Cheniere Energy, Inc. (LNG), ConocoPhillips (COP): Natural Gas Gets a Green Light

Natural-gas prices could easily rise to the $5 to $7 level by the time LNG exports start, which means that we will still have the competitive pricing advantage for exports and that natural-gas producers will be able to be profitable, spurring investment. ConocoPhillips (NYSE:COP) has said that it would need prices to be in the $5 to $6 range before it returns its focus to natural-gas production.

Exxon Mobil Corporation (NYSE:XOM), the biggest natural-gas producer in the US (in terms of volume and size), needs higher natural-gas prices; as does Chesapeake Energy Corporation (NYSE:CHK), the second-biggest natural gas producer (in terms of volume).

With Exxon Mobil Corporation (NYSE:XOM), low natural-gas prices have cut into its margins and profits, making the company seem less profitable. But when prices rise, instead of having natural gas drag on earnings, it will boost them. This will push Exxon Mobil Corporation (NYSE:XOM)’s stock higher over the next couple of years.

Chesapeake Energy Corporation (NYSE:CHK) has been trying to move into natural-gas liquids and crude oil production, but still is largely a natural-gas producer. It has a $3.5 billion funding shortfall for 2013 for its operations and CapEx programs, so higher natural-gas prices will reduce its need to have to sell off assets and cannibalize itself just to get by.

Final thoughts

The US is about to become the Saudi Arabia of natural gas, and green lighting LNG exports was a good move by the president (took him a while, but still). These are several players ready to produce, liquefy, and move the LNG around the world while creating millions of jobs in the US. Bullish on natural gas and the future of US LNG exports.

The article Natural Gas Gets a Green Light originally appeared on Fool.com and is written by Callum Turcan.

Callum Turcan has no position in any stocks mentioned. The Motley Fool has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. Callum is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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