Posted by Dave Goodboy on Dec 28, 2010
NGAS Resources (OTC: NGAS) just announced a definitive agreement to be bought out by Magnum Hunter Resources (Amex: MHR) in an all stock deal. Each share of NGAS will be transferred to Magnum Hunter, creating the right to receive 0.0846 of a share of Magnum Hunter common stock. This represents a value of 55 cents per share for NGAS shareholders. NGAS is said it expects the enterprise value of the transaction at approximately $98 million.
The deal should come as no surprise since NGAS indicated in November it was seeking to make a strategic move. It’s all part of an expansion plan by Magnum Hunter to acquire additional Appalachian shale natural gas assets. The NGAS deal will provide Magnum Hunter with an additional 78.4 billion cubic feet of shale.
Are these deals indicating an imminent upswing in the price of natural gas? Well, it earned a place as one of the worst investments of 2010 despite the hype. Natural gas prices are down 8% for the year and the United States Natural Gas ETF (UNG: NYSE) has fallen a whopping 43%. This abysmal performance smacks the face of an early 2010 prediction of $7.60 per Btu by Merrill Lynch. Is this bottom fishing by Magnum Hunter in expectation of a bull market? I wouldn’t recommend betting on it. However, we will know in the fullness of time.
Tagged as: hot stock ideas, hot stocks, MHR, NGAS, trading ideas
About BeaconEquity.com
BeaconEquity.com is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.
Beacon Equity Group Disclaimer
This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured site: So, Why is Wikileaks a Good Thing Again?.
Source: "Natural Gas Prices" via Glen in Google Reader
No comments:
Post a Comment