It might have been a dream. After reading scores of earnings releases from energy companies during the past few weeks, including ConocoPhillips
And then along comes El Paso Corp.
Let's look at the two divisions. The pipeline group is apparently off to a solid start in 2009. Its earnings before interest and taxes (EBIT) were up $15 million, or 4% from the prior year. And perhaps even more importantly for a pipeline, throughput rose by 2%. The improvement was based on growth in the company's Rockies pipelines, which compensated for declines elsewhere.
On the exploration and production side, the company operates in a variety of places, including -- believe it or not -- the Haynesville Shale of northern Louisiana and northeast Texas. There it cavorts with the likes of Chesapeake
During the company's call, CEO Doug Foshee was relatively noncommittal on the direction of natural gas prices. For the longer term, he noted that "beyond 2011, the evidence suggests the case for natural gas is still really strong, especially in a carbon-constrained world ..." But in the shorter term, he's predicting "low gas prices for a sustained period of time ..."
So there you have it, the nation's biggest natural gas transporter and a significant E&P operator appears rather cautious. My inclination is to watch this quality company carefully, but seeing as how even the company's CEO predicts sustained low gas prices, I wouldn't buy its shares yet without an extended investment time frame at my disposal.
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