Chesapeake Energy Corporation (CHK), Anadarko Petroleum Corporation (APC): Is Natural Gas Making a Comeback?

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Anadarko Petroleum Corporation (NYSE:APC), unlike Chesapeake Energy Corporation (NYSE:CHK), increased its natural gas production by 4% in the second quarter while oil production slipped by 6%. The company benefited from the 80% spike (year-over-year) in the price of natural gas. This was the main driving force behind the company’s rise in revenues during the second quarter. Considering the low price in 2012, and the potential rise in natural gas prices in the near future, the company is likely to keep increasing its sales in natural gas in the following quarters. Nonetheless, Anadarko expects to increase its oil production by 10% in 2013 and its natural gas production by only 4%. Moreover, once exploration projects, such as the Lucius development in the deepwater Gulf of Mexico, start producing oil (current estimate at the second half of 2014) the natural gas segment will have a smaller effect on Anadarko’s total revenue.

Takeaway

The natural gas market might start to heat up again as the demand continues to rise. This is good news as record oil and natural gas production is revolutionizing the United States’ energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg.

The article Is Natural Gas Making a Comeback? originally appeared on Fool.com and is written by Lior Cohen.

Lior Cohen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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