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Going Global with Natural Resources

08/18/2006 12:00 am EST


Louis Navellier

Editor, Growth Investor, Breakthrough Stocks & Accelerated Profits

Global investor Louis Navellier brings his subscribers the benefit of his in-depth research on investing, providing insight into growing businesses around the world. Here, he shines the spotlight on two resource companies with excellent prospects…


“Britain's National Grid PLC (NGG NYSE), formerly known as National Grid Transco, is the sole owner and operator of the electricity transmission system in England and Wales. The company serves more than 52 million people. National Grid also operates the British natural gas transmission and distribution system through its National Grid Gas subsidiary and has international electric and gas utility operations, primarily through subsidiary National Grid USA. The company's other operations include telecommunications and utility infrastructure services.


“National Grid is continuing its US expansion. The company's shareholders recently approved a $7.3 billion purchase of utility KeySpan Corporation. (This acquisition also requires the approval with the New York State Public Service Commission and the Federal Energy Regulatory Commission, which is still pending.) National Grid is also planning to file with the New Hampshire Public Utilities Commission. In July, the Federal Trade Commission granted antitrust clearance for the KeySpan deal. After the KeySpan acquisition is completed, it will create one of the largest US utilities.


Tatneft (TNT NYSE) is back for an encore. One of Russia's largest integrated oil companies; it explores, produces, refines, and markets oil and gas. The company sits on six billion barrels of proven crude oil reserves and accounts for about 8% of Russia's total oil production. Tatneft also has proved reserves of 1.5 trillion cubic feet of natural gas. The company has formed joint ventures and strategic alliances with Russian and Western oil and gas companies. The Tatar government owns a third of Tatneft's outstanding stock.


“One of the reasons I sold Tatneft earlier was that, the company was lax in complying with US accounting standards. However, that has changed. PricewaterhouseCoopers is now auditing Tatneft's US GAAP financial statements. Tatneft expects to publish its 2005 US GAAP financial statements and file its "2005 20-F" with the SEC, as well as release its unaudited US GAAP financial statements for the first six months of 2006 in the fourth quarter of 2006.


“By the end of this month, the company will announce a more detailed timetable. Tatneft's US GAAP financial statements for 2003 and 2004 were audited by Ernst & Young, and the company's US GAAP financial statements for periods prior to that were audited by PricewaterhouseCoopers. Frankly, Tatneft's move to engage PricewaterhouseCoopers is a welcome relief. There is no doubt that the company is aggressively boosting its oil and gas production and is in good favor with Russian President Vladimir Putin—which is important these days.”

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