3rd Leg Trading

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Interesting read.....The EIA projects that - trending from 2016 to 2040 - natural gas production will go from 27.4 quadrillion BTUs or quads (a quad is roughly a thousand BCF) to 39 quads. This 12.6 quad increase - an increase of nearly 50% - will be almost one half due to an increase in exports from 2.1 quads to 7.1 quads, and a decrease in imports from 3.1 quads to 1.3 quads. Net exports are projected to go from a negative number in 2016 to 5.8 quads in 2040. Total natural gas exports are projected to increase by 240% to 7.1 quads in 2040. The increase in total natural gas exports (and therefore LNG exports) is one of the most robust predictions in the EIA forecast. In addition to the base case projection of a 240% increase, the very pessimistic "Low Oil and Gas resource and technology case" projects a 136% increase, and the "High Oil and Gas resource and technology case" projects a 458% increase. In the short term, EIA is projecting that LNG exports will increase to a level of roughly 1 quad (about 3.5% of total US production) by 2018. As we move forward, we should see a steadily increasing flow of LNG exports which will result domestic natural gas production to steadily increase.

The Midstream Sector is trading at its lowest valuations in years!

During the year 2017, investors have favored growth and momentum stocks over "value stocks" (i.e., stocks with a low P/E ratio), including high paying dividend stocks. While most momentum stocks are currently trading at over-stretched valuations due to the recent gains, several high yield sectors (notably Midstream MLPs, Property REITs and BDCs) have become "deep value stocks", with plenty of upside potential. This phenomenon can be attributed to the fact that investors have been piling up on momentum stocks, - including FANG stocks. Money has been chasing the same stock driving prices higher.

What is worthy to note is that despite all the bullish news about natural gas exports, and recent news from the Energy Information and Administration ("EIA") that the United States will become the world's "undisputed" leader in oil production by the year 2025, most midstream MLPs are trading around their respective 52-week lows.

In fact, the midstream sector (including natural gas midstream) is currently trading at multi-year low valuations.

5 High-Yield Companies Set to Benefit from a Booming Natural Gas Production

The midstream companies that already own established natural gas assets are ahead of the game, and are set to benefit the most from increased natural gas production and/or LNG exports. These companies are worthy of consideration by investors in a world in which US natural gas production should steadily increase as we go forward.

Below is a list of 5 high-yield companies that are set to benefit from this trend:

click on link below:

https://seekingalpha.com/article/4131013-bank-u-s-natural-gas-growth-high-yield-mlps-13_7-percent


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