Energy companies have just started to post first-quarter 2025 results, with Kinder Morgan, Inc. KMI having already reported. In the earnings release and transcript, KMI highlighted that natural gas demand will keep growing strongly in the United States and globally. So, what’s the cleanest, most focused investment to ride the natural gas demand trend? Are Range Resources Corporation RRC and Antero Resources Corporation AR well-positioned to capitalize on the rising demand for natural gas?
KMI's earnings call transcript for the first quarter of 2025 expressed optimism regarding natural gas demand. The midstream energy player stated that from 60 billion cubic feet per day (Bcf/D) in 2005, natural gas demand in the United States surged to 109 Bcf/D in 2024, indicating a substantial increase of 80% over the two-decade period. Kinder Morgan expects natural gas demand in the domestic market to increase by another 20 to 28 Bcf/D by the end of this decade. The prime reason for the growth is the rise in LNG exports, with Europe and Asia willing to import more gas from the United States.
Kinder Morgan also highlighted the increasing need for natural gas power plants with rising electricity consumption from data centers.
Improving demand for natural gas will thus be reflective of the higher price of the commodity. In its latest short-term energy outlook, the U.S. Energy Information Administration (EIA) estimated the average natural gas spot price for 2025 at $4.30 per million British thermal units (Btu), almost double than $2.20 per million Btu in 2024.
With the pricing environment of the commodity remaining favorable, incentives to explore and produce more of the commodity will rise. Thus, energy companies involved in exploring and producing natural gas are now in the spotlight as they will be able to sell their volumes at higher prices, thereby generating more cash flows for shareholders.
Range Resources
Range Resources is among the top 10 natural gas producers in the United States. In the natural gas-rich Appalachian basin, RRC has a strong footprint. Range Resources boasted that it has enough premium drilling locations in the prolific resource to keep producing gas for more than three decades. Thus, the handsome pricing environment of natural gas is highly beneficial for Range Resources. Notably, RRC, carrying a Zacks Rank #2 (Buy), is likely to see earnings growth of 30.4% when it reports first-quarter 2025 results on April 22.
Antero Resources
Antero Resources is among the top five natural gas and natural gas liquid producers in the United States. In the prolific Appalachian basin, Antero Resources also has a strong presence and claims it has sufficient high-quality drilling locations in this prolific region to sustain gas production for over two decades. With a solid production outlook, #2 Ranked AR is thus well poised to capitalize on rising commodity prices. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Range Resources Corporation (RRC) : Free Stock Analysis Report
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
Antero Resources Corporation (AR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.