Alpha Natural Starts Drilling for Nat Gas

Somehow I've missed that Alpha Natural Resources (ANR) got 20,000 acres in the Marcellus Shale when they bought Foundation Coal. According to this report, ANR expects to drill 4 wells this year with plans for up to 100 wells in the future. Very interesting! We're very bullish on the future of natural gas, but we've had a difficult time finding any stocks trading at decent values. ANR has been a favorite for its metallurigal coal. With only 4 wells, this move doesn't sound like it will have any major impact on ANR, but it's an interesting way to diversify. Natural gas and coal are the 2 primary fuels of utilities in the US and having both options would provide coverage for any moves towards either option in the future.

In general, we doubt that ANR has the nat gas expertise so this move could be questioned, but anything in the Marcellus Shale is very valuable to have in your portfolio. Something worth watching in the future.

• The company announced a joint venture Tuesday with driller Rice Energy. The companies are investing a combined $20 million in four wells this year and could drill as many as 100 in the Marcellus, a rock bed the size of Greece that lies about 6,000 feet beneath New York, Pennsylvania, West Virginia and Ohio.
• Alpha, based in Abingdon, Va., acquired approximately 20,000 acres in the Marcellus shale when it bought Foundation Coal last July. Besides the new wells, Alpha also is doubling the capacity of a gas processing plant it owns to 10 million cubic feet a day, Crutchfield said.