Energy Prospectus

US-based producers EOG Resources (NYSE: EOG) and Apache Corp (NYSE: APA) are behind the Kitimat LNG joint venture, an export facility sited in Bish Cove, British Columbia that would supply Asian markets with natural gas sourced from the partners’ operations in the Horn River Basin.

In 2009 the duo announced a memorandum of understanding (MOU) with Korea Gas Corp (Seoul: 036460) whereby the world’s largest LNG importer would purchase up to 40 percent of Kitimat’s output. The agreement also included an option for Korea Gas to buy an equity stake in the project.

The initial plan calls for a facility capable of processing 5 million metric tons per annum (mmtpa), though capacity could eventually double in size if warranted. The partnership recently filed with Canada’s National Energy Board for a 20-year permit to export up to 10 mmtpa of LNG per year and expects to bring the facility onstream in 2015.

This will be very big for the Western Canadian gas market.

hmmm...I sold my ECA a few months ago...will they be a big beneficiary of LNG from BC? Any ideas on other beaten-up gassers that might shine with LNG? Or will there be a surplus of LNG for a few years?

Just keep in mind that LNG exports out of North America is still several years away. We are currently tracking several gassers on our Watch List. If the NG price improves we will alert you to the good companies. That's my job.

ECA is a darn good company and a former Sweet 16 member.

EOG Resources is down about 6% YTD but it will stay in the Sweet 16 for 2011 because its liquids production is growing at a steady pace. EOG has some of the best acreage, and a lot of it, in the Bakken and Eagle Ford. More than half of the company's revenues already come from the sales of liquids.

http://stocks.investopedia.com/stock-an ... er=YahooSA

Presentation:

http://www.eogresources.com/investors/s ... s_0111.pdf

Stock has begun to show life. Perhaps it is catch up time.

The ugly duckling is being recognized.

yesterday - Canaccord Genuity iniates buy with 128 PT
today - Wunderlich iniates buy with 122 PT

Get your shares under 100 or risk chasing later. This is one of the few E&Ps that have not had a run recently.

My Fair Value estimate is currently $120/share and I can see EOG going to $150/share if oil prices go where I'm expecting. Also, they will soon have some very good Eagle Ford wells to report.