Investment inflows into technology and stay-at-home stocks are shifting toward commodity and reopening stocks.
On Wednesday, May 26th, 2021, the Hague Court ordered Shell to cut its emissions by 45% within the next 10 years. This decision, in combination with shareholder votes and board changes at Exxon Mobil Corporation and Chevron Corporation, suggest climate activists are winning their war against fossil fuels. This court ruling will force Royal Dutch Shell PLC to slash at least a million barrels of oil and gas from its fossil fuel production every day, at a cost of several billion dollars a year.
These developments may present a silver lining for natural gas stocks. Natural gas, a clean fossil fuel, can fill the power gap between worldwide energy demand and the relative inefficiencies of solar and wind alternatives. Natural gas may be critical to keep “the lights on” while cleaner alternatives are deployed over the coming decades.
Client holdings, Antero Resources, Inc. (AR) and Antero Midstream, Inc. (AM) which rallied last year 13 x and 5 x off their March lows are, when combined, one of the most integrated natural gas producers in the United States and still attractive investments benefitting from global natural gas growth. In addition, we are adding to Tellurian, Inc. (TELL) to client portfolios. TELL is an emerging global LNG distributor founded by Charif Souki the Co-founder and former CEO of Cheniere Energy, Inc. (LNG). This week, Tellurian, Inc. announced a 10 year agreement with Gunvor Group for 3 mm tonnes per annum MTPA of LNG that company presentations report are worth $12 billion in revenues over the next decade.