Written by Danny Guttridge

Natural gas futures have been trading near their 10-year lows for most of the year, but recently began a run up on the road to recovery. High production of natural gas combined with weak demand from a warm winter has pushed down prices and built a surplus, which is 55.4% above the five-year average, according to The Wall Street Journal.

However, natural gas producers are showing signs of slowing down their production, which would begin to reduce the surplus and increase the value of the futures. IAF Advisors managing director Kyle Cooper said, "I think we're due for a rally - probably overdue."

Exxon Mobile (NYSE:XOM) had previously planned to maintain their levels of natural gas production, but said last week that production fell 1.8% in the first quarter from the prior three months. They included that they are moving a number of gas drilling rigs to North Dakota and West Texas, which are areas that are rich in crude oil and natural gas liquids, which are used to produce chemicals.

Interactive Chart: Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:



Business Section: Investing Ideas
The natural gas industry might be making a comeback from industry activity. Below is a list of companies involved in natural gas drilling or production with institutional buying. Do you agree with the smart money's bullish sentiment?


List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)

1. Chesapeake Midstream Partners, L.P. (NYSE:CHKM): Operates, develops and acquires natural gas gathering systems and other midstream energy assets in the United States. Market cap is at $4.24B, and the most recent closing price is at $28.68. Net institutional purchases in the current quarter are at 6.3M shares, which represent about 14% of the company's float of 45.01M shares.

2. Energy XXI (Bermuda) Limited (Nasdaq:EXXI): Engages in the acquisition, exploration, development and operation of oil and natural gas properties onshore in Louisiana and Texas and offshore in the Gulf of Mexico. Market cap is at $2.97B, and the most recent closing price is at $37.68. Net institutional purchases in the current quarter are at 7.3M shares, which represent about 11.61% of the company's float of 62.86M shares.

3. CARBO Ceramics Inc. (NYSE:CRR): Manufactures and supplies ceramic proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. Market cap is at $1.94B, and the most recent closing price is at $84.09. Net institutional purchases in the current quarter are at 1.4M shares, which represent about 7.1% of the company's float of 19.73M shares.

4. DCP Midstream Partners LP (NYSE:DPM): Engages in gathering, compressing, treating, processing, transporting, storing and selling natural gas in the United States. Market cap is at $1.84B, and the most recent closing price is at $45.81. Net institutional purchases in the current quarter are at 3.9M shares, which represent about 13.04% of the company's float of 29.90M shares.

5. Gulfport Energy Corp. (Nasdaq:GPOR): Develops, and produces oil and gas in the Louisiana Gulf Coast. Market cap is at $1.46B, and the most recent closing price is at $26.19. Net institutional purchases in the current quarter are at 2.8M shares, which represent about 5.67% of the company's float of 49.41M shares.

6. Forest Oil Corp. (NYSE:FST): Engages in the acquisition, exploration, development and production of oil, natural gas and natural gas liquids primarily in North America. Market cap is at $1.57B, and the most recent closing price is at $13.32. Net institutional purchases in the current quarter are at 8.2M shares, which represent about 8.77% of the company's float of 93.49M shares.

7. Breitburn Energy Partners L.P. (Nasdaq:BBEP): Engages in the acquisition, exploitation and development of oil and gas properties in the United States. Market cap is at $1.32B, and the most recent closing price is at $19.03. Net institutional purchases in the current quarter are at 4.4M shares, which represent about 6.57% of the company's float of 67.01M shares.

8. Bill Barrett Corp. (NYSE:BBG): Engages in the exploration, development and production of natural gas and crude oil principally in the Rocky Mountain region of the United States. Market cap is at $1.15B, and the most recent closing price is at $23.98. Net institutional purchases in the current quarter are at 3.5M shares, which represent about 7.56% of the company's float of 46.31M shares.

9. Crestwood Midstream Partners LP (NYSE:CMLP): Engages in gathering, compressing, treating, processing and transporting natural gas primarily on the Barnett Shale formation of the Fort Worth Basin in north Texas. Market cap is at $1.09B, and the most recent closing price is at $25.54. Net institutional purchases in the current quarter are at 20.1M shares, which represent about 89.25% of the company's float of 22.52M shares.

10. C&J Energy Services, Inc. (NYSE:CJES): Through its wholly-owned subsidiary, C&J Spec-Rent Services, Inc., provides specialty equipment services for oil and natural gas exploration and production companies in the Texas, Louisiana and Oklahoma regions of the United States. Market cap is at $979.26M, and the most recent closing price is at $18.85. Net institutional purchases in the current quarter are at 10.0M shares, which represent about 27.87% of the company's float of 35.88M shares.

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Kapitall's Danny Guttridge does not own any of the shares mentioned above. Institutional data source from Fidelity.



Tickers in this Article: CHKM, EXXI, CRR, DPM, GPOR

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