Time To Buy Natural Gas Stocks?

Chesapeake Energy (NYSE: CHK)

Chesapeake is one of the biggest natural gas players in the United States, with acreage in nearly every U.S. natural gas resource area. If history is any testament, Chesapeake has survived natural gas market collapses and headwinds before, including issues in the late 1990s and 2008. The latter downturn forced Chesapeake’s stock price from more than $65 a share to close to $10 in less than six months.

Chesapeake has had to address liquidity concerns of late, because it loaded up on debt following the 2008 financial crisis to buy assets. However, it’s been renegotiating contracts and selling off assets to help alleviate any worries. It also announced a 15% reduction in its workforce to further cut costs.

The company has reined in spending since ousting its founder and CEO, Aubrey McClendon, in 2013. The recent decline in oil and gas prices has overshadowed what the new CEO – Doug Lawler, a former Anadarko Petroleum (NYSE: APC) executive – has done.

In the end, it seems that everyone has forgotten about natural gas. Bottom fishing isn’t for everyone, but for long-term investors willing to sit through some near-term volatility, Chesapeake, Consol and Range could be bargains.

This article is brought to you courtesy of Marshall Hargrave from Wyatt Research.

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