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As much as I would love to buy into the ultra low natural gas prices and wait for a recovery, I just cannot find the "right" investment for a pure natural gas "play". ExxonMobil (NYSE:XOM) simply offers it all and is impossible to ignore.

Exxon Mobil Corporation (<a href='http://seekingalpha.com/symbol/xom' title='Exxon Mobil Corporation'>XOM</a>)

The recent pullback in oil prices has also created a buying opportunity for shares of ExxonMobil. At around $81.00/share the price represents roughly a 8% pullback from it's recent 52 week closing high of around $88.00/share.

It also has tweaked the dividend yield up again to over 2.8% which is almost .4% higher than it was just several weeks ago. There are dividend paying stocks that pay less than .4% in yield in the best of times, so obviously with a huge blue chip mega cap stock this is a wonderful move for yield.

The key here is the positioning of ExxonMobil in the natural gas market. It simply is enormous. The company continues to invest enormous sums of cash into exploration, locating, and recovery of natural gas products even in a market that barely scratches the surface of where nat gas prices have been in the past, and cannot seem to move up enough to even pay for itself. Why would that be?

The answer could be two fold; the reality of USA energy independence is coming upon us faster, and the Asian need for cheap energy (as well as emerging markets) makes the exportation of natural gas products an increasingly high revenue producing endeavor and potentially an enormously profitable one in the future.

As it stands now, ExxonMobil exports nearly 2/3rds of its natural gas products to these markets already, as noted in this Forbes article of 5/26;

".........consider that Exxon Mobil already sells two-thirds of its products overseas; Conocco (NYSE:COP) has been leading the charge to ship 10 million tons a year out of Freeport LNG. Assuming market consolidation is on the cards, US shale provides the perfect prize for cash-rich IOCs to capture: sign up low cost US supplies and sell then into very high value Asian markets, and do so off their own balance sheets. Sit on the acreage; aggressively lobby for LNG exports; pocket the difference. By way of lucrative footnote, domestic acreage is also coming in useful for international swap agreements overseas - call it Exxon-Rosneft 101."

Sounds like a pretty good recipe for profit to me. The article continues;

" The spanner in the works is political risk of course; how much gas will Washington allow to leave its shores? A couple of years ago you'd have said not much, but the fact the EIA has just downgraded recoverable shale reserves from 827tcf in 2011 to 482tcf in 2012 tells you all need to know. If the US wants to maintain its shale revolution, it badly needs prices to firm to make fields economically viable. LNG exports are a good way of doing that, at least to around $4-7Mmbtu. With some careful positioning, Washington could claim a political victory in the process; maintain the health of US shale (and American jobs) by making a virtue out of LNG export necessity."

Basically, this is the reason that the big oil companies continue to pour huge amounts of money into natural gas even with cheap prices. Becoming the world leaders in exportation is more profitable and much easier than to convert all of our energy needs here in the USA far quicker than the oil companies care to do. Washington is in sort of a box because of the jobs being created, as well as the future potential for energy independence right here on our shores, when we finally do convert to other resources, namely natural gas.

My Opinion

Having the biggest of the biggest energy company within any portfolio not only makes sense, but to me, is a necessity.

ExxonMobil has it all, from fossil fuel to renewable energy resources, to natural gas. What could be better than buying shares at a reduced price, getting a dividend paying "winner" to boot, and have the potential for dramatic capital appreciation once natural gas pricing ultimately rises.

Think about this; when oil prices rise again, and natural gas prices rebound, and the US becomes energy independent, ExxonMobil could achieve the ultimate "troika" in the sector and shareholders could reap the benefits.

Source: Exxon Mobil: The Best Overall Energy Play