Northern Explorations restates its position that Natural Gas is currently an undervalued opportunity with near term upside potential.

Norex Management agreed last months that a fundamental picture was developing that could result in a short-term cap on gas at $4 due to expectations of an inventory increase of at least 100 billion cubic feet. Certain analysts at that time indicated a need to see real evidence that storage injections are being curtailed in order to see a return in demand that would justify predicting a sustained rally.

The Company went on to point out a number of key factors that could well predicate a return to demand. These included a well documented U.S. natural gas production drop of 1.1 percent to 57.93 billion cubic feet per day from 2008 production as lower prices prompted drillers to idle rigs. Reduced exploration is predicted to accelerate this decline in output into 2010 with production forecast to fall 2.6 percent next year to 56.42 billion cubic feet a day as reported by the Energy Department. Furthermore, the number of rigs drilling for natural gas has dropped 56 percent from a peak of 1,606 in September and is at its lowest in more than six years, according to data from Baker Hughes Inc.

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