2 Energy Winners, and Another Way to Play Marcellus Gas: Cabot Oil & Gas Corporation (COG), Linn Energy LLC (LINE), Williams Partners L.P.(WPZ)

All these activities indicate Linn Energy LLC (NASDAQ:LINE) should produce 10 to 15% more oil and gas in 2013 compared to 2012. Add to this the company’s hedging activities, and you have a company well positioned to deliver higher revenues and distributions to its investors. For those not wishing to deal with a Form K-1 at tax time, investing in LinnCo (NASDAQ:LNCO) will get you Linn’s growth benefits, a slightly lower dividend, but a less onerous Form 1099.

Another way to play Marcellus shale gas

If you blanch at the idea of paying 100 times earnings for Cabot Oil & Gas Corporation (NYSE:COG), an alternative way to play Marcellus shale gas is Williams Partners L.P. (NYSE:WPZ) limited partnership. This partnership, wholly owned by Williams Companies, is a major player in Marcellus shale gas transport and a significant partner with Cabot, among other customers. According to the Cabot Q4 2012 conference call, Williams is expanding its natural gas transportation capacity with major expansion due for completion in 2015. So far, everything is on schedule. There are particularly high hopes that the Constitution pipeline will add to both Cabot’s and William’s revenues.

What does Williams offer investors besides a less expensive stock? Distributions, namely a 6.7% yield. The capital gains angle has been disappointing for the past two years but dividends have steadily increased during this time. As I see it, if Williams continues to ship a growing volume of Marcellus gas from Cabot and others, its revenues and distributions should grow.

Final Foolish Thoughts
Financial momentum is a beautiful thing and right now, Cabot Oil & Gas Corporation (NYSE:COG) and Linn Energy LLC (NASDAQ:LINE) have it. Of these two, Cabot is the investment for capital gains and Linn for income. Yes, Cabot sells at a steep premium, but it has low production costs and great production growth. If the stock dips on a general market sell off, that’s a buying opportunity. Linn rolls on with both organic and acquisition growth. Linn also grows its distributions. Devon may be a turn-around investment as it re-aligns its production to a higher oil mix and trades near four year lows. But buying Devon means paying a premium for hope; I personally want to see results instead.

The article 2 Energy Winners, and Another Way to Play Marcellus Gas originally appeared on Fool.com and is written by Robert Zimmerman.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.