Recently, natural gas prices have been lower due to reduced demand during this recession and excessive supply from domestic natural gas fields.  Natural Gas prices are poised to head much higher.  This gives you an opportunity to accumulate one of the best natural gas companies Chesapeake Energy stock (CHK) at a great value.

There is plenty of room for the price of natural gas to rise and still be a great deal for consumers.  Natural gas prices are down almost 40% this year.  Natural gas costs $3.83 per thousand cubic feet, which is equivalent to almost eight gallons of gasoline.  Natural gas is clearly the cleaner and cheaper alternative to our dependence on foreign oil.

Natural gas burns more cleanly than other fossil fuels, like oil and coal.  Natural gas produces about 30% less carbon dioxide than burning oil and about 45% less than burning coal.

Natural gas is a major source of electricity generation and is supplied to homes across America.  Best of all, natural gas is a cleaner alternative to other automobile fuels like gasoline and diesel.

Our society is moving towards cleaner sources of energy, which should lead to a new decade-long bull market in natural gas.  Here is how to play it:

Chesapeake is one of the biggest independent explorers for natural gas and the largest producer of natural gas in the U.S.  The company focuses on discovering, acquiring, development, and production of natural gas reserves.

At the end of 2008, Chesapeake owned an interest in over 41,000 producing oil and gas wells.  Last year, Chesapeake drilled over 1,800 company-operated wells and their drilling success rate was 99%.

Chesapeake boosted its natural gas production by 18% in 2008 and the company is well positioned to increase production once natural gas prices head higher.

I’m bullish on Chesapeake Energy because I believe they can produce more natural gas than the majority of analysts expect and I forecast higher natural gas prices which will boost company profits.

My favorite way to play rising natural gas prices is to buy stock in the Chesapeake Energy Corporation (CHK).  This is a great longer term hold.  If you decide to take a position in Chesapeake, accumulate a position over time because natural gas prices tend to be quite volatile.

Best Wishes,

Ted Peroulakis