The post Upstream Natural Gas Valuations: A Big Year appeared on BitcoinEthereumNews.com.

The electron precedes the molecule or so the saying goes. Well, that is not really an axiom to my knowledge, but it does seem to fit. Amid the uncertainty in oil markets, for the past year or so, optimism and valuation metrics for natural gas producers have steadily been rising. According to data from Mercer Capital’s quarterly Value Focus: Exploration and Production, reports whereas a year ago show cash flow multiples (or sometimes referred to as EBITDAX in the oil and gas industry) for both oil and gas producers tended to centralize around four (4) to five (5) times, lately, publicly traded gas producers have EBITDAX multiples in the low- to mid-teens, while predominately oil producing companies’ multiples have dropped. Oil & Gas EV/EBITDAX Multiples Q1 2024-Q1 2025 Mercer Capital This has been a dramatic change in the past year compared to the industry’s history. While onshore producers of oil and gas have many similar operational and economic traits, such as the shrinking inventory of top tier wells, this decoupling is representative of a fundamentally different outlook for the future of each commodity. Demand: Record Gas Demand Is Headed For More Gas has a bright future as a commodity as one of its key consumption outlets, electricity, is at an all-time high and is growing. The EIA reported a few weeks ago that after decades of relatively flat electricity demand, the desire for more current, volts, and ohms will be required for commercial growth, onshoring of manufacturing, and, of course, data centers that fuel A.I. Much of this is anticipated to be in other forms such as solar, but natural gas will be a part of this equation with 4.4 gigawatts of new natural gas-fired capacity to be built in 2025. U.S. Electricity Consumption 1990-2026 EIA This is not short…

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Filed under: News - @ May 30, 2025 9:23 pm