Energy Biz Replay: Coal Stocks RISE On Supply News, Spectra GOES To British Columbia

Wall St. Cheat Sheet

Good news for coal stocks raised shares on Monday for Alpha Natural Resources, Inc. (ANR) Arch Coal Inc. (ACI), and James River Coal Company (JRCC). Supplies of coal shrunk (on paper), as BHP announced that it will cease coal output at its Gregory mine in Australia, while Xstrata reconfigures its coal operations. An analyst at Nomura comments that, “The market’s responding to the idea that the supply side is going to start to be rationalized, which is going to stabilize pricing for coking coal.”

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Transocean Ltd. (RIG) will sell 38 shallow-water drilling rigs to private equity backed Shelf Drilling International, for the amount of $1.05 billion, which is broken down into $855 million in cash and $195 million of seller financing in the form of preference shares. After completion, Transocean will take a third quarter impairment charge.

Spectra Energy Corp (SE) is partnering with BG Group on plans to construct a new 525-mile natural gas pipeline system in British Columbia, which should move as much as 4.2 billion cubic feet per day of gas from that province’s shale fields to a proposed liquid natural gas-export facility. Spectra has thus far not settled on a firm capital budget for the project, but it might cost as much as $8.2 billion.

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