The pricing scenario of natural gas is significantly healthier this year than last year. In its short-term energy outlook, the U.S. Energy Information Administration (“EIA”) revealed its forecast of the Henry Hub spot average price in the first quarter of 2023 to be more than $6.00 per million British thermal units (MMBtu), considerably higher than the commodity’s average price of $5.50/MMBtu for November. EIA said that the healthier price is being backed by increasing export of LNG and improved demand for natural gas in winter.
A favorable price is also backing the production of the commodity. EIA has revised its projection upward for 2023 natural gas production. From the prior forecast of 99.7 billion cubic feet per day, EIA now expects the commodity’s production at 100.4 billion cubic feet per day next year.
Stocks to Gain
Given the background for healthy commodity price and production, it’s high time for energy investors to keep an eye on these three natural gas exploration and production companies. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Antero Resources AR is the fifth-largest natural gas producer in the United States. In the country, the upstream player is also touted as the second-largest NGL producer. In the prolific gas-rich Marcellus, Antero has roughly 1,542 premium undeveloped locations. Overall, AR has more than 20 years of premium core drilling inventory, brightening its production outlook.
EQT Corporation EQT is a leading Appalachian natural gas producer. Apart from doubling the ‘22–’23 share repurchase authorization to $2 billion, EQT has also increased its target for debt reduction from $2.5 billion to $4 billion for next year. Also, its overall business gets strengthened following its strategic bolt-on acquisition.
With a strong focus on developing the most prolific shale gas basins in the nation, Southwestern Energy Company SWN is a leading producer and marketer of natural gas in the United States. Backed by its disciplined enterprise risk management, SWN is improving in financial strength. With the development of core acres in two premier natural gas basins in the United States, Southwestern Energy generates resilient free cash flow.
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