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"There's something happening here, what it is ain't exactly clear ... it's time we stop, hey what's that sound? everybody look what's going down" ... are some of the lyrics of 60s group Buffalo Springfield.

Oil is back up to almost $97 as I write, and speaking of oil, there's a big natural gas producer that's determined to make more money by increasing its production of oil.

This familiar energy powerhouse Chesapeake Energy Corporation (NYSE:CHK), together with its subsidiaries, is the largest independent producer of natural gas in the United States and the second largest producer in the U.S., period.

The company focuses on discovering, acquiring and developing conventional and unconventional natural gas reserves onshore in the United States, primarily in its six natural gas shale plays: the Barnett Shale in the Fort Worth Basin of north-central Texas; the Haynesville and Bossier Shales in the Ark-La-Tex area of northwestern Louisiana and east Texas; the Fayetteville Shale in the Arkoma Basin of central Arkansas; the Marcellus Shale in the northern Appalachian Basin of West Virginia, Pennsylvania; and New York and the Eagle Ford Shale in south Texas.

The company has also vertically integrated its operations and owns substantial midstream, compression, drilling and oilfield service assets.

It also has operations in the Granite Wash Plays of western Oklahoma and the Texas Panhandle regions, as well as various other plays, both conventional and unconventional, in the Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, south Texas, Texas Gulf Coast and Ark-La-Tex regions.

In other words, it's in all the right places, and many of those places have large reserves of oil. The Chinese know this too, and they're used to doing business with CHK.

The Chinese recently announced that they've opened up bidding on the U.S.' energy-rich shale formations, the same places where CHK has its major operations. Petro China (NYSE:PTR) and China Petroleum and Chemical (NYSE:SNP) are among the companies competing for the right to develop the land. They smell lots of natural gas and oil.

The Chinese are anxious to tap the huge natural gas and oil reserves in America's domestic shale regions to meet their insatiable need for energy.

CHK is familiar with doing business with the Chinese. Over the last year they teamed up with the state-owned Chinese oil conglomerate CNOOC (NYSE:CEO) to develop several of the more famous U.S. shale formations to extract gas and oil.

CEO acquired a 33% stake in Chesapeake's oil and gas assets in both the Eagle Ford and Niobrara shale. The deal provided Chesapeake a timely cash infusion and gave CNOOC access to some valuable resource-rich land.

But the "real deal" and the hidden value of both transactions extends beyond the land itself.

CNOOC is getting first-hand training in fracking, a drilling process the Chinese must learn more about in order to tap their own shale gas reserves.

And CHK is establishing itself as China's top "teacher" in shale gas. The complexity of tapping shale means China will likely need more of the company's help.

This is a major advantage for CHK in my opinion. Chesapeake appears to be the only company partnering with the Chinese on U.S. shale gas projects. This makes Chesapeake the likely "go-to" firm for any future partnerships on Chinese soil.

A big plus is that the Chinese are very good at finding oil, and Chesapeake's CEO Aubrey McClendon has frequently and publicly stated that CHK wants to increase oil production. Companies like PTR and SNP can show Chesapeake the way.

Shares of CHK recently broke above $30 a share after dropping as low as $27.28 on June 27th. That was the same day one of its officers, Henry Hood, disposed of over 40,000 shares at $28 per share.

This kind of insider selling appears to be simply a portfolio rebalancing at the end of the quarter, and according to Yahoo Finance (click here for details), Hood still owns over 626,000 shares as of 6/27.

CEO McClendon owns almost 3 million shares, and insiders cumulatively own around 4% of CHK shares. As the chart below shows, CHK is on the very of breaking above its 50-day Simple Moving Average (SMA).

Going all the way back to the end of 2010, when CHK moved above its 50-day SMA it continued decisively higher, making nice profits for those on-board with shares in their account.

Chart forChesapeake Energy Corporation (<a href='http://seekingalpha.com/symbol/chk' title='Chesapeake Energy Corporation'>CHK</a>)

Now that being said, I like to buy CHK when the shares are on sale, like they were at the end of June 2011. But if you're a "momentum investor" you'll be tempted to at least own some shares when CHK breaks through its 50-day SMA.

Reuters reported today that a privately-held company, Twin Eagle Resource Management LLC, which CHK financially backed, just received a minority investment stake from another privately-held company, LS Power (click here for details).

"With the addition of LS Power to our current shareholder group, Twin Eagle further strengthens its base of strategic partners that can help accelerate our natural gas and power businesses," said Griff Jones, Twin Eagle Resource president.

Jones and former Dynegy (NYSE:DYN) Chairman Chuck Watson launched Twin Eagle in 2010 with help from CHK. The success will be another "feather" in Chesapeake's "cap" and demonstrates how CHK invests for growth and expanded profits.

What's "going down" at CHK is not the price of its shares. The company has big plans for growth, as is clearly defined at its informative website. Check out its home page and "top news stories" section.

In fact you can see Jim Cramer interviewing CEO McClendon last week on Cramer's show.

The company posted it on CHK's site where they discuss the idea that natural gas and CHK's future growth may be "understated" and the reasons why.

There's a clear "set up" for CHK to grow for months and years to come.There's a powerful movement aloft to make natural gas the world's "cleaner and abundant" energy source.

At the same time, CHK is clearly determined to partner with international companies to find and extract more oil as well as natural gas for its huge shale real estate.

CHK is selling at less than 10 times next year's earnings, and compares favorably with competitors like Devon (NYSE:DVN) and Southwestern Energy (NYSE:SWN) when it comes to key financial statistics and the current value of these companies' stock price.

With one of the best leadership teams in the energy business, and the top leadership clearly putting its own money where its heart is, CHK is a company to consider.

That's why investors like myself and many institutions are buying on dips with the insiders who are clearly doing the same.

Source: Chesapeake Energy: The Set-Up for the Next Buying Opportunity

Additional disclosure: I'll be buying more if CHK corrects again below $28. I personally use a 25% Trailing Stop Loss as a way of protecting against the unexpected.