Chesapeake Energy Corporation (CHK) will continue its rise

Recently, Royal Dutch Shell plc (ADR) (NYSE: RDS-A) struck a deal with Tokyo Electric Power Co. Shell will export 800,000 tons of liquefied natural gas annually to Tokyo Electric Power Co. Also, the Canadian government and the U.S. Department of Energy have recently approved export gas projects in British Columbia and Texas, respectively.

Furthermore, Cheniere Energy has the only approved LNG export terminal in the U.S., which has the capacity to ship up to 2 billion cubic feet of gas per day by 2015.  The company is also planning to open a new export terminal in Corpus Christi by 2017.  Owning the only liquefied natural gas terminal puts Cheniere in a better position than its competitors.

Last but not least, Chevron Corporation (NYSE: CVX) can become a leading player in the LNG exports arena with the help from its Gorgon and Wheatstone projects in Australia. Wheatstone’s initial capacity is 8.9 million metric tons of LNG per year. Furthermore, the Gorgon Project is Australia’s largest single-resource project, with a 15 million-metric ton per-year LNG facility. In the face of such strong competition, Chesapeake will have to enter this market quickly to benefit from this opportunity.

Summary

Chesapeake is a stock that has been penalized too harshly for its past mistakes. Sometimes markets takes such a harsh view of the past dealings that it overshadows the future potential of the company. There is no denying that past mistakes have affected the company badly. However, almost all of the recent steps taken by the company are in the right direction. Chesapeake has built a massive portfolio of assets, which will help the company grow. I believe Chesapeake will prove to be a solid long-term investment and investors should be patient. I would recommend that investors hold to their positions, and add on the dips in the stock price. I believe Chesapeake can turn the corner during 2013, and return handsomely to investors.

The article Chesapeake will continue its rise originally appeared on Fool.com and is written by Ishtiaq Ahmed.