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There has been a rising interest in natural gas penny stocks as investors seek to take advantage of profit-netting commodities. Natural gas prices have gone up recently outside the U.S., and the country has been looking to export its booming reserves to emerging markets like China and India, where there is ever more demand for natural gas.
Small cap stocks in the natural gas industry are exploiting this opportunity by exploring more wells and increasing production capacities. Analysts predict natural gas prices to go even higher on geopolitical turmoil, making these stocks lucrative options for investors looking in the long-term.
We've identified three natural gas penny stocks to watch in 2014 that have potential for growth – and a huge upside for investors…
Three Natural Gas Penny Stocks to Watch
North America Oil & Gas Corp. (NAMG)
North America Oil & Gas is a development-stage public company that explores, exploits, and develops oil and gas projects primarily in California. NAMG does the exploration-portion of its business through Lani, a subsidiary with projects in California's San Joaquin Basin.
On March 28, the company entered into an investment deal with Beaufort PLC that's worth $5 million, with the aim of boosting development, assets, and ultimately NAMG's bottom line.
"This equity investment provides NAMG with the capital to execute on its business plan of drilling wells, acquiring new acreage and pursuing new play concepts aggressively," NAMG President and CEO Robert Rosenthal stated in a press release about the deal. "Beaufort's support and investment allows maximum flexibility for NAMG to allocate its capital effectively and pursue its business objectives."
NAMG stock took a dive in the beginning of 2014, plummeting over 65% to $0.145 per share. The drop means investors who see an upside to the company's deal with Beaufort could get in now, at a significantly discounted price.
Transportadora de Gas del Sur SA (NYSE: TGS)
Transportadora de Gas del Sur SA is an Argentinean company that was incorporated in 1992. The company transports natural gas and it also produces and commercializes natural gas liquids. Its activities are focused in Argentina, where it delivers more than 60% of the country's gas. It has more than 5 million consumers in Argentina, including residents in Buenos Aires.
The rise in global natural gas prices makes this small cap stock a lucrative prospect. It's invested in a lot of infrastructure with over 4,744 miles of pipeline, giving it an edge over other gas companies. The company's pipeline system connects the western and southern parts of the country where there are several gas consumers.
TGS stock costs $2.40 per share. Shares are up 10.6% so far in 2014, and 17.65% just in the last month.
Petron Energy II Inc. (PEII)
Petron Energy acquires, develops, and explores for the production and sale of gas liquids, gas, and oil within Oklahoma and Texas.
PEII's significant assets evidence that it has a strong foothold in the natural gas sector. It has a 75% stake in about 2,600 acres, which contain over 55 wells in Oklahoma, and additionally owns two gas transporting systems. The company leases some of its acres and to be more cost-efficient and bring in significant revenue.
Petron Energy falls on our natural gas penny stocks to watch list because of its track record for effective strategies – the company acquires assets in areas that have been proven and have numerous pay zones. It has also identified ways to manage its development costs and exploits technology to enhance production.
PEII stock currently sits at $0.0021 per share. It's down 16% in 2014, but has posted a 5% gain over the last month.