Friend and Motley Fool blogger Bob Zimmerman wrote a very intriguing post entitled "3 Stooges of the Oil and Gas Industry." As much as I respect Bob and think he brings up some valid points, I have to disagree with his conclusions. One of his stooges, Chesapeake Energy (CHKA.Q) is among the market's most polarizing stocks. I think that Bob, like most investors is putting too much emphasis on past missteps and not enough on future potential.

You see, Bob's not alone in his disdain for a company that bet big on natural gas and lost when prices plummeted and the weight of its debt burden was felt. Those missteps have caused its stock to be heavily shorted -- short interest recently was more than 15% of its float. I think that investors betting against the company, as well as those avoiding it altogether, are missing its vast untapped potential.

Gassed up and ready to go?
Much has been said about the excessive compensation package of CEO Aubrey McClendon and his debt-fueled growth plan that's made Chesapeake the nation's No. 2 natural gas producer. The company is still weighed down by its excessive debt, low natural gas prices, and unease with McClendon's leadership.

With natural gas prices being a function of supply and demand, as demand increases so will the commodity's price. There are two subtle future drivers of demand that play into the company's strength in dry gas production: exports and chemicals.

Chesapeake's positions in the Haynesville, Barnett, and Eagle Ford Shales are strategically positioned in close proximity to future export facilities like the ones Cheniere Energy (LNG -0.73%) is developing in the Gulf Coast. While its Sabine Pass project won't begin exports until 2015, it's just one of many potential projects on the drawing board. Even though liquid natural gas exports from Cheniere's project are only expected to add 15 cents to the average price for 1 million BTUs of natural gas, it's one of many sources of new natural gas demand on the horizon.  

A chemical equation for success
The bigger future driver will be the importance of natural gas as a chemical feedstock. Say what you want about McClendon but he's rebuilt the company over the past few years. In the process he's transformed Chesapeake into one of the fastest-growing producers of liquids. These natural gas liquids are more richly comprised of several important feedstocks for the petrochemical industry, namely ethane and propane. 

Petrochemical companies are investing billions to build ethane crackers along the Gulf Coast to process this cheaper ethane. Dow Chemical (DOW) for example is investing in a new world-scale ethylene production plant which it expects will begin operation in 2017. That's in addition to restarting one ethylene cracker this year, and investing to improve the ethane feedstock flexibility at another facility project scheduled to be complete by 2015. 

Chesapeake not only gains from its locally sourced gas but it signed on to be an anchor shipper on the ATEX Pipeline, which is currently under construction. This Enterprise Product Partners (EPD 0.21%) pipeline project will bring Marcellus and Utica Shale ethane to the Gulf Coast petrochemical market. The 1,230 mile pipeline is expected to begin service in 2014. It represents key market access point for Chesapeake as it begins to unlock its vast resource base. 

The bottom line
As the turnaround continues, Chesapeake will continue to chip away at additional opportunities to unlock the massive underlying resources it has built up. As it does it could yield substantial returns to investors over the longer term. At some point the market will catch on and begin to revalue the company based on these underlying assets and earning potential.

With all investing comes risk -- Chesapeake is among the industry's riskiest bets. However, these big bets aren't based on pipe dreams. Instead, they're based on a company that's loaded with real assets that have the potential to produce outstanding long-term returns for investors who can see it.