Range Resources Corp. (RRC), Cabot Oil & Gas Corporation (COG): More Good Times Ahead?

But as new gas pipelines come online over the next several months, this backlog should fall dramatically. To capitalize on this expected improvement in infrastructure, the company recently added a sixth rig in the Marcellus. While the new rig won’t have any impact on 2013 production since the associated wells won’t be turned in line until 2014, it still gives the company a nice catalyst for ramping up growth next year.

The bottom line

Overall, I think Cabot presents an attractive opportunity for investors with a two- to three-year time horizon. Not only does it offer solid upside potential from a recovery in gas prices, but it also has limited downside thanks to its extremely low cost structure and dominant position in the Marcellus. Though the stock has run up significantly in recent months and currently trades at around 19.3 times cash flow, I still see reasonable value at its current price of around $38 a share.

The article 1 Company Rocking It in the Marcellus originally appeared on Fool.com and is written by Arjun Sreekumar.

Fool contributor Arjun Sreekumar owns shares of Ultra Petroleum. The Motley Fool recommends Range Resources and Ultra Petroleum, owns shares of Ultra Petroleum, and has options on Ultra Petroleum. 

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