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This Area Is Worth Its Weight in Natural Gas

The long-anticipated rise in natural gas prices has finally taken shape in 2013. The first three months of the year have witnessed the spot price climb north of $4 per MMBtu, and investors in low-cost producers of natural gas in the Marcellus Shale have seen that portion of their portfolios climb accordingly.

Choosing not to switch proves wise
Throughout 2012, many companies chose to defer portions of their capital budgets away from natural gas and into more liquids-heavy wells. Take Devon Energy (NYSE: DVN  ) and Chesapeake Energy (NYSE: CHK  ) for example: Both of these companies shied away from gas toward liquids in 2012 and are missing out on the run-up in natural gas prices. 

Compare the paths they have charted to begin 2013 with peers that stuck to their guns, like Cabot Oil & Gas (NYSE: COG  ) and others mentioned in the video below, and it's clear to see that staying the course has paid off thus far. Cabot Oil & Gas will continue to target growth in the Marcellus Shale in 2013, and if the gas pricing trend continues it could be a very wise move.

Will investors profit from Chesapeake's current path?
Energy investors would be hard-pressed to find another company trading at a deeper discount than Chesapeake Energy. Its share price depreciated after negative news surfaced concerning the company's management and spiraling debt picture. While the debt issues still persist, giant steps have been taken to help mitigate the problems. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.

Read/Post Comments (3) | Recommend This Article (9)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2013, at 4:57 PM, quasimodo007 wrote:

    More Pollutions of Drinking water and Land from the GREEDy POLLUTERS like the koch brothers and the GOP congress and their mafia style Privilege Crooks of wall Street. GREED and Corruption and the GREAT American RIP OFF on the POOR Consumers.

  • Report this Comment On April 13, 2013, at 7:41 PM, jokerjones69 wrote:

    Considering how much of it gets burned right out pf the ground it's no surprise . When the holding companies want more loot they just burn off more gas from the well making the supply short and keeping demand higher in relation . If they either stopped burning it off or set up power plants near the wells then energy costs would plummet > but the rich folk don't want that so they burn away ..

  • Report this Comment On April 15, 2013, at 8:17 AM, leoujr wrote:

    I hear precious little yet about the Cline formation in west Texas. The area is booming! Why is nobody talking/writing about it. DVN has an investor event tomorrow.....

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