Morningstar: The Aussie firms in the Asian pipelineFrancisca Thomsen
Increased demand for gas in Asia could create investment opportunities with two Australian energy companies, according to Morningstar research, especially as US energy prices are expected to rise.
Mathew Hodge, Senior Equity Analyst at Morningstar highlights two Australian energy low-cost companies with high margins: Woodside Petroleum and Santos.
Mathew Hodge and Mark Taylor have written a report on energy stocks and the effects of strong demand for gas from Asia. They conclude that Woodside and Santos are best placed to meet that demand. Mathew Hodge and Mark Taylor predict gas prices in the U.S will rise, making it more difficult to compete with other global producers.
Mathew Hodge believes that from a shareholder’s point of view, Woodside offers a good dividend. Santos has two large projects under construction: a gas development project in Papua New Guinea, which has started producing and Gladstone, a liquefied natural gas project due to start producing next year. Mathew Hodge believes that because capital costs are dropping off, Santos shareholders should expect a rise of both dividends and earnings.