10 Best Natural Gas Stocks To Invest In According to Hedge Funds

06. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 42

Chesapeake Energy Corporation (NASDAQ:CHK) is a prominent player in the natural gas sector, making it a key inclusion in our list of the ten best natural gas stocks to invest in according to hedge funds. The company’s focus on acquiring, exploring, and developing natural gas properties across the U.S. has established it as a leader, with notable assets in the Marcellus Shale and Haynesville/Bossier Shales. Chesapeake Energy Corporation (NASDAQ:CHK) owns interests in approximately 5,000 natural gas wells as of December 31, 2023. Despite a decrease in hedge fund holders from 52 in Q1 2024 to 42 in Q2 2024, the company remains an attractive investment due to its strong fundamentals.

In its Q2 2024 earnings report, Chesapeake Energy Corporation (NASDAQ:CHK) demonstrated significant improvements in its operational efficiency, particularly in drilling performance. The company reported a 50% enhancement in its Marcellus drilling performance since 2022, achieved through a combination of increased drilling speed and longer lateral lengths, which grew by nearly 3,000 feet in Q2. This progress has enabled Chesapeake to reduce drilling costs by 20% over the last two years, highlighting the company’s focus on cost reduction and efficiency. In the Haynesville region, Chesapeake successfully cut saltwater disposal costs by 25%, thanks to optimized routes and strategic partnerships with vendors.

The company also reduced its full-year capital and production expenses by $50 million, which reflects a robust focus on lowering breakeven costs. This cost discipline ensures that Chesapeake Energy Corporation (NASDAQ:CHK) remains competitive in the natural gas market, especially as prices recover. Moreover, Chesapeake has built a production capacity of up to 1 billion cubic feet per day (Bcf/d), providing flexibility to scale production based on market conditions. The deferral of 46 turn-in-line (TIL) wells and the creation of 29 drilled but uncompleted (DUC) wells further demonstrates its commitment to maintaining flexibility.

Chesapeake Energy Corporation (NASDAQ:CHK) pending merger with Southwestern Energy is another positive development, expected to deliver synergies and enhance its competitive position. This merger is anticipated to close in late 2024, and the company is well-positioned to capitalize on rising natural gas demand in the future.