Loews (NYSE:LTR) is a holding company with a long track record of digging up value in beaten-down sectors. The company's late-'80s and early-'90s distress purchases of a rig fleet that we know today as Diamond Offshore Drilling (NYSE:DO) demonstrate its savvy in the energy sector. Yesterday's announcement of a significant investment in onshore natural gas assets is another intriguing move.

Loews is taking roughly $4 billion worth of Dominion Resources' (NYSE:D) gas assets off of the utility company's hands, while XTO Energy (NYSE:XTO) is buying a separate basket of properties for $2.5 billion. Loews is picking up relatively low-risk properties, predominantly in western Texas, but also in Michigan and Alabama, for roughly $1.64 per thousand cubic feet of gas equivalent. Let's get some context to see just how cheap that is.

XTO investors don't seem to mind paying roughly $2.50/mcfe, which is somewhat high relative to recent mergers and acquisitions activity in the space. The company's shares hit a record high in response to the news. Looking at the present valuations of gas players like Cimarex Energy (NYSE:XEC), Newfield Exploration (NYSE:NFX), and EOG Resources (NYSE:EOG) in terms of proven reserves, $2.50/mcfe falls into the lower end of that range.

Back at Loews, CEO Jim Tisch commented that even if gas prices stay flat in the future, the company would "do very well" with its investment. However, many Fools foresee a much more bullish supply/demand picture for natural gas. Their votes for the winner of this year's Stock Madness tournament partly attest to that view. It's one I personally subscribe to, as well. For that reason, I think Loews will be able to sail high on this particular investment.

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Fool contributor Toby Shute doesn't own shares in any company mentioned. Cimarex is an Inside Value recommendation. The Motley Fool's disclosure policy is unassailable.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.