Since the beginning of 2015, shares of 'wonder-stock' Liquefied Natural Gas Ltd (ASX: LNG) are up an incredible 47%, compared to a 9.5% return from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Click to enlarge. Source: Google Finance.
Whilst much of the company's gains so far this year can be put down to the positive movements around the oil price, the next three to six months will be vital for the company's share price.
Both of LNGL's subsidiaries in North America have important milestones to reach before mid-2015.
Magnolia LNG, located in Lake Louise, Louisiana USA, has previously said it'll reach financial close by mid-2015. That means, the proposed eight million tonnes per annum (8mtpa) LNG tolling facility will have to secure binding tolling agreements, pass regulatory hurdles and have a bankable EPC contract.
Further north in Nova Scotia, Canada, LNGL's Bear Head LNG facility is also being prepared for its important milestone come mid-2015. Originally proposed as an 8 mtpa facility, LNGL said yesterday Bear Head would now target an expansion to 12mtpa in 2024. Bear Head has filed an application to export gas from the US to its facility in Canada and has also applied for LNG exports to Free Trade Agreement (FTA) and Non-FTA countries.
Should you buy Liquefied Natural Gas shares?
Since I originally recommended readers buy LNGL a year ago, its share price is up an incredible 1,012%. However the sustainability of its gains and any future increases come down to management's ability to deliver on its promises in the coming six months. If it doesn't, the market may be merciless in selling off the stock. However if management can execute on its strategy, the shares will likely appear cheap today.
