Chesapeake Energy Corporation (CHK), Range Resources Corp. (RRC), and Three Regions Where Natural Gas Production Is Growing

The impact of this reduced flaring is clearly evident at Kodiak Oil & Gas Corp (USA) (NYSE:KOG). In 2011 the company produced 1,329 MMcf of gas, but flared 807 MMcf. That’s 61% of the gas! Last year the company produced 6,613 MMcf of natural gas and while it flared 3,311 MMcf, down to 50% of what was produced. Meanwhile, the overall amount of gas that hit the market jumped a staggering 533%.

Kodiak isn’t the only company growing its associated gas production. Over the past two years, Continental Resources, Inc. (NYSE:CLR) has grown its overall production faster than its peers, so that it’s now the top producer in the play. While its production is heavily weighted toward oil, which accounted for 72% of production, it’s still growing natural gas production as a byproduct of its oil growth.

The Foolish bottom line
There’s one main theme that runs throughout: Companies will produce more natural gas if it’s profitable to do so. For some, that’s being the low-cost producer giving them the ability to profit when others cannot. For the rest, natural gas production growth happens naturally because of its associated with more profitable oil and natural gas liquids. Given the economics of these regions, its not surprising to see this increase in natural gas production.

The article 3 Regions Where Natural Gas Production Is Growing originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Range Resources. 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.

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