Wow! Natural Gas Hits 10-Month High

Shares of Encana (NYSE:ECA) trekked up over 7 percent in the five trading days beginning October 15. Speculation has been mounting that oil and gas giant Exxon Mobil (NYSE:XOM) could buy the Canadian company, a dense natural-gas dessert following the acquisition of Celtic Exploration.

Exxon Mobil announced its $3.1 billion deal with Celtic Exploration on Wednesday. Exxon Mobil will be claiming 545,000 net acres in the liquids-rich Montney shale, and 104,000 net acres in the Duvernay shale, which currently produces 72 million cubic feet of gas and 4,000 barrels of crude per day, if the deal goes through.

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The company has been making pretty aggressive natural gas plays recently, acquiring 845,000 acres of new fields in the past month alone. With Encana reportedly seeking a partner to help develop its holdings in the Duvernay shale, a deal is expected with somebody by the end of the year.

Futures for natural gas are up against 10-month highs — $3.60/MMBtu for November and $3.91/MMBTU for December — as Winter demand looms. Demand from power plants was up 16 percent in July and is on track for as much as 14 percent year-on-year gains.

Exxon Mobile isn’t the only company making moves. There are nebulous indications that ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX) could be eyeing Poland for future development.

Royal Dutch Shell (NYSE:RDSA)(NYSE:RDSB) is also reportedly interested in gas reserves in Africa.

“East Africa is going to be a big province for LNG. We think they still need a company that can develop LNG and the associated shipping and marketing,” said Shell’s exploration chief Andy Brown in an interview with Fox Business.

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