as the price of natural gas is predicted to increase 10% during the next two years (EIA Short Term Energy Outlook).
Categories: Energy
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me on 16 May 2008 at 9:10 pm #
sold - may 14