EnCana Corporation (USA) (ECA), PAA Natural Gas Storage, L.P. (PNG): Profiting from North America’s Resource Renaissance

While the global economy remains unstable , the oil and natural gas sector in the United States continues to boom. Using a combination of advanced techniques and technologies, cutting-edge companies are now extracting oil and natural gas from previously untapped resources. Much of the oil and natural gas is extracted through new techniques, such as fracking, and from new sources, such as shale. This has created unique opportunities for niche firms to expand their businesses, and has also created numerous investment opportunities for savvy investors as well.

With oil supplies slowly dwindling in the Middle East and elsewhere, oil and gas companies have been looking for new sources of fossil fuels. The United States and Canada both have vast deposits of oil and natural gas, but much of it is contained in shale and until recently has been too expensive to extract. Rising oil prices in combination with declining production costs, however, have made shale oils far more attractive. At the same time, natural gas has been largely overlooked due to transportation costs, but new technologies are making it easier to ship.

Oil and gas companies stand to benefit the most as the boom continues, and investors can tap into this growth by investing in the rapidly expanding companies that are supporting the boom. With energy demand likely to continue to increase across the globe, even if the economy slows, the oil and gas industry may offer some of the safest investment opportunities. All investments carry risk, of course, but this article will outline some companies worth watching.

One favorite pick is EnCana Corporation (USA) (NYSE:ECA). This multi-sector company is involved in both oil and natural gas. Its stock has remained somewhat suppressed in recent weeks as natural gas has flooded the market and suppressed prices. Still, energy demand is likely to trend upwards over the long haul, especially as the global economy continues to build momentum. While the company does have $7.73 billion in debt, it still has nearly $3 billion in cash on hand. Furthermore, with revenues of over $4 billion and gross profits of $2.79 billion, the company should face few financial difficulties in the future. EnCana Corporation (USA) (NYSE:ECA) also pays a small dividend (about 20 cents) and is launching a share buy-back program. This suggests that EnCana Corporation (USA) (NYSE:ECA)’s management believes that the company is currently undervalued.