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

Another good investment, PAA Natural Gas Storage, L.P. (NYSE:PNG), runs natural gas storage facilities in Louisiana, Mississippi and Michigan. As more natural gas is extracted, companies will have to turn to firms like PAA Natural Gas Storage, L.P.(NYSE:PNG) to find a place to keep it all. The company currently enjoys a trailing P/E of 21 and has seen its stock prices rise from $16.61 to as high as $23.10. While this growth is considerable, given overall market conditions, prices should continue to rise. The company does have a considerable amount of debt at just over $600 million, and quarterly revenue growth has exceeded 18% and is likely to continue to build momentum in the future.

If you’re looking for a bit more stability and a larger company, Apache Corporation (NYSE:APA) is definitely worth a look. Trading at about $82, the company cooled off of a 52 week high of nearly $95, largely due to a decline in natural gas prices. This drop in prices contributed to a 10% decline in revenues, which total $16.38 billion. As with many other oil and gas companies, Apache has been borrowing money to fuel its expansion and currently has $12.48 billion in debt on its balance sheets. Still, with a market cap of $32 billion, this debt is nothing worth fretting about.

There are several other companies worth examining, including Chesapeake Energy Corporation (NYSE:CHK) and EQT Midstream Partners LP (NYSE:EQM). With the oil and gas boom likely to continue, there should be numerous big winners over the next few years. Still, you should keep a close eye on company management and debt levels to make sure that overly zealous leaders are not overextending business operations. Also, even though gas prices are likely to rise over the coming years, in the short term prices could continue to drop. This might suppress share prices in the immediate future, but as demand for natural gas and oil begins to outstrip supply, prices will rise. If anything, a short-term decline in natural gas prices could create numerous value buys for investors who are willing to wait until prices rebound.

Colin Tweel has no position in any stocks mentioned. The Motley Fool owns shares of Apache.

The article Profiting from North America’s Resource Renaissance originally appeared on Fool.com.

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