T. Boone Pickens, who as of last November had holdings in 26 energy companies within his BP Capital Management, now holds shares in nine companies as of its latest filing (see Bloomberg article). The fund fell an astonishing 97 percent during the final three months of 2008, declining from $1.29 billion to around $40 million. As for individual holdings, BP Capital reduced exposure to Occidental Petroleum, Transocean, and Suncor Energy, while selling all of its holdings in Schlumberger and Halliburton. The fund added shares of Chesapeake Energy and Peabody Energy.

If you have not already had a chance to check out the Pickens Plan, have a look. It is worth the time to visit the site and watch the short video (linked below). Regardless of your impression of T. Boone Pickens, his past politics, or any skepticism you may have about motivation, it is worth your time to begin thinking about the energy issue, and this is a good place to start. There is actually a little there for just about everyone, including natural gas producers, hybrid, electric, and alternative fuel automobile makers, solar, wind farmers, and electricity producers. Both green and conventional cleaner burning sources are considered. Even crude oil will still have a presence as we make changes in how energy is used over the next few decades. I applaud Mr. Pickens for at least coming up with a plan for people to begin discussing and debating. As Pickens states, we need to settle on something and start marching in the same direction. Time is no longer on our side.

Natural gas, while still seemingly high, is continuing to peak the interest of investors. T. Boone Pickens recently talked about how natural gas is still trading below its normal multiple to oil, which is traditionally 7-8. Given this normal multiple, natural gas should be closer to $14 per MMBtu, instead of under the $10 MMBtu that it has recently traded. Of course, this logic works if you believe oil will stay near $100 per barrel, which does not look like too bad a bet right now.

RealMoney.com is further stressing how one of the largest natural gas reserves in the world in Saudia Arabia is producing dry wells, and companies in the region, such as Total SA, are pulling out. If this gas cannot be acquired, supply will be less than expected.

On the other hand, Chesapeake Energy (CHK) has recently announced new natural gas discoveries. The company is expecting output increases of 21% this year, and 16% next year. The CEO, Aubrey McClendon, is also increasing his position in the company, purchasing another 1.5 million shares recently, raising his stock total to $1.2 billion. Obviously, he believes the story ........ and his company's prospects.

Ticker: CHK