Issue link: http://read.dmtmag.com/i/103862
oil and gas software has come a long way since 1993, when the developers of SimCity created SimRefinery for Chevron to use in training its employees. In addition to the sales created from being used directly in the production process, the oil and gas boom has created thousands upon thousands of newly affluent consumers who can now purchase Apple's products. A continuation of the boom will ensure even more consumers and further integration of Apple's products into oil and gas production. 5. Caterpillar (CAT) Caterpillar is in the unique position of manufacturing products that slot in to nearly every point in the chain of oil and gas production. Caterpillar's heavy construction equipment will be used to clear drill sites, construct pipelines and refineries and liquid natural gas (LNG) facilities, build ancillary facilities in oil boom towns and its engines will power essential components of production such as drills, wells, pumps, tugboats and ships. New equipment purchases and replacement of worn out equipment will further drive Caterpillar's sales. An additional catalyst for Caterpillar is the development work the company is performing on compressed natural gas (CNG) and LNG powered machinery. CNG and LNG engines promise to deliver the reliability of diesel equipment with significant reductions in fuel costs. The operating efficiency benefits of LNG and CNG heavy equipment could encourage operators to replace older machines earlier than normal. Regardless, Caterpillar's dominance of the heavy equipment industry places it in a position to benefit significantly from a continued oil and gas boom. 6. Flowserve (FLS) Flowserve designs, manufactures, distributes and services the numerous pumps, seals and valves necessary to operate pipelines, refineries and wells. The drilling of new wells, laying of new pipelines and creation of LNG export facilities will all require Flowserve's products. Additionally, much like Heckmann above, the maintenance of installed products will benefit the company even with a reduction in new installations. Its flow management products are also found outside IDA UNIVERSAL January-February 2013 the oil and gas industry in water and general industrial applications, which helps to reduce the risk of over-reliance on what is often a boom and bust industry. 7. American Railcar Industries (ARII) American Railcar Industries is a manufacturer of rail cars based in St. Charles, MO. As current rolling stock wears out from increased shipping by UNP, etc. as described above, American Railcar Industries will have the opportunity to profit from elevated orders for new rolling stock. Unlike competitor FreightCar America (RAIL), which prides itself on its coal industry focus, the company's wide breadth of rolling stock offerings makes it a likely beneficiary of sales orders. As a side note, activist investor Carl Icahn owns a majority stake in American Railcar. 8. Golar LNG Limited (GLNG) Golar LNG focuses on the transportation of LNG with 13 vessels currently in use and another 13 on order. The company is unique in that it does not just transport LNG from one port to another, but it is developing ships which can bypass LNG production facilities by rendering LNG directly from natural gas pumped aboard. If and when LNG exports are approved from the U.S., Golar won't be limited to operating from port facilities with LNG production facilities, but can operate from any port with a natural gas pipeline. Golar will benefit not just from increased use of LNG, but also from its flexibility advantage. Other industries which will benefit from the natural gas boom are modular housing manufacturers, construction companies, which will construct the new roads and buildings needed in the shale plays, and aggregate and building material suppliers who will provide the modular housing manufacturers and contractors with raw building supplies for roads, homes, restaurants, hotels and other commercial buildings. The above are only a handful of the companies which will benefit from the continued natural gas boom and should merely provide a starting point for further research before investing. G http://seekingalpha.com/article/, DEC 2012. 27