The Natural Gas Game Has Changed: Westport Innovations Inc. (WPRT), Clean Energy Fuels Corp. (CLNE)

Don’t hate the game, pick new players
If we have to throw out the BOE parity price, than what should we use instead. According to Mr. Richels, Devon expects to use an oil to natural gas price ratio of 20:1 for its guidance. Even based on current price parity, that would involve either a significant dip in oil prices, or a surge in natural gas prices to the $5.00 range. This may still be hopeful thinking, considering that, during Ultra Petroleum Corp. (NYSE:UPL)‘s conference call, CEO Michael Watford stated that the ramping down of U.S. natural gas production may take all of 2013 before any real impact on price would take place.

If this is what we can expect from the natural gas space, then the best candidates to perform well in these conditions is natural gas users. Sustained low gas prices will help to push the door open even further for companies like Westport Innovations Inc. (USA) (NASDAQ:WPRT) and Clean Energy Fuels Corp. (NASDAQ:CLNE), which look to turn natural gas into a viable transportation fuel. With major U.S. Trucking firms taking a hard look at converting truck fleets, Westport will be the go-to company for engines, and Clean Energy Fuels will have one of the most complete natural gas fueling station networks in the country.

What a Fool Believes
Great investors have two great traits: 1) they maintain poise when others panic, and 2) they are willing to reconsider an investment when the market dynamics change. When a major company like Devon starts to think of natural gas in a different way, then investors should do the same, as well.

The article The Natural Gas Game Has Changed originally appeared on Fool.com and is written by Tyler Crowe.

Fool contributor Tyler Crowe owns shares of Westport Innovations and Linn Energy, LLC. You can follow him on Fool.com under TMFDirtyBird, Google +, or Twitter: @TylerCroweFool.
The Motley Fool recommends Clean Energy Fuels, Ultra Petroleum, and Westport Innovations. The Motley Fool owns shares of Devon Energy, Ultra Petroleum, and Westport Innovations and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, Short Jan 2014 $15 Puts on Chesapeake Energy, Long Jan 2014 $30 Calls on Ultra Petroleum, Long Jan 2014 $40 Calls on Ultra Petroleum, and Long Jan 2014 $50 Calls on Ultra Petroleum.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.