US and Canadian oil and gas producers have long coveted exports of liquefied natural gas (LNG) as a potential release valve for the domestic oversupply of natural gas, a product of the industry’s aggressive drilling in the Marcellus Shale and other prolific unconventional resource plays.
Although surging output from US shale fields enabled the US to offset declining volumes from the Gulf of Mexico and overtake Russia as the world’s leading producer of natural gas, upstream operators’ drilling success hasn’t necessarily translated into financial outperformance.
Robust production from prolific unconventional fields sent North American natural-gas prices spiraling lower, while the no-show winter of 2011-12 increased this oversupply and depressed prices even further in the first half of 2013.
Prices have recovered somewhat in the new year, thanks to robust demand for heating during the frigid 2013-14 winter. However, the price of the commodity has merely recovered to historically depressed levels from ultra-depressed levels.
Looking for arbitrage opportunities, the US oil and gas industry pushed hard for the Dept of Energy to approve increased LNG exports via specialized tankers. A quick glance at the difference between Henry Hub prices and international prices underscores the appeal of US LNG exports to companies on either side of the trade.
In this issue, we survey the push for LNG exports in North America and highlight our favorite plays on this trend, as well as some names to avoid.
Global LNG volumes have stagnated over the past two years, reflecting a lull in the completion of new liquefaction capacity.
Crude-oil inventories in Cushing, Okla., the delivery point for West Texas Intermediate (WTI), have tumbled by 44 percent from year-ago levels.
Income-seeking investors all too often pick the master limited partnerships (MLP) in their portfolios based on their distribution yields, ignoring critical factors such as the underlying business, growth potential and valuations relative to their peers.
With US propane production expected to increase by another 18 percent this year as new gas-processing and fractionation plants come onstream, US exports remain an important release valve to help balance the domestic market.
We dropped SeaDrill (NYSE: SDRL) from our Focus List in September 2013, when the stock had surged to $45.00 per share--more than $12.00 above the current quote. But investors who haven't joined Energy & Income Advisor still own the stock; here's why we currently rate SeaDrill a Sell.
At Enterprise Products Partners LP's recent analyst meeting, management shared its updated forecast for North American energy markets, highlighting several emerging opportunities that have broader investment implications.
Investors shouldn’t mistake this seasonal surge in propane and natural-gas prices for a durable rally; the underlying supply and demand trends that prevailed before the Polar Vortex are still in play.
Every month, Roger Conrad and I host an exclusive Live Chat with Energy & Income Advisor subscribers. February's four-hour discussion was particularly lively; we decided to present an excerpt of some of our readers’ most frequent questions and our responses.
The uncertainty surrounding the cross-border leg of TransCanada Corp's Keystone XL pipeline hasn't diminished the company's growth prospects. We examine the investment opportunities behind the controversy.
Elliott and Roger on Apr. 28, 2014
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