Chesapeake Energy Corporation (CHK): LNG Exports, Who Wins?

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It costs Ultra about $4 per Mcf to pull natural gas out of the ground. That means by the time that other companies start making money, Ultra Petroleum Corp. (NYSE:UPL) will be making money hand over fist. And, right now, Jim Roumell of Roumell Opportunistic Value Fund (RAMSX), thinks Ultra is among the best plays in the natural gas drilling industry.

Bigger players are likely to benefit, too. For example, both Exxon Mobil Corporation (NYSE:XOM) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A) made notable bets on U.S. natural gas in recent years. Both companies are predicting that gas overtakes coal as the second most widely used energy source in the world.

This push, however, has been a drag on both companies’ results so far because of the price collapse. If an export market opens up, both would be quick to jump on it. Shell has years of experience with LNG in Europe, which makes it particularly interesting as an investment option. Not that Exxon Mobil Corporation (NYSE:XOM) isn’t a great company, but Shell’s yield is about double that of Exxon’s despite the overall similarity between the two companies.

Selling to Our Friends

LNG exports would be a boon for the U.S. natural gas industry. And we wouldn’t even have to deal with rogue nations, since our friends need the fuel just as much as we want to sell it. All of the above companies would benefit from that demand.

The article Desperate for Gas originally appeared on Fool.com and is written by Reuben Brewer.

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