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We came across a bullish thesis on New Fortress Energy Inc. (NFE) on Substack by A Capital Research. In this article, we will summarize the bulls’ thesis on NFE. New Fortress Energy Inc. (NFE)'s share was trading at $13.10 as of Dec 10th. NFE’s trailing and forward P/E were 14.40 and 212.77 respectively according to Yahoo Finance.
A technician making adjustments to a natural gas pipeline entering a processing facility.
New Fortress Energy (NFE), a ~$11 billion enterprise value gas-to-power company, is a global leader in LNG infrastructure and cleaner energy solutions for underserved markets. Operating across regions like the Caribbean and Latin America, NFE is uniquely positioned to facilitate the energy transition in areas traditionally reliant on costly and polluting fuels. Despite challenges, including elevated leverage and aggressive capital expenditures, NFE’s recent operational achievements, strategic asset sales, and plans to split its upstream and downstream operations present significant catalysts for unlocking shareholder value.
A key pillar of NFE’s growth strategy is its innovative Fast LNG (FLNG) technology, which transforms LNG infrastructure with modular floating liquefaction facilities that are faster and cheaper to deploy than traditional onshore systems. The commissioning of FLNG1 in mid-2024 marked a turning point, with the unit now fully operational offshore Mexico, generating approximately $600 million in annual EBITDA. FLNG2 and FLNG3 are on track for deployment in 2025 and 2026, respectively, driving further EBITDA growth and cash flow generation. These milestones underpin a cash flow inflection that strengthens NFE’s financial flexibility and supports its aggressive expansion strategy.
To optimize its capital structure, NFE has pursued strategic refinancing and asset monetization. Recent initiatives include raising $1.7 billion through secured notes and equity offerings and generating over $500 million from asset sales in 2024. Transactions such as the sale of Puerto Rico power plants and the divestiture of its remaining Energos stake have enhanced liquidity and reduced balance sheet risks. The company is also advancing $1.5 billion in asset-level financing for FLNG1 and $1 billion for its Brazilian operations, enabling the refinancing of corporate-level debt with asset-specific funding supported by stable cash flows.
NFE’s vertically integrated model spans natural gas procurement, liquefaction, shipping, and downstream infrastructure. This comprehensive approach has allowed NFE to secure long-term supply agreements, often on take-or-pay terms, providing predictable revenues. Its infrastructure includes 13 operational or in-development facilities, including flagship projects like the Montego Bay terminal in Jamaica and a 100MW power plant in Mexico. NFE’s shipping segment further complements its operations with a fleet of Floating Storage Regasification Units (FSRUs) and LNG carriers, offering both storage and transportation capabilities that enhance market access and efficiency.