Energy! Energy! Energy!

Energy is the place to be right now.With the price of oil up over $140 per barrel, there is more pressure to drill and explore areas where we might find oil. One of the most popular areas right now is the Haynesville Shale ( natural gas ) in northern Louisiana. Chesapeake Energy( CHK ) along with Petrohawk ( HK ) hold the most acres. Luckily, I own Chesapeake for myself. I've owned it off and on over the last couple of years. I recently bought back into it on May 30th so in the last month, it has jumped over 30%. Unfortunatly, I DIDN'T buy Petrohawk when I was looking into it a week ago. If I had, I would be up over 25% in just a little over a week. I think I'll wait for a pull back before I get in. That's a huge run in a short period of time.

The other energy play that is hot right now is the Bakken Shale in the Dakotas/Wyoming/Montana area. There are several smallish companies drilling in the area right now. One of those is Continental Resourses ( CLR ). I bought them at the end of April and in one short month, it almost doubled in value. I saw it starting to decline so I sold off all of my shares. I might get back in again but for the last month it has been flat. Another small player is Brigham Exploration ( BEXP ). This is my speculative play. It hasn't done much since I bought it a month ago. I'm hoping they will ride with big news from other companies. Proabaly the biggest player in the Bakken right now is EOG. I contemplated buying them, but they've been trading flat so I decided against it.

Another way to play the energy sector right now is with Hugoton Trust ( HGT ). They are a trust account for XTO. Not only do they pay an awesome 12% annual dividend but they pay out a percentage of the dividend each month around the 15th. So the dividend compounds monthly as opposed to quarterly. Plus, since I bought my initial shares at the end of April, it has seen an increase of 21% which makes the monthly dividend gravy. I bought 220 more shares last week, just in time to get the next dividend payout and it is already up another 3%.

Today, there was a HUGE sell off in all things energy, oil, coal and gas related. Even though the price per barrel was up again almost $3.00, I think people were just looking to keep SOME profits wherever they could find them. These stocks typically have huge swings plus or minus 5% on any given day but today, they were slammed big. But, in a couple of days, there will probably be a great buying opportunity since I don't see these commodities coming down anytime soon.