Energy Transfer LP (NYSE:ET) ranks among the best stocks under $25 to buy now. On December 15, RBC Capital reaffirmed coverage of Energy Transfer LP (NYSE:ET) with an Outperform rating and a $22 price target. The firm adjusted its model in response to the company’s recent earnings reports, the completion of SUN’s acquisition of Parkland, and USAC’s planned acquisition of J-W Power. The company’s adjusted EBITDA reached $3.84 billion, compared to $3.96 billion in the previous year. Distributable cash flow ...

Industry Overview - Companies in the Zacks Oil and Gas – Production Pipeline sector are crucial for meeting increasing global energy demand by supplying crude oil and natural gas, which are essential for transportation, industrial activities, and households [1] - Their operations enhance energy security, support economic growth, and provide necessary feedstocks for petrochemicals and fertilizers, while also advancing cleaner technologies and carbon-reduction initiatives [1] Company Profiles Energy Transfer LP (ET) - Energy Transfer has a diversified midstream network across natural gas, natural gas liquids (NGLs), crude oil, and refined products, benefiting from stable, fee-based cash flows and strategic access to export terminals [3] - The company is positioned to capture growth from rising U.S. energy production and global demand, with an attractive distribution yield and ongoing balance sheet strengthening through deleveraging [3] - The Zacks Consensus Estimate for ET's earnings per unit indicates year-over-year growth of 3.91% in 2025 and 15.25% in 2026, with long-term earnings growth per share projected at 12.45% [6] ONEOK Inc. (OKE) - ONEOK has a strong investment case due to its extensive NGL infrastructure and strategically positioned pipeline network across major U.S. energy basins, supported by stable, fee-based cash flows and limited commodity exposure [4] - The company is expected to achieve earnings visibility and offers an attractive dividend, with long-term growth driven by reliable income and moderate growth in the midstream energy sector [4] - The Zacks Consensus Estimate for OKE's earnings per unit implies year-over-year growth of 3.48% in 2025 and 9.48% in 2026, with long-term earnings growth per share pegged at 3.06% [9] Financial Metrics - OKE's sales are projected to rise 17.97% in 2026, while ET's sales growth is forecasted at 26.64% for the same period [7][11] - OKE has a higher return on equity (ROE) of 15.12%, surpassing ET's 10.71% and the industry average of 13.28% [13] - ET's current long-term debt-to-capital ratio is 58.87%, slightly lower than OKE's 59.08% [16] Valuation and Price Performance - Energy Transfer is currently trading at a forward 12-month Price/Earnings (P/E) ratio of 10.77X, while ONEOK is at 12.61X, compared to the industry average of 12.23X, indicating ET is trading at a discount [17] - In the past three months, ET's units have declined by 0.7%, while OKE has gained 2.7%, outperforming the sector's overall gain of 1.4% [18] Conclusion - ONEOK's stronger projected sales growth, higher return on equity, and superior price performance, despite a marginally higher reliance on debt compared to ET, suggest it has a competitive advantage [20]

Core Viewpoint - Energy Transfer is well-positioned to capitalize on the growing demand for natural gas, offering an attractive 8% dividend yield despite a year-to-date stock decline of 16% [3][11]. Industry Overview - U.S. natural gas production is increasing, driven by advancements in shale development and drilling technologies, making the U.S. the world's largest natural gas producer [1][7]. - The expansion of data centers, manufacturing, and infrastructure projects is accelerating, with technology companies favoring natural gas for its reliability and cleaner-burning properties [2]. Company Positioning - Energy Transfer operates over 140,000 miles of pipelines in the U.S., serving as a critical midstream player in the oil and gas industry [4]. - The company generates approximately 90% of its earnings from fee-based contracts, providing stability against price volatility in crude oil and natural gas [5][6]. Growth Initiatives - Energy Transfer has secured long-term agreements with Oracle to supply natural gas to three U.S. data centers, enhancing its domestic positioning [8]. - The company has contracted over 6 billion cubic feet per day of pipeline capacity with demand-pull customers, projected to generate over $25 billion in transportation fee revenue [9]. - A major project to expand the Transwestern Pipeline is underway, which will increase natural gas supply to Arizona and New Mexico, with an expected cost of approximately $5.3 billion [10]. Investment Considerations - Energy Transfer is classified as a master limited partnership (MLP), allowing it to offer appealing yields, making it attractive for income-focused investors [11][13]. - The company is expanding its footprint and securing more contracts, reinforcing its position as a solid energy stock [13].

Core Insights - The Williams Companies, Inc. (NYSE:WMB) is recognized as one of the 9 hot energy stocks to buy, having received crucial regulatory licenses for its Northeast Supply Enhancement (NESE) project from New Jersey and New York environmental authorities [1][2] Project Developments - The NESE project aims to enhance energy stability in New York City by increasing natural gas supply and replacing high-emitting fuel oil, with an expected investment of over $1 billion and long-term benefits for New York energy users [2] - The Constitution Pipeline project in upstate New York is also progressing, projected to create approximately 2,000 jobs annually over 15 years and save up to $11.6 billion by reducing natural gas prices in the Northeast [3] Market Analysis - TD Cowen has raised its price target for The Williams Companies, Inc. to $70 from $69, maintaining a Buy rating, following the company's historical 9% EBITDA CAGR mention, although there are questions about future performance at the upcoming February Investor Day [4]

Group 1 - Coterra Energy Inc. (NYSE:CTRA) is recognized as one of the 9 hot energy stocks to buy, with UBS raising its price target from $29 to $32 while maintaining a Buy rating due to improved capital efficiency in 2026 estimates [1] - The company anticipates significantly lower capital expenditures year-over-year, while achieving a 0-5% annual increase in BOE and natural gas output, alongside approximately 5% annual growth in oil production [2] - Coterra's cash return yield forecast of 11.5% for 2026 indicates a strong commitment to financial success, with detailed 2026 guidance expected to be published in February [2] Group 2 - Coterra Energy has attracted the attention of activist investors due to concerns regarding capital allocation and corporate governance, which are impacting the company's valuation [3] - The company is focused on the development, exploration, and production of oil, natural gas, and natural gas liquids (NGLs) within the continental United States [3]

Summary of J.P. Morgan Oil Outlook 2026/2027 Industry Overview - The report focuses on the global oil industry, specifically analyzing supply and demand dynamics, price forecasts, and production trends for the years 2026 and 2027 [2][3][72]. Key Points Oil Demand and Supply Dynamics - Global oil demand is projected to grow robustly, increasing by 0.9 million barrels per day (mbd) in 2025 to reach 105.5 mbd, with further acceleration to 1.2 mbd in 2027 [2][72]. - In contrast, global oil supply is expected to expand at three times the rate of demand in 2025 and 2026, leading to a significant surplus [2][72]. - Non-OPEC+ producers will drive half of the supply gains, particularly through offshore developments and shale production [2][72]. Offshore and Shale Production - The offshore sector is anticipated to contribute 0.5 mbd of growth in 2025, increasing to 0.9 mbd in 2026 and 0.4 mbd in 2027, benefiting from low costs and high visibility on new projects [2][72]. - Global shale production is projected to rise by 0.8 mbd in 2025, with further increases of 0.4 mbd in 2026 and 0.5 mbd in 2027, despite a slowdown in U.S. shale growth [2][72]. Inventory and Price Forecasts - Global observable inventories have surged by 1.5 mbd, primarily driven by oil-on-water and stocks in China, contributing to a projected surplus of 2.8 mbd in 2026 [2][72]. - Brent prices are expected to decline below $60 in 2026 and average $42 in 2027, with prices potentially sliding into the $30s by year-end [2][72][24]. Refining Margins - Refining margins are expected to remain elevated, with gasoline cracks averaging $18/bbl and diesel cracks reaching $31/bbl in the U.S. for 2026 [4][72]. Market Adjustments - The report suggests that the market will find equilibrium through a combination of rising demand due to lower prices and a mix of voluntary and involuntary production cuts [2][45]. - A proactive approach to production cuts is recommended to stabilize prices before they decline significantly [27][45]. Geopolitical Factors - The report discusses potential geopolitical risks, including sanctions on Russian and Iranian oil exports, which could impact supply dynamics [26][61]. - Venezuela's political situation is highlighted as a potential upside risk to global oil supply, with the possibility of increased production following a regime change [61][66]. Non-OPEC Supply Growth - Non-OPEC supply is projected to rise by approximately 1.1 mbd in 2026, with significant contributions from the U.S., Brazil, Canada, Guyana, Argentina, and Norway [72][75]. - The offshore sector and shale production are identified as dual engines of growth for non-OPEC supply [72][75]. Conclusion - The overall outlook indicates a challenging environment for oil prices due to abundant supply and geopolitical uncertainties, with a need for strategic adjustments in production to maintain market stability [2][72][45].

Core Insights - Energy Transfer is capitalizing on the growing demand from U.S. data centers by leveraging its extensive pipeline network to secure new contracts and maintain strong project returns [1][3] - The company is currently involved in significant projects, including a collaboration with Oracle for data center facilities in Abilene, Texas, highlighting its role as a major energy supplier [2][3] Demand for Reliable Energy - The rise of hyperscale data centers, essential for artificial intelligence, necessitates highly reliable energy sources, with clients requiring "99.999% reliable power," which natural gas can provide [3] - Energy Transfer's pipeline network, spanning 140,000 miles, allows it to connect supply sources with high-demand locations, serving both tech companies and major utilities [3] Financial Performance and Strategy - Data center-related projects are expected to yield high returns, with smaller, high-margin laterals complementing main pipeline expansions, akin to a grocery store model [4] - Energy Transfer derives 40% of its earnings from natural gas, with ongoing infrastructure development to meet increasing demand, exemplified by the $5 billion Desert Southwest project projected to generate over $800 million in annual EBITDA [5] Diversification and Growth - The company controls 20% of global NGL exports, tapping into growing markets like Asia for plastics and feedstocks [6] - A disciplined capital allocation strategy is in place, with half of the distributable cash flow allocated to distributions and the other half funding strategic growth projects, aiming for a 3-5% annual increase in distributions [7] Investment Opportunities - Energy Transfer is included in both the Alerian MLP ETF (AMLP) and the Alerian Energy Infrastructure ETF (ENFR), providing investors with exposure to the midstream landscape [8]

Core Viewpoint - Enterprise Products Partners (EPD) offers a high dividend yield of 6.8%, making it attractive for dividend investors, but potential buyers should be aware of specific tax implications associated with its structure as a master limited partnership (MLP) [1][8]. Group 1: Industry Overview - Enterprise operates in the midstream energy sector, which involves the transportation and storage of oil and gas, positioned between upstream (exploration and production) and downstream (refining and marketing) [3][4]. - Midstream companies like Enterprise own critical infrastructure assets such as pipelines and storage facilities, allowing them to transport and store both unrefined and refined products [4]. Group 2: Revenue Generation - The company primarily focuses on natural gas liquids (NGLs) and owns an extensive network of pipelines and processing facilities in Texas and Louisiana, generating revenue by charging fees to upstream and downstream companies for using its infrastructure [5][6]. - Enterprise typically enters into long-term contracts with customers, ensuring a steady stream of recurring revenue, even if customers do not utilize the full capacity they have purchased [6]. Group 3: Tax Implications - As a master limited partnership (MLP), Enterprise can provide substantial dividends due to favorable tax treatment, as it distributes nearly all operating cash flow to shareholders [7]. - However, MLP income is reported on a K-1 form, which may complicate tax reporting, particularly for shares held in non-tax-advantaged accounts, necessitating awareness of specific tax requirements [8].

Core Insights - Peyto Exploration & Development Corp reported strong operating and financial results for Q3 2025, with production averaging 129.8 Mboe/d, an 8% increase year over year, despite a 1.5% decline from Q2 2025 due to wet weather and low natural gas prices [3][4][21] - The company plans a preliminary capital budget of $450 to $500 million for 2026, aiming to add 43,000 to 48,000 Boe/d of new production to offset a base production decline of 26-28% [4][23][25] Production and Financial Performance - Production volumes for Q3 2025 averaged 129,762 boe/d, with natural gas at 684.9 MMcf/d and NGLs at 15,611 bbls/d, reflecting an 8% increase year over year [4][5] - Funds from operations (FFO) reached $198.9 million, or $0.98 per diluted share, with free funds flow of $69.1 million for the quarter [4][5] - The realized natural gas price after hedging was $3.57/Mcf, significantly higher than the AECO 7A index, which averaged $0.94/GJ [4][10] Capital Expenditures and Drilling Activity - Total capital expenditures for Q3 2025 were $126.3 million, with 20 wells drilled and 18 brought on production [4][6][7] - The company has contracted a fifth rig to enhance drilling activity, focusing on prolific zones in the Notikewin, Falher, and Bluesky formations [6][7] Hedging and Market Diversification - Peyto's hedging strategy secured over $715 million in revenue for 2026, with a hedge position protecting approximately 450 MMcf/d of natural gas production at over $4/Mcf [4][10][15] - The company has diversified its market exposure, which contributed to a realized natural gas price significantly above the AECO benchmark [10][17] Financial Health and Debt Management - Net debt was reduced by $20.5 million in Q3 2025, totaling $1.22 billion at the end of the quarter, down from $1.36 billion a year earlier [4][5][46] - The company amended and extended its credit facilities, increasing the revolving credit facility to $1.05 billion and extending the maturity date to October 2029 [21][22] Future Outlook - Peyto remains optimistic about the natural gas market, anticipating increased demand driven by electrification and LNG exports [27][28] - The company plans to maintain a disciplined approach to capital expenditures and hedging to support shareholder returns and balance sheet strength [28][32]

Core Insights - Birchcliff Energy Ltd. reported strong Q3 2025 financial and operational results, with average production of 80,406 boe/d, adjusted funds flow of $87.1 million, and a quarterly cash dividend of $0.03 per share [1][2][35] Financial Performance - Average production increased by 7% from Q3 2024, driven by strong base production and new well performance [16] - Adjusted funds flow reached $87.1 million, a 93% increase year-over-year, with cash flow from operating activities at $78.5 million, up 19% [6][14] - Free funds flow was reported at $15.6 million, marking a significant recovery from a loss in the previous year [10][15] Production and Operational Highlights - Birchcliff's production guidance for 2025 has been raised to 79,000 to 80,000 boe/d, with Q4 2025 production expected to average approximately 81,500 boe/d [3][25] - The company drilled 9 wells and brought 6 on production in Q3 2025, with capital expenditures totaling $71.5 million [18][10] - Operating expenses were reduced to $2.71/boe, the lowest in company history, contributing to an operating netback of $11.15/boe, a 34% increase from Q3 2024 [6][9] Market Diversification and Pricing - Approximately 75% of Birchcliff's natural gas production realized higher U.S. pricing, leading to an effective average realized natural gas sales price of $3.36/Mcf, a 387% premium to AECO prices [20][22] - The company continues to benefit from market diversification, with significant exposure to the Dawn and NYMEX HH markets [22][24] Capital Allocation and Future Guidance - Birchcliff's preliminary capital budget for 2026 is set at $325 million to $375 million, targeting production growth to 81,000 to 84,000 boe/d [5][31] - The company plans to allocate approximately $300 million to $350 million for its Pouce Coupe and Gordondale assets, with a focus on maximizing production efficiency [5][31] - A formal announcement regarding the 2026 capital budget and updated five-year outlook is expected on January 20, 2026 [6][31]