6. CARBO Ceramics Inc. (NYSE:CRR): The world’s largest supplier of ceramic proppant used in the fracking of deep oil and gas wells. Whereas C&J Energy Services Inc (NYSE:CJES) and Halliburton Company (NYSE:HAL) provide the equipment, CARBO Ceramics Inc. (NYSE:CRR) is a leading provider of the chemicals used by the equipment to complete the process. The company also provides resin-coated sand, which is a cheaper option than the ceramic proppant used in the industry. Last year, the company generated over $625.7 million in sales and had a net income of around $130 million, or $5.62 per share; just over 20% of the company’s sales were to international markets, although competition in the United States has recently taken a toll on the stock.
7. Kinder Morgan Inc (NYSE:KMI): The best-positioned pipeline operator providing transportation solutions to the fracking industry. With about 37,000 miles of pipeline and 180 terminals, the company was already one of the largest pipeline operators in the U.S. before buying El Paso LLC (NYSE:EP) for $38 billion. El Paso LLC (NYSE:EP) is the largest natural gas midstream operator in North America with 67,000 miles of pipeline. Meanwhile, new pipeline coming online to service the major shale plays will likely need to interface with the company’s network, enabling it to capitalize on the fracking boom in many ways [see also MLPs Are Getting Crushed].
8. Cheniere Energy, Inc. (NYSEAMEX:LNG): A premier play on liquid natural gas (LNG) and a potentially important player in LNG exporting. With Cheniere Energy, Inc. (NYSEAMEX:LNG) increasing at a 6% annual rate and the U.S. positioned as a key exporter, the company is well-positioned to benefit with its 89.3% ownership interest in the Sabine Pass Cheniere Energy, Inc. (NYSEAMEX:LNG) receiving terminal in Louisiana and the Creole Trail Pipeline that connects with it. So far, the firm hasn’t generated a profit with the terminal being used for imports, but exports are slated to begin by 2015 and could generate significant revenues, particularly as the government has limited the number of export permits issued.
9. Heckmann Corporation (NYSE:HEK): A total water solution provider for shale or unconventional oil and gas exploration, capitalizing on the wastewater generated by fracking activity. The company’s suite of services includes water delivery, disposal, trucking, fluids handling, treatment, and temporary and permanent pipeline facilities, as well as water infrastructure services. With a market capitalization of more than $500 million, Heckmann Corporation (NYSE:HEK) offers investors a strong play on the water management services for the fracking industry, although it reported a net loss of around $23 million in 2011.
10. Canyon Services Group Inc. (TSE:FRC): A Canadian company providing specialized stimulation services to oil and gas companies in the Western Canadian Sedimentary Basin. The company’s capacity has already grown from 38,000 hydraulic horsepower in 2010 to 225,000 hydraulic horsepower planned by the end of 2012. Investors looking for an investment outside of U.S. borders may want to consider this $600 million Canadian fracking company, with its modest 7-times price-earnings ratio and 6% dividend yield.
This article was originally written by Justin Kuepper, and posted on CommodityHQ.
