The Energy Bull Market is Here: Analyst Eric Nuttall on Riding the Wave
The energy sector is poised for a significant multi-year bull market, according to Eric Nuttall, Senior Portfolio Manager at Ninepoint Partners. Nuttall’s recent analysis points to a confluence of factors – peaking U.S. shale production, constrained OPEC supply, and surging demand from LNG and data centers – that are setting the stage for higher prices and substantial gains for select energy stocks.
The Shale Revolution’s Unexpected Legacy
For over a decade, the U.S. shale boom masked underlying vulnerabilities in global oil supply. This abundance led to underinvestment in traditional exploration, offshore development, and maintaining robust inventory levels. Now, Nuttall argues, the shale era is effectively over as a primary source of incremental supply. Between 2010 and 2025, U.S. shale accounted for a staggering 117% of non-OPEC oil production growth. Its decline leaves a significant void.
“The world lulled itself into a false sense of security,” explains Nuttall. “We’re now waking up to the reality that the single largest source of incremental supply over the past 13 years is gone. A ‘post-shale world’ simply can’t function on $50, $60, or even $70 oil.”
Natural Gas: Fueled by LNG and the Data Center Boom
While a warm start to the year briefly dampened natural gas prices, Nuttall remains firmly bullish. The key driver isn’t short-term weather patterns, but the exponential growth in Liquefied Natural Gas (LNG) demand, particularly from the U.S. Gulf Coast. This region is projected to be a net gas importer by 2030.
Adding to this demand is the burgeoning power needs of data centers. The artificial intelligence (AI) revolution is driving massive investment in data infrastructure, which is heavily reliant on electricity, and increasingly, natural gas. Nuttall believes a marginal cost of supply around $4 per thousand cubic feet (mcf) will be necessary to incentivize drilling and prevent a deepening deficit.
Nuttall’s Top Picks for the Energy Bull Run
Based on his analysis, Nuttall has identified three key stocks poised to benefit from the unfolding energy bull market:
Expand Energy (EXE NASDAQ) – The Natural Gas Powerhouse
Expand Energy is North America’s largest natural gas producer, controlling approximately 6.3% of U.S. production. Its strategic positioning near key demand centers – AI hubs in Texas and LNG facilities on the Gulf Coast – allows it to command premium pricing. Nuttall highlights the company’s 20+ years of “stay-flat” inventory, meaning consistent production costs over time. At a gas price of $4/mcf, the stock boasts a 14% free cash flow yield and a potential upside to $209 per share.
EQT Energy (EQT NYSE) – Infrastructure and Scale
EQT Energy, the second-largest natural gas producer in the U.S., benefits from owning its own gas infrastructure, providing a significant cost advantage. Its inclusion in the S&P 500 also broadens its investor base. With over 20 years of high-quality inventory and exposure to increasing power demand, EQT is currently undervalued at 6.0x EV/CF and a 12% free cash flow yield (at $4 gas). Nuttall’s target price is $75, representing a 46% potential upside.
Antero Resources (AR NYSE) – High Leverage to Gas Prices
Antero Resources, a major player in the Marcellus Shale, recently expanded its inventory through a private acquisition. While this acquisition temporarily impacts shareholder returns, the stock offers significant leverage to rising natural gas prices. Trading at 4.0 times 2027 cashflow and a 15% free cashflow yield (at $4 NYMEX gas), Nuttall sees fair value at $62, a potential 88% upside.
Did you know? The demand for electricity from data centers is projected to more than double by 2030, significantly increasing the need for natural gas-fired power generation.
Looking Back: Nuttall’s Past Picks and Their Performance
Nuttall’s track record speaks for itself. His previous recommendations, made on March 11, 2025, have yielded impressive returns:
- Meg Energy (MEG TSX) – Acquired by Cenovus, delivering a 35% return.
- Athabasca Oil (ATH TSX) – A strong 47% return.
- Arc Resources (ARX TSX) – A modest -1% return, but a 2% total return.
The average total return across these three picks was a robust 28%.
Pro Tip:
When evaluating energy stocks, pay close attention to free cash flow yield. A high yield indicates the company is generating significant cash relative to its market capitalization, potentially signaling undervaluation.
FAQ: Navigating the Energy Market
- What is the biggest risk to the energy bull market? A significant economic recession that drastically reduces global demand.
- How does OPEC influence oil prices? OPEC controls a substantial portion of global oil supply and can adjust production levels to influence prices.
- Is natural gas a good long-term investment? With the growth of LNG exports and data center demand, natural gas is expected to remain a crucial energy source for decades to come.
- What is EV/CF? Enterprise Value to Cash Flow is a valuation metric that compares a company’s total value to its cash flow.
Explore further: U.S. Energy Information Administration provides comprehensive data and analysis on energy markets.
What are your thoughts on the future of energy? Share your insights in the comments below!
