AlNieder

22 Dividend Stocks with Good Fundamentals

ATN is ~50% owned by ATLS, which announced ~ 2 weeks ago that it will buy (exchange) all shares of ATN for 1.16 shares of ATLS. The intent is to delete the high paying dividend of ATN and use that money to fund more wells in the Marcellus shale. Despite the dividend cut, it it appears overall to be a good deal for investors.

Is There Enough Natural Gas?

Michael - Your numbers are OK, but they do not consider economics (reality). The numbers you used are substantially accurate, 1 lb coal ~ 29.44 CF natural gas.
However, gas is much more expensive than coal - for a number of reasons that are unlikely to change. A typical coal deposit measures has 10s of millions to 10s of billions of tons, will produce for 10-100 years, transport costs are very low, doesn't cost much to change the routing scheme, and stockpiling at a utility plant is minimal.
A typical gas well has a less than 1 BCF, a lifespan of 3-10 years (producing most in the first 1-3 years), huge drill costs ($1-$5M/well), requires a significant infrastructure and significant delay to build between wells and consumption points, and is expensive to stockpile.
Delivered to a utility plant in the US, coal is ~$40 /ton, and gas is ~$6 /MCF, assuming that gas is available everywhere at that cost (and it isn’t) and that the gas supply is not subject to interruption. No matter how, when, or where it is sliced in the US, gas is at least 7x more expensive than coal .
There also is a huge difference in the costs between a coal-fired and a gas-fired utility plant. The cost to operate and sustain a gas-turbine can be ~3-10 higher than a coal plant, which explains why gas-plants are used for peak-loads (and why peak load billing is at the top of the list on energy conservation measures).
You have also not considered what happens when politics and stupidity (I’m sorry, that’s redundant) interfere with reality. (1) Do not be quick to add methane hydrates under the seas as reserves – there are no proven methods to recover those yet. (2) All the talk of ‘sequestering ’ huge amounts of C02 is… talk. There is NO PROVEN NOR ECONOMICAL way to do that, and NOT in the quanties that are proposed. There is more talk and little action of injecting CO2 to rejuvenate old gas & oil wells (to get some form of payback… but then the same idiots want to place even higher taxes on oil & gas). From a realistic point, the pipeline systems for CO2 cost the same as existing gas pipelines… which took 30+ years to build… and has been paid and sustained by the gas industry.
Run your calculations again to find out what a ‘carbon tax’ will add to the cost of electricity, and you will conclude that doubling the cost of coal essentially will double the cost of your electric bill. Oh, ‘poor people can’t afford’ that ? Not a problem for the same politicians proposing carbon taxes - your utility bills will increase to cover that, too. So, your ‘new’ utility bill will cost you 3x what is costs now.
What would help? Power plants in Germany are located near and in the large cities…. the reject heat from the utility plant is piped as hot water for heating large housing buildings and industrial plants. There is a huge infrastructure cost of the underground pipelines – but they are paid for by LOWER utility bills to the consumers. Not only does it simplify home heating, but it dramatically cuts down on the costs of winter heating and hot water…
Why isn’t that being proposed in the US? Only because the proposed carbon tax has everything to do with grabbing more tax money from your pocket and nothing to do with ‘global warming.’

Al Nieder, P.E.
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Atlas Pipeline: As Dividend Continues, Why Is Stock Falling?

Tim - (I have ATN, other oil, gas, & pipeline interests, and colleagues in the business. There is a general concensus that the (recent) high returns and dividends are unsustainable for numerous reasons. Among the reasons: (a) IF elected, Obama vows to screw oil, gas, and utility companies, owners, and stockholders - which may take place in the form of taxes, or 'environmental' restrictions on drilling, pipelines, carbon emissions, etc.. (b) Utility commissions (esp in states like CA, MA, MD, IL) demand utilities buy at commerical prices, fix for 8-10 years the allowable rates utlities can charge, and then demand utility companies subsidize 'low income' users. This will get worse considering the tough economic times. (c) The projected earnings consider the producer's hedge contracts thru 2010, which the utilities may be forced to abrogated or reduced by (b), (a), or (d). (d) The 'credit crunch' is causing producers to scale back drilling, pipeline development, etc., which not only cuts into projected profits, but also accelerates depletion and the liklihood of losing leases.