Natural gas is now back in fashion in a very big way and the new mantra is that domestic sources in combination with renewable energy are the only true answer to energy security.
In early February, Germany earmarked $16 billion for the construction of four natural gas power plants to complement a renewable energy expansion push. And Austria has recently made its largest natural gas discovery in four decades—enough to increase its domestic production by 50%.
All of this pinpoints Europe as one of the best and most exciting places to be for new energy opportunities, and that means huge opportunities for companies to come in and develop gas fields that were overlooked by the supermajors, who have taken to chasing bigger things in offshore frontiers.
Below are two companies well-positioned to take advantage of the new energy security atmosphere in Europe:
#1 MCF Energy (TSXV:MCF; OTC:MCFNF) Small-cap MCF Energy, backed by veteran explorer and producer, Ford Nicholson, is convinced that this is the right atmosphere in which to foster European energy security through domestic natural gas production.
Germany and Austria are key venues for this, and MCF is tapping into five key prospects several of which have had wells that have produced or are capable of producing gas from , three previous discoveries.
MCF Energy is the first new public company consolidating major exploration projects in Europe, and it’s the first since Russia invaded Ukraine to offer investors an opportunity to help build domestic natural gas resources in Germany and Austria.
The company is targeting large-scale natural gas exploration and production here, with two drills in the next several months, the first of which has already begun in Austria, in the Welchau prospect near the Austrian Alps. Strategically located only 18 kilometers from a pipeline, Welchau is adjacent to an up-dip from a discovery that intersected at least a 400-meter gas column previously. According to MCF, all elements are in place here for a significant discovery.
MCF management has indicated an intent to move its drill bit after the well at Welchau within a matter of weeks from Austria into Germany, in the Lech prospect, where it will re-enter a well previously drilled by Mobil (now Exxon) in the ‘80s, with proven gas and oil.
Thanks to its 100% acquisition of German Genexco last year, MCF Energy is now ready to drill down for some much-needed domestic energy resources for Germany.
MCF’s second drill, planned for March, is in Bavaria, which is home to the company’s Lech and East Lech concessions, which cover 10 sq km and 100 sq km, respectively. Lech has three previously drilled wells and two discoveries. Adjacent to this, Lech East, in southwest Bavaria, is a large-scale concession covering ~100 square kilometers, with significant 3D seismic and AI showing more potential ahead of MCF Energy’s planned 4.6-million-euro exploration program.
At Lech, MCF will re-enter Mobil’s former Kinsau #1 well, adapting new drilling technology and eventually horizontal wells to stimulate the hydrocarbons that are already known to exist. Mobil established production rates of over 24 MMCF per day of natural gas with associated condensate from the Kinsau #1 in the ‘80s. Mobil was exploring for oil so never developed the gas discovery. The second well drilled by Mobil found oil in a deeper zone which produced at about 180 BOPD with associated gas but with low oil prices was also never developed.
This well, being a re-entry of a proven, previously drilled hole could translate into quick cash flow for MCF Energy, and one hit could flare out into multiple development zones for each well.
About a week into a 40-day drill in Austria and only several months away from its first drill into Germany’s proven resources, MCF Energy is convinced it’s on track for a hit that could give Germany a partial domestic solution to its ongoing energy security problems.
#2 BP Plc (NYSE:BP)
What BP brings to the table is more significant than ever for European energy security. In mid-February, BP (as the key player in the Shah Deniz consortium) flipped the switch on its Shah Deniz 2 gas development in the Caspian Sea with first production.
This massive project, offshore Azerbaijan, currently has a production capacity of around 79 million standard cubic meters of gas per day (29 billion per year).
Late last year, Azerbaijan said it was on target to double gas exports to Europe by 2027, having exported over 8 billion cubic meters of gas to Europe in 2021, and with 12 billion cubic meters targeted for 2023.
Last summer, BP signed a long-term LNG supply deal with Austria’s OMV (VI:OMV) in bid said to help improve European energy security in the aftermath of Russia’s 2022 invasion of Ukraine.
BP is banking on being a key player in the European energy security game, now, and the only thing dampening this outlook right now is the Biden Administration’s move in January to pause new LNG projects in the U.S.
This stock has been beaten down, but there may be new headwinds.
Earlier this year, BP said it was refocusing on its oil and gas business, particularly its U.S. operations, where it is one of the two largest producers in the Gulf of Mexico, and carries its own weight in the Permian basin and other American shale patches. In fact, by 2030, BP is targeting an increase of oil and gas production by more than 50%, with about half of that production to come from the U.S.
BP share price still does not reflect this, which indicates a potential buy-on-the-dip (in this case, a long-running dip).
Bonus: 10 More Companies Looking To Capitalize on the Energy Bull Market
Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR), widely known as Petrobras, stands as Brazil’s flagship in the global energy landscape, chiefly engaging in the exploration, production, and distribution of oil and natural gas. Notably, Petrobras has pivoted towards leveraging its vast oil reserves and cutting-edge deep-water exploration capabilities to assert a stronger presence on the international stage, including potential markets in Europe. With Europe’s growing dependency on imported energy, Petrobras’s expansive portfolio of high-quality crude oil and LNG could see increased demand, positioning the company as a pivotal supplier amidst the continent’s diversifying energy supply chain.
Moreover, the company’s strategic investments in offshore pre-salt oil fields, which yield low-sulfur content crude, align well with Europe’s stringent environmental standards, potentially giving Petrobras an edge in European markets. This alignment, combined with global shifts in energy supply dynamics, could see Petrobras benefitting from favorable pricing and increased market share in Europe, especially as the continent seeks reliable energy partners outside of its traditional supply zones.
Petrobras presents an intriguing prospect through its potential indirect involvement in Europe’s energy sector. The company’s strategic global positioning, coupled with Europe’s evolving energy landscape, could afford Petrobras enhanced profitability and growth, making it an attractive option for those looking to capitalize on the intersections of global energy demands and regional supply shifts.
Ecopetrol S.A. (NYSE:EC), Colombia’s national oil company, has expanded its operational horizon beyond the Americas, eyeing the global stage with its diversified portfolio of energy assets. As Europe grapples with energy security and seeks to diversify its energy imports, Ecopetrol’s potential as a supplier of crude oil and derivative products to European markets becomes increasingly significant. The company’s commitment to innovation and sustainability, including initiatives in carbon capture and renewable energy, aligns with the European Union’s green energy objectives, presenting mutual benefits in trade relationships.
Ecopetrol’s strategic initiatives, such as exploring new reserves and enhancing its refining capabilities, position the company to respond adeptly to the rising demand in Europe for cleaner fuels and reliable energy sources. Additionally, the geopolitical landscape and fluctuations in global energy prices due to uncertainties in traditional energy supply regions may offer Ecopetrol leverage in negotiating long-term supply contracts with European counterparts, enhancing its market presence and profitability.
Investors eyeing Ecopetrol can anticipate potential growth opportunities as the company navigates the complexities of the European energy market. Ecopetrol’s proactive stance on sustainability and its strategic global engagements could yield substantial dividends, marking it as a forward-thinking player in the global energy sector, poised to benefit from Europe’s evolving energy needs.
Devon Energy Corporation (NYSE:DVN), a leading American oil and natural gas exploration and production company, primarily operates within North America’s most prolific basins. However, the evolving dynamics of the global energy market, particularly Europe’s increasing reliance on LNG and the quest for diversified energy sources, could position Devon as a beneficiary of heightened demand and favorable pricing, especially for its LNG and natural gas products. Devon’s strategic focus on optimizing its asset portfolio and leveraging technological advancements in hydraulic fracturing and horizontal drilling enhances its production efficiency and capacity to meet international demands.
As Europe accelerates its transition towards greener energy sources amidst geopolitical tensions affecting traditional supply lines, Devon’s potential to export LNG to European markets could see a significant uptick. The company’s agility in responding to market demands and its capacity to increase natural gas production could make it an attractive partner for European nations seeking to bolster their energy security with reliable and cleaner energy alternatives.
Devon Energy offers a compelling narrative of growth driven by strategic market positioning and operational excellence. The company’s potential indirect involvement in Europe’s energy sector through LNG exports and its role in supporting the continent’s energy diversification efforts underscore its attractiveness as an investment prospect, promising stability and growth amidst global energy transitions.
Chesapeake Energy Corporation (NYSE:CHK), re-emerging as a leaner and more focused entity, has positioned itself as a key player in the United States’ natural gas and oil sectors, particularly in the Marcellus Shale and Haynesville formations. With Europe’s intensified search for alternative energy sources to diversify away from Russian gas, Chesapeake’s role as a significant natural gas producer positions it advantageously to capitalize on this demand surge. The company’s commitment to sustainability and reducing methane emissions further aligns with Europe’s stringent environmental standards, making its LNG exports increasingly attractive to European countries striving to balance energy security with environmental concerns.
Furthermore, Chesapeake’s strategic focus on technological innovation and operational efficiency enhances its ability to respond swiftly to international market demands. As European nations increasingly turn to LNG to ensure energy security and transition towards greener fuels, Chesapeake could see an expansion in its international footprint through potential exports or partnerships with European energy firms.
Chesapeake Energy can anticipate the company leveraging the current geopolitical landscape and Europe’s energy needs to possibly expand its market reach. The combination of Chesapeake’s resource base, environmental commitment, and the strategic pivot of European energy policies presents a fertile ground for growth, positioning it as a compelling investment in the evolving global energy matrix.
Kinder Morgan, Inc. (NYSE:KMI) stands as one of the largest energy infrastructure companies in North America, with a vast network of pipelines and terminals that could play a pivotal role in meeting Europe’s increasing demand for natural gas and LNG. As Europe seeks to secure stable and diversified energy supplies, Kinder Morgan’s infrastructure and operations in LNG export terminals, notably the Elba Island LNG facility, are well-poised to support this demand. The company’s expertise in energy transportation and storage, coupled with strategic locations of its facilities, enables it to facilitate the transatlantic flow of LNG to Europe.
The heightened interest in LNG as a bridge fuel in Europe, amid the transition to renewable energy, underscores the potential for Kinder Morgan to strengthen its presence in the global LNG market. The company’s ongoing investments in expanding its LNG export capacity align with Europe’s urgent need to diversify its energy sources, providing a unique opportunity for Kinder Morgan to emerge as a key supplier.
Kinder Morgan represents an attractive proposition, leveraging its infrastructure assets and operational prowess to tap into the lucrative European energy market. The company’s ability to contribute significantly to Europe’s energy diversification efforts, coupled with its robust business model, positions Kinder Morgan as a stable and growth-oriented investment in the energy sector’s future landscape.
EQT Corporation (NYSE:EQT) recognized as the largest producer of natural gas in the United States, primarily operates in the Appalachian Basin. With Europe’s accelerated push towards reducing dependency on Russian gas and enhancing energy security, EQT’s vast natural gas reserves and production capabilities position it as a critical player in the global energy market. The company’s strategic focus on increasing operational efficiency and reducing emissions further aligns with the European Union’s environmental and energy goals, making it a prime candidate to supply LNG to the continent.
The ongoing expansion of LNG infrastructure in Europe, combined with EQT’s commitment to sustainability and operational excellence, sets the stage for potential lucrative export opportunities. EQT’s ability to ramp up production and supply LNG in response to international demand highlights its potential role in supporting Europe’s energy transition and security strategies.
EQT Corporation can expect the company to potentially leverage the growing European demand for cleaner energy sources. EQT’s strategic position in the natural gas market, along with Europe’s evolving energy landscape, presents a favorable outlook for growth and market expansion. As Europe continues to seek stable and sustainable energy supplies, EQT stands ready to meet this demand, offering a promising avenue for investors keen on the energy sector’s dynamic global shifts.
Marathon Petroleum Corporation (NYSE:MPC), one of the leading refining, marketing, and transportation companies in the U.S., plays a crucial role in the global energy supply chain. With its extensive refining capacity and operations, including midstream services, Marathon Petroleum is well-positioned to impact Europe’s energy market, particularly through the export of refined petroleum products. Europe’s ongoing transition towards cleaner energy sources and its need for diversified oil products supply could see increased demand for Marathon’s high-quality, low-sulfur content fuels, which are essential for meeting stringent environmental standards.
Moreover, Marathon’s strategic investments in logistics and export facilities enhance its capability to serve international markets, including Europe. The company’s proficiency in producing specialty products, such as petrochemicals and asphalt, aligns with Europe’s industrial and infrastructure needs, presenting additional export opportunities.
Marathon Petroleum offers a blend of operational excellence and strategic market engagement. The company’s ability to adapt to global energy demands and its pivotal role in the refined products market position it as a strong contender for capitalizing on Europe’s diverse energy and industrial requirements, making MPC an attractive proposition for those looking to invest in a dynamic global energy player.
Energy Transfer LP (NYSE:ET), renowned for its expansive portfolio of energy assets, including pipelines, storage facilities, and LNG terminals, stands as a significant contributor to the energy infrastructure landscape in North America. With Europe’s increasing demand for secure and diversified energy sources, particularly natural gas and LNG, Energy Transfer’s operational capabilities and strategic investments in LNG export infrastructure, such as the Lake Charles LNG project, could become increasingly relevant to the European market.
The company’s extensive midstream operations facilitate the efficient transportation and export of natural gas, positioning Energy Transfer as a potential key player in supplying LNG to Europe. As the continent seeks to reduce its reliance on Russian gas amid geopolitical tensions, Energy Transfer’s capacity to deliver LNG could support Europe’s energy security and diversification efforts.
Energy Transfer LP are looking at a company with the infrastructure and strategic foresight to benefit from the growing global demand for LNG. Its role in facilitating energy exports, particularly to energy-hungry markets like Europe, underscores its growth potential and the opportunity to participate in the global energy transition narrative.
Capital Product Partners L.P. (NASDAQ:CPLP), an international shipping company specializing in the seaborne transportation of energy commodities, including LNG, crude oil, and refined oil products, is strategically positioned to benefit from Europe’s diversifying energy supply chains. With Europe intensifying its search for alternative energy supplies, CPLP’s fleet of vessels could play a vital role in ensuring the continuous flow of energy commodities to the continent.
CPLP’s engagement in LNG shipping is particularly noteworthy, given Europe’s growing reliance on LNG imports to supplement its energy needs. The company’s modern, high-specification fleet is capable of supporting Europe’s demand for cleaner energy sources, aligning with the continent’s environmental goals and energy security strategies.
Capital Product Partners offers a gateway into the maritime logistics essential for the global energy trade. The company’s operational focus and strategic asset base place it at the heart of Europe’s energy diversification and security efforts, highlighting CPLP as an attractive investment opportunity in the burgeoning sector of energy logistics and transportation.
Sempra Energy (NYSE:SRE), a leading North American energy infrastructure company, has the potential to significantly impact Europe’s energy sector through its involvement in LNG and renewable energy projects. Sempra’s strategic investments in LNG export facilities, such as the Cameron LNG project in Louisiana, position it to supply LNG to European countries seeking to diversify their energy sources and reduce dependency on traditional suppliers.
Furthermore, Sempra’s commitment to sustainability and renewable energy initiatives could align with Europe’s ambitious green energy targets. The company’s expertise and investments in renewable energy infrastructure, including wind and solar projects, could foster collaboration with European partners, supporting the continent’s transition to a more sustainable energy system.
Investors looking at Sempra Energy can anticipate a company poised to leverage its LNG and renewable energy capabilities in response to Europe’s evolving energy landscape. Sempra’s strategic assets and commitment to clean energy underscore its potential to contribute to Europe’s energy security and sustainability goals, making it an appealing investment for those focused on the future of global energy markets.
By. Michael Kern
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
Forward-Looking Statements
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that large oil and gas companies will continue to focus on offshore natural gas resources; that domestic onshore natural gas assets in Europe will provide a more affordable energy source than offshore resources; that demand for natural gas will continue to increase in Europe and Germany; that Russia will not supply the majority of natural gas in Germany and Europe; that natural gas will continue to be utilized as a main energy source in Germany and other European countries and demand for natural gas, and in particular domestic natural gas, will continue and increase in the future; that MCF Energy Ltd. (the “Company”) can replicate the previous success of its key investors and management in developing and selling valuable energy assets; that the natural gas projects of the Company will be successfully tested and developed; that the Company can develop and supply a safe, domestic source of energy to European countries; that natural gas will be reclassified as sustainable energy which will support the development of the Company’s assets; that imports of liquified natural gas will not be sustainable for Europe and that European countries will need to rely on domestic sources of natural gas; that the Company expects to obtain significant attention due to its upcoming drilling plans combined with Europe desperate for domestic natural gas supply; that the upcoming drilling on the Company’s projects will be successful; that the Company’s projects will contain commercial amounts of natural gas; that the Company can finance ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that large oil and gas companies will start focusing on the development of domestic natural gas resources; that the natural gas resources of competitors will be more successful or obtain a greater share of market supply; that offshore liquified natural gas assets will be favored over domestic resources for various reasons; that alternative technologies will replace natural gas as a mainstream energy source in Europe and elsewhere; that demand for natural gas will not continue to increase as expected for various reasons, including climate change and emerging technologies; that political changes will result in Russia or other countries providing natural gas supplies in future; that the Company may fail to replicate the previous success of its key investors and management in developing and selling valuable energy assets; that the natural gas projects of the Company may fail to be successfully tested and developed; that the Company’s projects may not contain commercial amounts of natural gas; that the Company may be unable to develop and supply a safe, domestic source of energy to European countries; that natural gas may not be reclassified as sustainable energy or may be replaced by other energy sources; that the upcoming drilling on the Company’s projects may be unsuccessful or may be less positive than expected; that the Company’s projects may not contain commercial amounts of natural gas; that the Company may be unable to finance its ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated; that the Company may be unable to finance its ongoing operations and development; that the business of the Company may be unsuccessful for various reasons. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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