Saturday, July 24, 2010

Rush On for 'Rare Earths' as U.S. Firms Seek to Counter Chinese Monopoly

The REE market should start to gain traction this Fall as the Molycorp IPO news and the recent news of China restrictions on REE exports begins to translate into higher share prices for the Canadian juniors in the REE space. I own a basket of 4 companies including RA, QRE, CIN and MAT. All are near their 52 week lows and ready for 200-300% gains by the end of the year similar to last years move higher.

By PHIL TAYLOR of Greenwire

Published: July 23, 2010

MOUNTAIN PASS, Calif. -- About an hour's drive southwest of Las Vegas, on a private 2,200-acre desert patch flanked by Clark Mountain and the Mojave National Preserve, lies an idled mine many consider to be a linchpin in the U.S. push for energy independence and national security.

The Mountain Pass mine, once the world's leading producer of "rare earth" minerals used to manufacture cutting-edge weapons and clean energy technologies, shuttered operations here in 2002 after Chinese producers undercut its prices and a series of environmental spills stalled the renewal of state mining permits.

Today, the mine musters a limited production of rare earth oxides from ore mined years ago from a massive open pit hewn from the arid terrain.

But even that material must be shipped to Asian manufacturing plants equipped with the technology and know-how to process the oxides into metals and alloys to create new high-performance products, many of which are shipped back to the United States in the form of permanent magnets used in products such as wind turbines, hybrid electric vehicle motors, military radar equipment or precision-guided munitions.

Read more here.

Wednesday, July 21, 2010

IEA reports China beats US as No.1 oil & energy user

Even with this headline, US financial news networks and traders continue to focus on US inventories as the sole determinant of pricing trends. When will they "get it" and report China useage data?

Page added on July 20, 2010
IEA reports China beats US as No.1 oil & energy user
The IEA reported yesterday that China has now overtaken the US in terms of energy use and is now officially the world’s biggest combined oil and energy user.

The IEA’s chief economist, said “In the year 2000, the US consumed twice as much energy as China, now China consumes more than the US.”

Saudi Arabia, OPEC’s largest oil exporter, for the first time last year sold more oil to China than the US, which for decades had been its most important customer.

The IEA noted yesterday that China had consumed energy equivalent to 2.252 billion tons of oil last year from resources including coals, oil, nuclear, natural gas and water, around five percent more than that of the US, which had been positioned as the largest energy consumer for most of the 20th century.

However the US is still the biggest oil consumer, going through an average of roughly 19 million barrels a day, compared to China’s 9.2 million.

IEA Report is Rejected by China

However, an official with the National Energy Administration (NEA) Zhou Xian today rejected the report by the IEA, stressing that IEA’s data on China’s energy use is unreliable as the nation consumed 2.252 billion tonnes of oil equivalent in 2009, which is only 0.4 percent more than US’s 2.17 billion tonnes.

An NEA official who declined to be named claimed that the IEA and China’s statistic authority collected data from different sources, which had led to the different results.

Saturday, July 17, 2010

Utica shale decline rate steeper than most

At least one institution provided a rather downbeat view of the Utica Shale this week. It will be up to Talisman and a few other majors to perfect their completion techniques so that the Four Horseman of the Utica Shale (QEC, JNX, GMR and ATI) can recover from their steep decline in share prices experienced this year.

Utica shale decline rate steeper than most

Published: Jul 14, 2010
Not promising. That is how the Quebec Utica shale decline rate was described in a July 12 report from Jefferies & Co. The St. Edouard #1A horizontal well operated by Talisman Energy Inc. (NYSE: TLM) is currently flowing about 1.4 MMcf/d after testing 134 days according to Calgary-based Questerre Energy Corp.

“The well averaged 5.3 MMcf/d in its first 30 days, but the decline is steeper than any major shale plays in development. For instance, a Marcellus well with 5.3 MMcf/d first month average rate would be flowing about 2.5 MMcf/d in its fifth month, while comparable Haynesville and Eagle Ford wells would be producing around 2.2-2.3 MMcf/d,” noted the report.

Talisman and Questerre are currently completing operations on the Gentilly No. 2 horizontal well in the St. Lawrence Lowlands, Qu├ębec.

Questerre also noted that drilling operations are underway on the next horizontal well, St. Gertrude No. 1, situated roughly 12 km southwest of the Gentilly No. 2 horizontal well. Total measured depth for this well is programmed at 3300m with a 1000m horizontal leg into the middle Utica interval. Subject to final results, Questerre expects the completion will likely include an 8-stage fracture stimulation with results later this year.

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