The Zacks Analyst Blog Highlights: Anadarko Petroleum, Chesapeake Energy, Encana, Ultra Petroleum and Talisman Energy

  The Zacks Analyst Blog Highlights: Anadarko Petroleum, Chesapeake Energy,
                 Encana, Ultra Petroleum and Talisman Energy

PR Newswire

CHICAGO, Nov. 20, 2012

CHICAGO, Nov. 20, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Anadarko Petroleum Corp.
(NYSE:APC), Chesapeake Energy (NYSE:CHK), Encana Corp. (NYSE:ECA), Ultra
Petroleum Corp. (NYSE:UPL) and Talisman Energy Inc. (NYSE:TLM).

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Here are highlights from Monday's Analyst Blog:

Season's First Nat Gas Drawdown

The U.S. Energy Department's weekly inventory release showed a
larger-than-expected decrease in natural gas supplies on account of the advent
of cold weather that prompted the commodity's brisk use for space heating by
residential/commercial consumers. The storage withdrawal – the first for the
winter heating season – has also cut the surplus relative to the last year and
the five-year average.

About the Weekly Natural Gas Storage Report

The Weekly Natural Gas Storage Report – brought out by the Energy Information
Administration (EIA) every Thursday since 2002 – includes updates on natural
gas market prices, the latest storage level estimates, recent weather data and
other market activities or events.

The report provides an overview of the level of reserves and their movements,
thereby helping investors understand the demand/supply dynamics of natural
gas.

It is an indicator of current gas prices and volatility that affect businesses
of natural gas-weighted companies and related support plays like Anadarko
Petroleum Corp. (NYSE:APC), Chesapeake Energy (NYSE:CHK) and Encana Corp.
(NYSE:ECA).

Analysis of the Data

Stockpiles held in underground storage in the lower 48 states fell by 18
billion cubic feet (Bcf) for the week ended November 9, 2012, higher than the
guided range (of 10–14 Bcf gain) as per the analysts surveyed by Platts.

The decrease represents the first withdrawal of the 2012-2013 winter heating
season after stocks hit an all-time high in the previous week. More
importantly, during this time last year and over the five-year (2007–2011)
period, natural gas was still being added into supplies at the respective
rates of 20 Bcf and 17 Bcf. Therefore, the weekly storage draw has trimmed the
surplus relative to the benchmarks.

But in spite of the 'better-than-expected' draw during the past week, the
current storage level – at 3.911 trillion cubic feet (Tcf) – is up 71 Bcf
(1.8%) from the last year and 209 Bcf (5.6%) over the five-year average.

In fact, natural gas inventories in underground storage have persistently
exceeded the five-year average since late September last year and ended the
usual summer stock-building season of April through October at a record 3.923
Tcf (as of October 31, 2012).

A supply glut kept the natural gas prices under pressure during the past year
or so, as production from dense rock formations (shale) – through novel
techniques of horizontal drilling and hydraulic fracturing – remains robust,
thereby overwhelming demand.

However, with the upcoming U.S. winter set to be colder than the unusually
warm last one and domestic output likely to drop in 2013 versus 2012 on the
back of natural gas players announcing drilling/volume curtailments, we might
expect some balancing of the commodity's supply/demand disparity.

This, in turn, could improve the prices and buoy natural gas producers like
Ultra Petroleum Corp. (NYSE:UPL), Talisman Energy Inc. (NYSE:TLM) Encana and
Chesapeake.

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