) -- For my top energy/

oil stock

pick of 2010, I've chosen a natural gas company and, arguably, the worst one:

Chesapeake Energy

(CHK) - Get Report


I'll admit that Chesapeake is a double-edged sword. But it's an energy company that is levered to natural gas exploration, extraction, storage, transport and


. And that makes choosing it a no-brainer going into 2010.

There is nothing that holds greater potential for the investor in the energy patch in the coming year than natural gas.

It is relatively cheap. Although it normally sells six to 10 times cheaper than crude oil, it is currently selling 14 times cheaper.

It is plentiful. We continue to see full-to-the-brim storage capacity in natural gas. This year, we've also seen a surfeit of discoveries of new domestic deposits, both in shale and elsewhere.

And we have finally developed the technologies and machinery with fracking and water injection to get at these new and huge discoveries, extracting more gas from every well.

Lastly, it is domestic. In a country engaged in two wars overseas, what could be more fundamental than maximizing North American energy sources that benefit U.S. corporations exclusively? Imports from crude oil annually remove $200 billion dollars of American capital and place it in the hands of people who don't like us much and are clearly using some of that money to help fund our enemies.

For these reasons, it is hard to imagine a near-term consolidated energy policy that does not have natural gas as its cornerstone. While shifting to alternative and sustainable sources like solar, wind, geothermal and biofuels is a laudable goal, for the next 10 years at least we are destined to be reliant on fossil fuels as we make that transition.

Exxon Mobil's

(XOM) - Get Report

recent acquisition of

XTO Energy


TheStreet Recommends

shows that Exxon understands this.

With that purchase, the largest and most conservative oil company said that the future of U.S. energy is one of natural gas cars and natural gas fuelling stations, and of incentives and subsidies for further commercial conversions from oil to natural gas as a primary fuel. Exxon paid a hefty premium for XTO, and did it only because it needed the exposure.

My choice of Chesapeake definitely has its problems. The company has the worst balance sheet among four biggest natural gas companies, including


(DVN) - Get Report



(APC) - Get Report



(APA) - Get Report

. It's CEO, Aubrey McClendon, has had problems with shareholders over outrageous bonuses. The company has big and not particularly good exposure to over-the-counter natural gas swaps, courtesy of

Goldman Sachs

(GS) - Get Report

. These have given the company some price protection but have limited its upside potential should natural gas prices rise significantly.

And natural gas prices are going to rise -- you don't need to be Svengali to see it coming. Already, the January 2011 contract is trading at $7 dollars, a 35% increase from today's prices, and that's only a starting point. Think of it as a "baked in the cake" upside bias if you like.

But all of the specific problems for Chesapeake have also been reflected in the company's share price. Although its competitors have made stronger comebacks in 2009, Chesapeake has lagged. This makes it a riskier play, but it also makes it the best value play. With Chesapeake trading under $25 dollars, I can easily imagine it doubling in price in 2010 -- something I don't see happening with shares of Devon, Anadarko or Apache.

Natural gas is our obvious energy future and by far the best investment opportunity in energy for the coming year. That's what makes Chesapeake my top stock pick for 2010.

-- Written by Daniel Dicker in New York.

At the time of publication, Dicker was long Chesapeake, but positions can change at any time.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 20 years' experience. He is a licensed commodities trade adviser. Dan's recognized energy market expertise includes active trading in crude oil, natural gas, unleaded gasoline and heating oil futures contracts; fundamental analysis including supply and demand statistics (DOE, EIA), CFTC trade reportage, volume and open interest; technical analysis including trend analysis, stochastics, Bollinger Bands, Elliot Wave theory, bar and tick charting and Japanese candlesticks; and trading expertise in outright, intermarket and intramarket spreads and cracks.

Dan also designed and supervised the introduction of the new Nymex PJM electricity futures contract, launched in April 2003, which cleared more than 600,000 contracts last year alone. Its launch has been the basis of Nymex's resurgence in the clearing of power market contracts over the last three years.

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts as an analyst of the oil markets on CNBC, Bloomberg US and UK and CNNfn. Dan is the author of many energy articles published in Nymex and other trade journals.

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.