JANUARY 24, 2006
Advice from Standard and Poors
WORD ON THE STREET

Raymond James Starts CNX Gas at Strong Buy

Says the Appalachian coal producer CNX's recent spin-off is a unique pure-play on the growing coalbed methane market



Raymond James started covering CNX Gas (CXG ) with a strong buy, explaining that the Appalachian coal producer CNX's recent spin-off is a unique pure-play on coalbed methane (CBM.)


Analyst Wayne Andrews thinks coalbed methane is one of fastest growing segments of the North American natural gas market. He says CNX's undeveloped CBM acreage alone contains about 2,400 drilling locations, and conventional gas acreage adds another 6,400. He says the company's drilling success rates over the past 3 years have averaged virtually 100%, helping lead to moderate costs. He has a $31 stock price target, but given the company's above-average growth prospects, he believes upside to the target is likely.




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