Yes.
I’m bullish on the oil/gas sector right now (and have been for the last year).
Oil & Gas Firms - SLB, HAL, EOG, APC, BHI, MTDR, APA, PXD, DVN, WLL, CLR, NGLS, MWE, CHK
Supply Chain - SLCA, HCLP, CRR, UNP, CSX, NSC
This is what I’m looking for. THanks for the tickers
Yeah, no problem. Hydraulic fracturing, in particular, is anticipated to increase significantly over the next several years. So, I’m more focused on firms contributing to the fracking process. Many people will provide some nonsense about environmental hazards and legislation against fracking, but there’s only about 10% truth to most claims. There’s a huge information asymmetry between firms that perform fracking and the general public. Drilling occurs about 7,000 to 10,000 feet below the subcutaneous surface. In order for fresh water to be impacted, drilling would have to occur somewhere between 500 to 2,000 feet, which pretty much never happens. One of my Ivy friends works in the industry and we’ve discussed this in great depth. There are also concerns about prices of oil and gas, fracking, potential state/local government regulations, legislation, and economic volatility, but most, if not all, of them can be dispelled by educating investors and the public. The general consensus and investor sentiment right now is long on most of these and other O&G stocks.
Have you done much reading on the liquification and shipment of gas? I’ve only started but seems to be a good thing for the market, as foreign gas markets seem to trade at higher prices (although the supply will bring these down somewhat)
LNG is a capex monster and carries huge execution risk. You need a multi-billion dollar terminal on both ends plus an expensive tanker which is a floating Hiroshima. Its like all risks inherent with pipelines times 10, but returns that aren’t that much more attractive.
^ LNG sounds good in theory, but like geo says, it requires terminals which cost tens of billions each, as well as huge NIMBYism (look at the ones they’re looking to build off BC). I have no interest in investing in companies like Cheniere that are hugely exposed or pure play LNG companies. Cheniere is essentially a glorified general contractor. For years all they’ve done is build this LNG facility, and they still have years of construction to go. Yet they’ve spent hundeds of millions in exec compensation.
The long view is the private equity firms that are gobbling up billions of dollars in natural gas assets that will be in prime position to provide gas to the LNG terminals. Buy now while gas prices are low and the energy companies are looking to sell their gas assets and buy oil assets b/c thats what the street wants to see.
I agree this is a solid buy low time on natural gas. It may be a very long play, however.