Large Cap Stocks
Shell has joined the departing major oil companies in selling assets in the shale fields of America. Chevron, BP, Marathon, ConocoPhillips & ExxonMobil have each sold off most of their US shale oil and tight gas properties. They acknowledge that this is a job for the independents, that they paid too much for the rights and that their expertise lies in large scale projects.
Major global industries are moving production to the US. Linde, a German engineering firm has announced a $200M plant in Texas, advantaging inexpensive gas prices. Incitec, from Australia, is building an $850M ammonia plant in Louisiana. Their CEO said, ‘The U S is really the most attractive place in the world to invest.’ Sasol, of South Africa is building a $6B ethane plant in LA. Swiss firm Ineos is joint venturing with them on another $12B plastics and chemicals plant.
A 4th LNG export terminal has been approved by DOE, this time in Maryland, for Dominion Resources, to access the nearby Marcellus gas fields. They paln to spend $4B on the plant – and to spin it off into two MLPs next year, one for the plant another for the pipeline bringing in the gas. $1B/yr EBITDA is the expected revenue generation capability of each new firm.
Meanwhile, Chesapeake continues to be the bad guy in PA, as it reduces royalty checks to lease holders by as much as 60% for ‘transportation adjustments’. The cost cutting has added value to the firm’s shares which have risen by a similar 60% under the new CEO. It has also driven the ire of PA lawmakers who have introduced three bills to refuse such loyalty reductions
Individual Stock Investments
Often, we read about large industrial companies or power providers with expansive customer bases that have chosen to use natural gas. With its many economic and environmental benefits, it’s the smart choice to power a business. But natural gas can also power small companies, where skilled artisans create unique and detailed pieces of art in a range of rich colors and designs. At West Virginia’s Blenko Glass, natural gas is powering the art of hand-blown glass creation.
In the past year and a half alone, the company has saved $200,000 on its energy costs, enabling the company to invest in new equipment and begin a 10-year plan to upgrade their entire facility. Natural gas can affordably and efficiently power business of all sizes.