Energy Prospectus

By Divya Balji
(Bloomberg) -- Shares of oil and gas producers jump in premarket trading Monday as the price of oil rallied on signs that the crude market is tightening.
* West Texas Intermediate topped $75 a barrel after a run of five weekly gains, while Brent was grinding toward $80
* Oil Extends Gains as WTI Jumps Above $75 on Global Energy Crunch
* Stock moves: Occidental Petroleum rises 3.54, Marathon Oil gains 2.8%, Tellurian climbs 6.2%, Frontline jumps 6%, APA Corp. gains 2.6%
** Devon Energy advances 2.8%, Hess Corp. rises 1.9%, Diamondback Energy is 2.5% higher
* The Energy Select Sector SPDR ETF is up about 2%
-----------------------------
If you listened to my Sept 26 podcast (available on the EPG home page) you know that Europe now realizes that the Green New Deal promises are lies. We now have a global energy shortage and if Europe has a winter similar to last year there will be a lot of citizens unable to obtain or afford the fuels needed to heat their homes. Coal fired power plants are being brought back online but there may not be enough. Wind and solar is unreliable, especially in the winter as we found last February in Texas.

The "Mother of all Bidding Wars" for natural gas supplies is now in the 2nd inning. The bids for LNG cargos delivered to Asia and Europe are now over $25/MMBtu and likely to go over $50 in Q4.

MGY was a no brainer last week , trading down to 16 ish on 7.5m insider sells with MGY picking up 3 m of them

Comstock Resources (CRK) is now my Top Pick in the Sweet 16. My current valuation is $21.00 with upside to that if natural gas stays over $5.00 thru Q1.

My Top Picks in the Small-Cap Growth Portfolio are:
InPlay Oil (IPOOF)
Hemisphere Energy (HMENF)
SilverBow Resources (SBOW)
Northern Oil & Gas (NOG)

Dan with the Gas stocks assuming we reach your targets will it be prudent to sell this winter as NG prices spike and relocate proceeds, or do you consider these multiyear buy and hold positions ? I am surprised (in a good way) how fast things are moving.

There is a short squeeze going on
Someone is blowing up here. It happened last time
I’ve been very critical of the heavy hedgers. They screwed up big time, imho
People were complaining last qtr when prices were only 3 and change. Now 6 plus
I can’t wait for q3 numbers

CreativeEquity:

I believe we have a "Structural Change" for the U.S. natural gas / NGL producers. Unless we have a very mild winter, demand for these valuable U.S. products will continue to exceed supply unless we have a doubling of the active rigs drilling for gas. Global demand for U.S. gas and NGLs will continue to increase.
Taking profits is never a bad idea.
It is an ever-changing market, so all I can do is give you my valuations based on how the market looks to me at any point in time.

Antero Resources (AR) is a good example of how quickly the outlook for an upstream company can change. In Q1 2020 they appeared to be in big trouble. Today they are in great shape. In 1.5 years, AR has increased 1,300%.