HI southside,
Rogue Dolphin just posted a great read on the sweet 16 gassers (on The Natural Resources thread.
It points out what laggards they have been, and value they represent.
Our Sweet 16 Growth Portfolio has gained 9.86% since November 1st and it is now down just 0.45% YTD, not counting dividends and the large gain we harvested on the 5-12-2025 sale of Veren to Whitecap Resources (WCP.TO), which is now one of my Top Picks for Growth + Income in our High Yield Income Portfolio.
Since November 1st the S&P 500 Index has gained 0.51% and is now up 16.81% YTD and it is up 22.4% since Trump's Tariff Plan was announced early in April. < The Democrat's FEAR campaign over the Tariff's is no longer mentioned by the Far Left Wackos.
As discussed in my November newsletter, I am super bullish on U.S. natural gas prices because (a) La Nina Winters usually start out much colder than normal in the area of the country that burns the most natural gas for space heating and (b) LNG exports from the U.S. will continue to ramp up to record levels in Q1 2026. Based on weather forecasts for the remainder of December, natural gas in U.S. storage locations should move below the 5-year average by year-end. If Q1 2026 winter weather is just normal it will be difficult, if not impossible, for upstream companies to refill storage before the 2026/2027 winter begins. If we have a hot summer in the U.S. it will be a VERY GOOD YEAR for "Gassers" (AR, CTRA, EQT, RRC).
HH Natural Gas prices are up 71.9% year-over-year and 21.4% month-over-month. < Current share prices for all of the Sweet 16 do not reflect this significant price spike.
All of the Sweet 16 companies produce a lot of natural gas and NGLs. The December weather is also bullish for NGL prices. The price of propane has increased by 14.8% month-over-month and should continue to increase over the next three months. NGL demand for space heating is going way up this month.
Among the "Gassers", the one that has the most share price upside is Antero Resources (AR). Antero's current production of approximately 583,500 Boepd has a mix based on Boe's per day is 62.8% natural gas, 36.0% NGLs and just 1.2% crude oil. < AR is the only Sweet 16 company that does not pay dividends. If they do starting paying dividends, I expect the share price to move quickly up to my current valuation of $42.00.
TipRanks 12-7-2025: "Based on 15 Wall Street analysts offering 12 month price targets for Antero Resources in the last 3 months. The average price target is $42.86 with a high forecast of $55.00 and a low forecast of $34.00. The average price target represents a 16.63% change from the last price of $36.75.
Among the "Gassers", the safest bet is Range Resources (RRC) because of its strong balance sheet and large inventory of low-risk / high-return development drilling locations in Appalachia. RRC also has an active stock repurchase program that should continue to increase per share value. Range's current production of approximately 382,500 Boepd has a mix is 68.3% natural gas, 30.0% NGLs and just 1.7% crude oil. < I do expect RRC to raise dividends in 2026 because they are soon going to exceed their debt reduction goal.
The "Purest Gasser" is EQT Corp. (EQT), the largest of the four Gassers with current production of approximately 1,100,000 Boepd with a mix of 93.9% natural gas, 5.6% NGLs and just 0.5% crude oil.
Crescent Energy (CRGY) closed at $9.98 on Friday, December 5th. It trades at the deepest discount to my current valuation of $24.00 per share. Crescent Energy should get a big revenue boost in 2026 from rising natural gas and NGLs prices. Vital Energy (VTLE) is going to merge into CRGY this month. My proforma forecast for 2026 is that the Company's production will increase from 253,000 Boepd in Q3 2025 to 395,000 Boepd in 2026 with a mix of 36.5% natural gas, 21.4% NGLs and 36.5% crude oil. < The CRGY and VTLE hedging programs have significantly reduced their oil price risk.
The three highest rated energy sector analysts that follow CRGY (all rated 5-Star by TipRanks) show these price targets:
John Freeman at Raymond James $17
Aryn Jayaram at JP Morgan $14
Gabriele Sorbara at Siebert William Shank $14
None of the price targets above have been updated for the recent spike in natural gas prices.
If you are a serious investor, I recommend that you subscribe to TipRanks Premium Service that is very helpful to me. It is less than $200 per year.
TipRanks: During Crescent Energy's Q3 2025 Conference Call, the company reported robust financial and operational performance exceeding expectations across key metrics. Highlights included generating approximately $204 million of levered free cash flow and achieving 253,000 barrels of oil equivalent per day in production, including 103,000 barrels of oil per day. The company announced a transformative acquisition of Vital Energy, positioning Crescent as a top 10 U.S. independent oil and gas producer and expected to deliver attractive cash-on-cash investment returns exceeding a 2x multiple of invested capital. Crescent also completed over $700 million in noncore divestitures this quarter, bringing the year-to-date total to over $800 million, which will be used to reduce debt significantly. The company maintained a consistent capital allocation approach, announcing a $0.12 per share dividend and repaying over $150 million in debt. With a bolstered borrowing base of $3.9 billion and extended credit facility terms, Crescent is well-positioned for sustained growth and operational excellence in the Eagle Ford, Permian, and Uinta regions.
After the CRGY + VTLE merger closes, CRGY will draw a lot more attention. It will be the 9th largest independent upstream oil & gas company based on production volume of close to 400,000 Boepd.
Crescent has announced six asset sales exceeding $900 million year-to-date. The Company has recently closed its previously announced conventional Rockies and Barnett divestitures and expects the remainder of its announced non-core asset sales to close before year-end. Proceeds from these transactions will be used to reduce outstanding borrowings on the Company’s revolving credit facility, further strengthening the Company’s balance sheet and enhancing financial flexibility.
This is part of the Crescent's debt restructuring program leading up to the Vital merger: finance.yahoo.com
The merger should close before Christmas.
The updated profiles for FANG, EOG, NOG and OVV are ready for my review. Vacation is over, so it is now time to work.
Dan Steffens
Energy Prospectus Group |
