The £24m New City Energy trust (LON:NCE) has decided to focus exclusively on shale exploration, and invest heavily in companies which provide the technology required for shale extraction – investors’ website TrustNet informed today.
In the past 12 months the trust has returned 2.8 per cent, compared to a loss of 15 per cent for the IT Commodities and Natural Resources sector in the same period.
The fund’s focus on shale exploration means that its main interests lie in the U.S. and Canada. Its largest holdings are Vermillion Inc, a Canadian natural resources business that is listed on Nasdaq, and PHX Technology services, which provides drills and other equipment to the oil and gas sector.
With many countries looking to explore their shale energy resources, the climate is good for unconventional oil and gas. Last week, the German Government announced that it may lift its moratorium on hydraulic fracturing imposed in 2010, to pave the way for shale gas exploration.
Meanwhile, the UK Government vowed to ‘go all out on shale’ and proposed new legislation that would allow exploration companies to drill under private landowners’ homes without breaching the trespass laws.
The profitability of the shale sector is beginning to get noticed among investors. In April, Goldman Sachs Asset Management unveiled The Goldman Sachs North American Shale Revolution & Energy Infrastructure fund that invests in midstream, energy infrastructure companies.
In Poland, ALLIANZ SHALE FIZ, a closed-end fund established in 2013 and investing in promising American exploration and production companies in the shale energy sector, has seen 16 per cent profit since its inception and 5 per cent since the beginning of 2014.
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