Out Fox The $treet

Another quarter, and yet another disappointment from Nuverra Environmental Solutions (NYSE: NES ) . The company that promised an attractive environmental solution to the dirty energy sector has yet to deliver on that promise to investors. Most recently, the old Heckmann released preliminary Q2 2013 results that greatly disappointed the market. A major contributing factor was weather, but is that enough to create a golden buying opportunity after the stock plunged? The more » Disclosure: Long CJES and NES. Please review the disclaimer page for more details. 

Based on the limited positive reaction of natural gas and coal stocks, the market continues to ignore the very bullish natural gas weekly inventory reports . In fact, the reports are now mostly glazed over in the financial media. For those that missed the report last week, the weekly inventories for the first full week of April dropped 14 Bcf. While less than the 21 Bcf expected drop, the small decline more » Disclosure: Long CJES & HEK. Please review the disclaimer page for more details. 

It wasn't too long ago that Heckmann Corporation ( HEK ) had completed an accretive merger that should've driven the stock higher. On the way to large gains, the market for environmental services has hit road bumps as demand for shale drilling has declined. Oddly though, analysts have become more constructive on the oil services stocks outside of this general area. The company is a leading environmental services provider dedicated to the movement, treatment and disposal of water generated by energy companies involved in the production of oil, natural gas liquids and natural gas. The game-changing merger with Power Fuels (see Heckmann Makes Game-Changing Merger ) promised significant improvements to margins and profits, but did the owners of that company become the big winners? Read the full article at Seeking Alpha. Disclosure: Long CJES and HEK. Please review the disclaimer page for more details. 

Just about 50 days ago, Heckmann (HEK) announced the deal to purchase Power Fuels. The deal turns Heckmann into a domestic leader in the wastewater removal industry supporting the shale oil and gas boom. See our article "Heckmann Makes Game-Changing Merger" for more details on the deal. While the stock initially popped from just above $2.50 all the way to $5, it has now slumped all the way to the $3.60s. Lower drilling in the domestic U.S. where both Heckmann and Power Fuels operate has impacted the excitement over the deal. Have the economics really changed that much to warrant a 30% drop? Makes us wonder what is going on. Read the full article at Seeking Alpha. Disclosure: Long HECK. Please review the disclaimer page for more details. 

Part I of this series focused on the continual reduction of rigs exploring for natural gas in the domestic U.S. lower 48. All the while, commodity prices continue to surge upward with futures prices even higher. This third part will focus on the oil service providers that will benefit from what could become surging demand for services work as both oil and natural gas producers scramble for available crews. As mentioned in Part I, the Baker Hughes (BHI) rig report on October 12th showed an interesting divergence with the commodity markets. While natural gas has jumped some 60% in the past few months, the amount of rigs drilling for natural gas plunged to lows not seen since 1999. On the October 19th report, the natural gas rig count increased 5 up to 427. A year ago, the count was 927. Read the full article at Seeking Alpha. Disclosure: Long CJES, HEK, WFT. Please review the disclaimer page for more details. 

The Baker Hughes (BHI) rig report on Friday showed an interesting divergence with the commodity markets. While natural gas has jumped some 60% in the past few months, the amount of rigs drilling for natural gas has plunged to lows not seen since 1999. In the last week, the natural gas rig count dropped another 15 to only 422. Last year, the count was 936. For investors expecting that exploration companies can quickly turn on the drilling spigot, one needs to note the most concerning part of the report is that the percentage of rigs drilling for natural gas is the lowest ever at 23%. The concern is that limited rigs and service personnel might exist for a rebound in demand. This is the first part of a series focusing on the potential beneficiaries and losers of a pending spike in natural gas prices while most of the available drilling rigs are focused on oil. Read the full article at Seeking Alpha. Disclosure: Long CJES, HEK, WFT. Please review the disclaimer page for more d...

After a very warm winter in 2011, natural gas inventories accumulated to levels much higher than the 5 year average norms. The resulting impact was a desire to move drilling rigs away from natural gas producing regions such as the Haynesville into oil producing regions such as the Eagle Ford. Combine the rapid reduction in drilling rigs with the extremely hot summer and natural gas inventories are now approaching normal levels. In fact the, EIA reported only a 72bcf increase to the inventories for the last week. Typically the number for the first week of October tops 100bcf.  See chart below: While the above chart from the EIA doesn't show the daily production and useage totals, it does clearly highlight how the excesses from last winter have been worked off. On top of that, a vast majority of rigs have been moved out of the gas regions suggesting production declines could start hitting the market. These rigs are now being used in the oil producing regions where $90+ oil ...

Prior to the open on Tuesday, Heckmann (HEK) announced a merger agreement for Power Fuels owned by Badlands Energy, LLC. The deal creates a leading environmental services company focused on energy and industrial end-markets. The company is an environmental services provider dedicated to the movement, treatment and disposal of water generated by energy companies involved in the discovery and production of oil, natural gas liquids and natural gas. The stock surged nearly 40% on Tuesday as the deal creates a potential game changer for the handling of fracking fluids. The deal is also highly accretive causing investors to take notice of a stock that had been crushed this year. Read the full article at Seeking Alpha. Disclosure: Long HEK. Please review the disclaimer page for more details. 

After watching a Mad Money feature on little known Key Energy Services (KEG), it got me to wondering what other oil service plays I didn't really know. Everybody has heard of the big players in the sector such as Haliburton (HAL), Schlumberger (SLB), and Baker Hughes (BHI). What about the second tier companies? Hydraulic fracturing and horizontal drilling remain all the rage, even with natural gas prices plunging to 10 year lows this year. Even with expected rigs drilling for natural gas declining, it wouldn't be surprising to see them move directly into oil shale plays as oil remains around $100. Not to mention one needs to be careful when focusing on the current price of natural gas as future prices on the NYMEX remain in the $4-5 range. Read full story on Seeking Alpha. Disclosure: Long CJES. Please review the disclaimer page for more details

As most investors know, Natural Gas prices have been severely depressed due to the dramatic increase in supply over the last several years. All at a time that demand has stalled due to the Great Recession. Not to mention that Nat Gas is a domestic play as the US doesn't have the capabilities to export LNG. This is the major reason that Stone Fox Capital has heavily invested in copper and met coal stocks instead of the gasey variety. Those other commodities are greatly benefiting from the demand surge from China, India, and the emerging world. Nat Gas has been completely shut out of that opportunity.  At least until now if Shawn Hackett of Hackett Financial Advisors is correct. Hackett in a Minyanville.com article makes the case for a parabolic move in nat gas due to the tetonic shift of nat gas to a global pricing mechanism. According to him the US will be able to export natural gas in the next 12 months though I had previously thought it wouldn't be until at least 2015 befor...