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.