) -- Remember a few weeks ago when

Chesapeake Energy

(CHK) - Get Report

, exhibiting the kind of (self-proclaimed) "discipline" it said would be required to rescue natural gas pricing, shut in some of its production?

Natural gas stocks and the price of natural gas rallied on the expectation that other exploration and production (E&P) companies would

follow Chesapeake Energy's lead.

This week, natural gas prices have fallen by double digits (roughly 13%), as more data on the overabundance of natural gas and the warm winter weather crimping demand continue to win out over Chesapeake's discipline.

A 10-year low in natural gas pricing doesn't have Exxon Mobil panicking.

But there's another big reason why natural gas rallies triggered by announcements of production shut-ins need to be viewed with hesitation:

Exxon Mobil

(XOM) - Get Report


Exxon Mobil continues to take abuse for its $41 billion acquisition of

XTO Energy

, but looked at from another perspective, the biggest impact of the deal right now is not on Exxon Mobil, but on the U.S. natural gas supply and demand equation. Exxon Mobil's philosophy, in contrast to the discipline expected of smaller independent E&Ps, suggests that any upside in natural gas pricing predicated on more production being taken off line will be countered to some extent by Exxon Mobil's long-term focus.

No matter what the specific issue, when markets panic the typical response from Exxon Mobil is to quote chapter and verse from its "long-term" playbook. When it comes to the

historic slide in the price of natural gas and the panic on the part small E&Ps that can't make money in the current environment -- but at the same time, need the cash flow from natural gas sales to stay afloat -- Exxon Mobil, playing to form, shrugged this week.

In its conference call on Tuesday with analysts, here was the most important statement from the largest U.S. natural gas driller in terms of how it is responding to the low natural gas pricing environment:

"That's a very topical item today," said investor relations head David Rosenthal. "I know there's a lot of questions and a lot of interest in the U.S. gas business and what we're seeing and what we're doing ... we remain bullish on the future of natural gas as an energy source ... we are very pleased with our unconventional resource portfolio and look forward to a major participation in that space. Now as we all know, due to record production this year and record storage levels and a relatively mild winter to date, prices have weakened significantly recently. I can tell you that we have not curtailed any gas production."

Those last four words are the most important. Exxon added that is shifting more to liquids-rich plays like every other E&P, but the numbers make obvious

the increasing gas-weighting of its U.S. portfolio and how that will continue to be as important an example of "discipline" as Chesapeake Energy's shut-ins. Exxon Mobil U.S. production reached 61% gas in the fourth quarter, up from 59% in the previous quarter.

Consider also the difference in the response from ConocoPhillips to the same question when it was asked by analysts last week: ConocoPhillips has already cut its gas drilling budget and left open the option to

shut down all natural gas production if pricing worsens.

Exxon Mobil was asked on the call if there is any price point at which it would curtail natural gas production. "Is it a gas price or is it a philosophical decision that you just keep drilling right through?" the oil major was asked by an analyst.

Here's what Exxon's IR head Rosenthal had to say:

"I really can't comment or speculate on any forward operating decisions. The comments I made earlier really talk about where we are today and, again, the plan that I talked about in terms of what we're drilling and where we're going. But I really don't have a comment to make on what any future operating decisions that we might take."

"Exxon Mobil has so much scale that whether prices are going up or down they are price takers," said Brian Youngberg, energy analyst at Edward Jones. "Exxon will always say they are going to produce their target whether prices are going through the roof or collapsing," the analyst added.

Pricing doesn't drive production decisions for Exxon Mobil as it might for an independent E&P, and its scale and AAA credit rating give it plenty of flexibility compared with smaller companies. "By default, Exxon can keep prices more or less where they are. They are a major input for where the U.S. natural gas price trades," Youngberg said.

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The perverse implication of the two contrasting definitions of drilling discipline -- Chesapeake versus Exxon -- is that Exxon Mobil could end up helping to drive smaller E&Ps out of business by its drilling program and the sustained low natural gas pricing environment. It wouldn't be Exxon's goal, but rather a byproduct of its approach.

Look at the performance of

Exco Resources


, the day after Exxon's commentary. Exco Resources, which is 98% dry gas, but only 40% hedged for 2012, was down 8% on Wednesday on four times its average volume, even though there was no news specific to the company. William Butler, analyst at Stephens, said that Exco is traded as a proxy for natural gas pricing and the commentary from Exxon during its conference call weighed on shares.

Some independent E&Ps, like Chesapeake Energy,

removed all of their hedges headed into 2012, leaving their gas-heavy portfolios completely exposed to the punishment caused by the slide in pricing.

While he did not subscribe to the cynical conspiracy theory that Exxon Mobil was enjoying

the pain of smaller E&Ps -- and to be sure Exxon has been beaten up over its acquisition of XTO Energy -- Argus Research analyst Phil Weiss did note with irony, "They have the potential to put everyone else out of business."

To extend this argument, as more of the independent E&Ps are acquired by oil majors --

which will continue if


(CVX) - Get Report

is to be believed -- there is even more scale and balance sheet to support drilling that might not be in the best interests of the entire E&P universe or the price of natural gas, at least in the immediate future.

Longer-term, with the potential for an export market for U.S. natural gas, the adoption of natural gas as a commercial transportation fuel, the shift from coal-fired power to natural gas power plants, and natural gas as a key input in the chemicals industry, supply and demand should come back into balance. Yet that's the type of energy paradigm shift measured in years, if not decades, and was indeed measured by Exxon Mobil in its latest

A View to 2040

report, in which the oil giant says demand for natural gas will rise 60% over the next 28 years.

Meantime, earnings season for the independent E&Ps is coming up.

Most of the major players including Chesapeake,

Cabot Oil and Gas

(COG) - Get Report


Southwestern Energy

(SWN) - Get Report

are scheduled to report in the second half of February. One factor for investors need to weigh as more E&Ps talk about production shut-ins is whether or not a rally in the price of shares, and the price of natural gas, is merited with the heavy influence that heavyweight Exxon Mobil now has over the U.S. natural gas market.

Butler, the Stephens analyst, said that Exxon's "discipline" could be a reason to stay interested in these beaten down stocks: "I think Exxon could be there to pick up the pieces, and it's something to keep an eye on, and a reason to stay interested in gas stocks, even though I wouldn't make a bullish call on gas prices."

Exxon or Chevon may make opportunistic acquisitions of stressed smaller companies that their long-term outlook and balance sheets can support. In the end, though, that would circle back around to the deal that led to the current natural gas market conundrum: "We might not be in the same situation if XTO was still independent," Youngberg said.

-- Written by Eric Rosenbaum from New York.


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