Amaranth Case

Natural Gas is one of the main sources of energy for many of our daily needs and activities because of the clean, safe, and useful characteristic. Natural gas is colorless,

#2- What is your assessment of the Texas Gulf Sulphur press release of April 12?

Over the past two years, oil prices have increased very rapidly. “With OPEC production cuts and a growth in crude oil demand,” oil prices went from a 25-year low of $11 per barrel in February 1999 to a peak of close to $36 per barrel in December 2003 (Jablon 1). “Some analyst, however, said the cut could soon push crude prices above the psychologically important threshold of $40 per barrel and worsen the pain for U.S. motorists” (“Rising Prices Fuel Gas Clash” 1). During this winter, the price of natural gas has gone through the roof. This brings many questions to mind. Are the companies just raising prices? Is there actually a shortage that is causing the raise in price?

Economic benefits of the natural gas industry are intimately tied to the market price of natural gas – which historically, has demonstrated high volatility. Recently the price for oil and gas has plummeted. While natural gas supplies steadily accumulated in the US, Canada’s main export market, decreasing revenue and profits. This has resulted in consolidation of oil and gas companies, loss in jobs, and delay/cancelling of new projects (e.g., LNG projects on BC’s coast). Given this financial context, the Canadian gas industry needs to streamline their operations (i.e., increase efficiency and productivity) and explore alternative markets by, perhaps, moving methane up the value chain and creating value-added products (i.e., petrochemicals).

Volatile cost of oil and gas is a critical risk for companies such as Chesapeake. Costs are critical factor in whether oil and gas companies decide to start a new project. While companies try and predict the costs during the term of the project, they can never be too certain. While they cannot be exact on their estimate due to numerous factors; companies must be certain to a degree or they will continuously face unprofitable reserves. One factor that can influence costs that can be unpredictable and unfavorable is adverse weather conditions. Storms and natural disasters

Both Chesapeake’s and Cabot’s revenues, operating results, financial condition and ability to obtain outside capital depends substantially on prevailing prices for natural gas and oil. Lower commodity prices may reduce the amount of natural gas and

Beginning in 2000, CMS Marketing, Services and Trading Company began to make energy trades that had no economic justification. As stated in the Securities and Exchange Commission cease and desist order ¡§CMS materially overstated its revenues, expenses and energy-trading volumes in 2000 and 2001 through the use of undisclosed round-trip energy transactions conducted by its Houston-based energy-trading division, MS&T.¡¨ These trades have now become known as "round-trip" trades. CMS issued false Press Releases describing the trades as low margin trades when in fact there were no margins. The Company admits that $5.2 billion of these trades were made in 2000 and 2001.

The importance of natural gas is to replace the role of oil in the economy. Natural gas is good for the US because it can produce natural gas domestically. It has plenty of energy for use in people’s homes and in industry. It will help the US economy cope with the depletion of peak oil production. Crude oil is nearly three times as expensive as Natural gas. (Pipeline, 2009-2013)

For the month of February more than 8 percent to 2-24 per million was natural gas was at 1999 levels in Dec 17 weather look out, If the weather interfere with gas prices the stock market will be vulnerable every year.

Coriant, which is a company that provides innovative networking solutions to network operators, has a new CEO. The company has appointed Shaygan Kheradpri as the new CEO. He is also the chairman of the board. Shaygan brings extensive experience to the company. Before he joined Coriant, he was the Operating Partner at Marlin Equity Partners. He has also had over 28 years of experience in technology, telecom and financial services.

In one week Bear Stearns had burned through about $18 billion in cash reserve and was proceeding to discharge money. Plainly the market was wagering that Bear Stearns would in the blink of an eye come up

Exxon and Chevron are no doubt some of the leading incorporated oil companies on the globe. Exxon Corp. is the second largest oil firm after Royal Dutch Shell, it is respected for getting the biggest revenue return in 2008 which no company in the U.S. have ever reported before. According to Wilson (2009) Chevron has managed to show a lot of profitability in the market despite the decease in its oil production. It graded as one of firms which made a billion dollars profit within a week in the period of July to September 2008. Regardless of profitability trends set by the two oil firms in the U.S. market, they have been facing financial decline like the rest of the companies in other industries. The two firms are like two sailing ships which are taking longer time to sink. In the last few years, the production capacity of Chevron and Exxon has decreased and their listings on the stock market have become weak. The continuation of construction and drilling which requires billions of dollars in expense of oil production might make them experience a bigger financial crisis (Wilson, 2009).

Established in January 1999, Pine Street Capital (PSC) was a market-neutral hedge fund that specialized in the technology field, facing market risk and trying to decide whether and which way to use in order to hedge equity market risk. They choose technology sector because the partners of PSC felt that they have enough ability to evaluate this sector and specially be good at picking out-performing stock. Short-selling of NASDAQ and options hedging strategy are the two major hedging choices for PSC. Either strategy has its own advantages in different economic periods and conditions. The fund has just through one of the most volatile periods in NASDAQ 's history, and it was trying to decide whether it should continue its risk management

Apache Corporation, an independent oil and gas exploration and production company founded in 1954 by Raymond Plank whose primary focus was to profit in oil. Their initial investor 's capital of $250,000 in 1954 rose to over a billion dollars in acquisitions by 2001. Acquisitions over a billion included Repsol in Egypt’s Western desert and a

Enron, once known as the worldwide leader in energy trading, began as a natural gas pipeline company. “At its peak, Enron brokered up to 20 percent of America’s energy transactions. These included basic contracts to deliver natural gas from wells to pipelines for distribution to homes, contracts for the purchase of electrical power facility out port, and more complex financial contracts, which allowed power companies to manage price and market risk” (Ackman).