Want further proof that an oil and natural gas boom is
looming? Simply scan the list of recent IPOs.
Seven of the last nine companies to go public on U.S.
exchanges were energy companies. Two others went public in late
, a Texas-based gatherer, processor and transporter of natural
gas, became the latest energy IPO, pricing at $20 a share
So far, the returns among all the new publicly traded energy
companies have been stellar. All but one of the nine energy
companies that have gone public since September 19 are currently
trading above their IPO prices.
What does that tell us? Two things, really:
- That energy companies are feeling emboldened enough by the
growth prospects in the oil and gas industries to take the leap
of faith that investors will want to own shares of their
- That investors are indeed snatching up new energy stocks,
and are seemingly very willing to take a flier on a sector well
positioned for major growth.
I'm not suggesting you should do the same.
is always risky, and you'd probably be better off spending your
money on more mature energy companies like
What I am saying is that the glut of energy IPOs is yet
another sign that the sector is poised for some serious growth.
And the returns suggest that many investors agree.
The IPO market isn't the only harbinger of the impending
energy boom. Recent mergers and acquisitions are another good
Exxon just paid $2.9 billion for Calgary-based Celtic
Exploration, giving it access to the oil and natural-gas
producer's myriad shale-gas fields.
Linn Energy (
an independent oil and natural gas company that went public last
interest in Wyoming's Jonah fields for a cool $1 billion.
You get the point. Improved extraction technologies have
helped create a surplus of shale oil and natural gas, which has
allowed energy companies to buy those resources on the cheap.
Eventually, however, demand is sure to catch up with supply.
Our global dependence on oil and gas is showing no signs of
waning. And as demand rises, so too will oil and
natural gas prices
That makes this an ideal time to invest in oil and natural
As if the logjam of energy IPOs and high-priced takeovers
isn't proof enough.