Q: With the decline in oil and natural gas prices would like your opinion on the future of these holdings. Down a fair bit at these prices. Is their upside if the lng expansion begins shipments?
5i Research Answer:
ARX and BIR are more 'gassy' than BTE, which may give them more torque if the natural gas sector benefits from LNG. The whole sector has been hit hard, with concern on growth, China, and recession. BTE and ARX are very cheap on valuation. Their balance sheets are OK. Some growth is still expected in 2025. There is upside IF commodity prices move up. But economics and weather are still going to likely play more of a role than LNG plants, in the next few years at least. We would consider these stocks OK overall, but it is a highly cyclical industry and some patience is going to be required, certainly.