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$18.58 -1.26 (-6.35%)
10/6/2008 4:04 PM

CNX Gas Corp (CXG)

CAPS Rating:
***

Engaged in the exploration, development, production and gathering of natural gas in the Appalachian Basin.

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What the Community Thinks

Total Members

123 Outperforms
7 Underperforms
 

All-Stars

24 Outperforms
4 Underperforms
 

Wall Street

3 Outperforms
0 Underperforms
 

Members bullish on CXG are also bullish on:

Members bearish on CXG are also bearish on:

Ticker Tags

Coal-bed Methane (7), Exploration (54), Mid Cap (670), Oil & Gas Drilling & Exploration (125)
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CNX Gas Corp At A Glance

Current Price: $18.58
Last Trade Time: 10/6/2008 4:04 PM
Open: $19.14
Previous Close: $19.84
Daily Range: $16.96 - $19.14
52-Week Range: $19.77 - $45.51
Volume: 602,420
Market Cap: $3.80B
P/E Ratio: 21.52
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Stock Trends

CXG VS S&P 500 (SPY)

CXG 12 month chart vs. S&P

News & Discussion Boards

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Top Bull Pitch

Recs

1

CNX Gas Corp (CXG)

Avatar DarkToast (< 20) Submitted: 6/27/08 2:22 PM

This stock has been trading in a narrow range for the last couple of months. It increased its quarterly earnings estimates, and it recently settled some potentially costly patent litigation. With natural gas on such a strong run I think CNX stock could be poised for a breakout to the upside soon.

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Recs

0

 (CXG)

Avatar stockblog (51.90) Submitted: 9/29/08 6:14 AM : Outperform Start Price: $22.69 CXG Score: -5.98

CNX Gas: A Leader in Coalbed Methane Capture and the Marcellus Shale

CNX Gas (CXG) is an independent natural gas exploration and production company based in Pittsburgh with operations concentrated in the Appalachian basin, including many locations near my hometown in Western PA. The Company has increased its acreage position by 345% over the past three years to a total of 3.8 million acres through a mix of coalbed methane [CBM], unconventional shales, tight sands, and conventional deposits concentrated (63%) in the Appalachian basin. Proven reserves account for just 7% of the 3.8 million acres, with partially-assessed and un-assessed acres accounting for 46.5% each. The Company’s CBM assets alone are sufficient to achieve its 100 Bcf strategic goal by 2010 by simply tapping these reserves.

Upside to the 100 Bcf output goal by 2010 is possible through the Company’s shale assets, including 842,000 acres with an estimated production output estimate range of 1,316 – 5,165 Bcf based on current assessments. CNX Gas is a leader in the Eastern US shale – including 161,000 acres in PA, NY, WV, and OH in the Marcellus Shale with the distinct advantage of existing operations and infrastructure in this region. During 2007, CNX Gas enjoyed the second-lowest finding costs in the industry at just $1.25 per Mcf versus an estimated industry average of $3.00 per Mcf. The Company also enjoys the strongest balance sheet in the industry with negligible debt and the ability to fund the majority of its 2008 capital budget without drawing on its credit facility.

Another element to the CNX Gas story is the capture of coalbed methane gas, which is eligible for carbon credits on the Chicago Climate Exchange. The Company is the second-largest play on methane gas capture in the US behind Waste Management (WMI). As the only oil and gas company registered as an offset provider with the Chicago Climate Exchange, CNX Gas has already registered 8.4 million tons of carbon credits and expects future capacity to generate 2 – 3 million tons annually. As I have recently featured, these credits have commenced trading with a most recent print of $5.63 per ton – which values the Company’s existing portfolio of carbon credits at just under $50 million with another $10 - $15 million expected annually in new emission offsets.

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Recs

0

 (CXG)

Avatar Collin757 (76.74) Submitted: 9/18/08 1:21 AM : Outperform Start Price: $23.57 CXG Score: -9.63

agt

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Recs

0

 (CXG)

Avatar kurzzz (< 20) Submitted: 8/25/08 4:09 PM : Outperform Start Price: $30.69 CXG Score: -21.90

Fundamental analysis shows promising

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Recs

0

 (CXG)

Avatar CrazyCal17 (< 20) Submitted: 8/05/08 11:32 AM : Outperform Start Price: $28.70 CXG Score: -17.80

This stock is a great choice. By evaluating this company and looking at their growth pattern and their marketing strategies this is a sure fire stock to pick. This company has great leadership with the ability to think outside the box. With the possibility of some future acquisitions this has all the ingredients for wonderful success, short term and long term both. Keep up and watch out. With this outlook ahead, we should also look to the left and right (aka their competion) for huge leaps as well. If you have a little on the side I say diversify within the sector and buy from all the competetors too for they also are looking very solid. That is my pick and I am sticking to it.

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Recs

0

 (CXG)

Avatar LEGMAKER (< 20) Submitted: 6/28/08 2:24 PM : Outperform Start Price: $41.27 CXG Score: -36.84

The impressive move of oil today, based on OPEC’s statement that oil will trend higher than $150 a barrel. As oil has moved higher, natural gas has moved upward in at a slower pace. Oil’s assent has one big reason that natural gas cannot keep up and that is the peak oil theory. Although I do not believe this to be true, at least for now, OPEC looks as though they will have little to do with helping the US economy by pumping oil. I think the years of their saturating the world with oil every time we have difficulty with prices are over. The Saudi’s use to be afraid that we will switch to other means of energy, and that is why they have kept the price low, they may have come to the realization that even if they lower prices, many alternatives are cheaper.





Natural gas has progressed upward as the demand for it worldwide has increased substantially. It is the ideal situation as the US has quite a bit of it, and new techniques make it easy to extract from once difficult areas such as shales. This has made geniuses of those that acquired shale assets when it was not cost effective to drill them. Many of the oil drillers had sold their rights to companies like CHK or XTO and now they are high flying growth stocks. CXG seems well positioned here. They have a $6.14 billion dollar market cap. Their PE seems high at 40, but not when you compare it to their expected growth. This quarter’s EPS is expected to grow by 63% and next 119%. This year analysts have growth estimated at 85.6%. They currently are number one in the US energy industry with respect to methane capture. They are the number one gas producer with respect to revenue in Appalachia. They are the highest margin producer in the US. They have no debt.





The most important aspect of the gas industry is the movement of government and larger vehicles to using natural gas as a fuel. This will continue to increase the price going forward as it is much cheaper than oil on a price to BTU basis. One of the ways the United States has begun to decrease consumption is through adopting bussing systems that based on natural gas as a power source. I am sure there will be plenty dissenters to this, but all you have to do is look up CLNE and see it is being adopted in places such as California. The system is set up to also work with fleet vehicles as CLNE sets up filling stations for the area. It would be too difficult to set up with respect to private vehicles as the fill stations are not as assessable as gasoline. They are even accessing coal bed methane for this use in China with the help of T. Boone Picken’s company.





CXG looks promising from their cash flow build and 15% CAGR with respect to return on capital employed. They have 1.343 Tcf of proven reserves and.941 Tcf of unproven. They have a 1.3 to 5.2 Tcf of net un-risked resource potential. Total estimated reserves and resources could be as high as 7.4 Tcf. This leaves only 7% of resources proved and a possible massive resource potential. Even with the recent run-up of gas pricing they seem undervalued as their stock price did not track with their peers from January to the beginning of April.





Since 2003 their reserve growth has increased 7.5% per year. From 2006 to 2010 their production growth is estimated to increase by 15.5% per year. This production increase can be attributed to four of their last six wells which are currently their highest with respect to gas production. In 2007 their average price of gas was $7.10 and it looks to be much higher this year. They have 35.9 Bcf hedged at $8.84 in 2008. Their hedges in 2009 are 24.9 Bcf at $9.02 and 2010 5.6 Bcf and $9.14. With this they are keeping their margins low as they have a gas drill bit finding cost of $1.25 per Mcf and it is the second lowest in the industry.





All of these factors should have CXG trading at a higher valuation than its competitors. The chart is also bullish as they have a current trend that places their price target at $68.


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TrackUBS 82.78 10/03/07 Outperform NS $29.61-37.25%-31.92%-5.33
TrackMatrix 93.23 10/03/06 Outperform NS $23.20-19.91%-21.19%+1.28

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