Finish Off a Great Year for Natural Gas with Tellurian


The natural gas market has been on fire in 2021 and, as you would expect, this has benefited Tellurian (NASDAQ:TELL). By simply holding TELL stock so far this year, traders could have doubled their investment or more. This pick is up over 190% year-to-date (YTD).

Stocks to buy: a gas pipe with the sun going down in the background
Source: Shutterstock

Basically, investing in TELL shares is a way to get convenient and inexpensive exposure to the natural gas industry. After all, not everybody wants to get involved in the volatile futures market.

Tellurian specializes in liquid natural gas (LNG) and the company’s first project is known as Driftwood LNG. Impressively, the company is responsible for “more than 15% of all LNG in production today.”

What’s more, lately there’s been very strong demand for natural gas, along with a tight global supply. It has gotten to the point where the White House is practically begging producers to step up to the plate. Now Tellurian is well-positioned to help fill the gap.

TELL Stock at a Glance

Before anything else in this article, we should first look at the jaw-dropping price action of natural gas futures in 2021. The futures contract price for natural gas started at around $2.52 at the beginning of the year. By Oct. 22, the per-contract price had catapulted to $5.28.

My point? If the trend truly is “your friend” as the saying goes, then natural gas has been among the friendliest commodities available.

Next, though, let’s focus on TELL stock. The share price started 2021 at $1.28, but has since zoomed to $3.56 as of Oct. 22.

As you can see, there isn’t a perfect one-to-one correspondence here. Percentage-wise, Tellurian shares moved faster than the natural gas futures contracts did.

That’s the appeal of low-priced penny stocks; they can provide fast action and outsized gains. However, investors should still be cautious and use small position sizes in this category. These picks are also capable of drawing down quickly.

By the way, TELL’s 52-week high right now? Back in June, the name hit $5.76. Therefore, Tellurian appears to have room to run higher, even after its outstanding YTD gains.

Export More, Please

Recently, White House Press Secretary Jen Psaki said the following:

“There’s a natural gas shortage around the world, hence the need for the United States to continue to export natural gas.”

Psaki stated what’s been obvious to commodities traders for months. Yet, the statement is really more of a call to action than a mere statement of fact.

As Europe, China and other world regions brace for what may be a bitterly cold winter, the demand for LNG could be record-shattering. But Tellurian is ready and willing to do its part in addressing that demand.

How do we know? Because the company said so, in a tweet directly responding to Psaki’s proclamation.

Indeed — we’re working hard and smart on Driftwood #LNG !”

This tweet also included an American flag emoji. All told, Tellurian seems committed to contributing to the nation’s LNG output.

Tripling the Production

To help increase its production output, Tellurian’s strategy has two parts. The first part is the most obvious: more drilling.

Focusing on the Haynesville shale natural gas formation — which runs across northwest Louisiana and east Texas — Tellurian plans to drill 13 wells in the region next year. Moreover, Tellurian reportedly expects to have around 100 million cubic feet per day (MMcf/d) of LNG output by the end of 2021. That’s “three times the volume” that it was producing at the end of 2020.

So, the second part of Tellurian’s strategy? To target acquisitions in the energy space. John Howie, executive vice president of upstream at Tellurian, noted the following:

“We’re continuously in the market for companies to acquire, looking for acreage to lease and looking for people to partner with.”

Both of these activities help build a promising case for TELL stock.

The Takeaway on TELL Stock

As we head into the final months of 2021, it will be interesting to find out more about Tellurian’s possible acquisitions. And in the meantime, the company will be drilling aggressively for some much-needed LNG.

It already seems like the U.S. government wants companies like Tellurian to help address the global natural gas shortage. So, this name clearly stands to gain — and so do TELL stock shareholders.

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On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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