In this issue:

 The US energy revival has changed the world, but so far mostly by limiting our appetite for imported crude oil. Still to come are massive exports of US fuel in the form of liquefied petroleum gas and liquefied natural gas. And somewhere beyond that looms the prospect of the advanced drilling techniques pioneered in the US spreading to shale formations around the world. Australia doesn’t have the biggest such reserves; they’re estimated at a quarter of Russia’s. But it does have the rule of law and a free market in mineral rights, two advantages Russia mostly lacks. So Australia looks like the next beneficiary of the shale boom, and in this issue’s lead story Robert analyzes its prospects and previews the players likely to drive the process.

One of the early birds, the US explorer Magnum Hunter Resources (NYSE: MHR), also happens to be one of the hottest names on Wall Street, as energy stocks rebound from their early-2014 weakness. We look at the factors behind the improving sentiment and the stocks making the biggest moves at the moment.

We also have a portfolio update on Kinder Morgan (NYSE: KMI), the beaten up Conservative Portfolio holding that recently reported improved quarterly results. On the conference call, the billionaire founder challenged his critics to keep helping him buy shares cheaply. We would be happier if KMI were to make up for lost time after last year’s disappointing performance and force the boss to pay up.

As always, we remain on the lookout for bargains that haven’t yet received their due. Happy hunting.

We Want to Hear From You

Do you have a comment or question regarding any aspect of our investment advice? Please don’t hesitate to post your remarks in the relevant “Stock Talk” section within our parent website, Investing Daily.

We continually try to foster interaction with our readers. By promptly responding to your queries, we help make you a better investor — and you help us continually improve the quality of our advisories.

Commodity Update

The price of West Texas Intermediate (WTI) gained a bit of strength over the past two weeks, trading Tuesday at $94.99 per barrel, up $1.12/bbl from two weeks ago. Brent fell slightly to $106.89, a decline of $0.54/bbl from our previous issue. The cold weather continues to be a factor in the price of natural gas, with the front-month contract for natural gas trading Tuesday at $4.43/MMBtu, up a dime from two weeks ago. The Brent-WTI spread decreased to $11.90/bbl from two weeks ago, a decline over the past two weeks of $1.66.

In Other News

• Secretary of State John Kerry reiterated that the US would not be pushed into hurrying a decision on the Keystone XL pipeline. Meanwhile, the southern leg of the Keystone Pipeline is scheduled to begin shipping oil this week from Cushing, Okla., to Houston.

• Royal Dutch Shell (NYSE: RDS) issued a surprise earnings warning, blamed in part on Shell’s troubled Arctic drilling program.

• According to Magnum Hunter Resources (NYSE: MHR), Australia has the best shale gas prospects outside North America. More on this in the story below.

• With potential implications for other Permian Basin producers, Apache (NYSE: APA) warned that severe winter weather adversely impacted output in Q4.

• Germany’s new energy minister promised to address the issue of backup electricity generation required to keep the grid stable as intermittent supplies continue to be added.

• Natural gas isn’t the only energy commodity driven higher by extreme cold. Propane and heating oil are both in short supply, and prices are surging.