Is shale an oil and gas

Fracking has been called a "revolution" by the oil and gas industry. But how long can the boom last?

Oil and gas has been a safe place to invest your money for the last century or so. Sure, there were some booms and busts particularly when domestic supply started to run low in the mid-20th century.  But for the most part, pulling crude oil out of the ground and selling it has been a pretty profitable business.  

Then the shale boom happened, and things got a lot more confusing. 

Touted as the path to American energy independence, the "shale boom" refers to the proliferation of new technologies in the last few years by fracturing rocks to release trapped natural gass. This breakthrough made it possible to extract gas from much deeper wells. It is also the source of the pejorative nickname "fracking." 

Read more from Kapitall: What are some of the virtues of dividend-free value stocks?

The debate about the legitimacy of fracking is pretty heated, particularly in energy-rich hubs like Pennsylvania. What's not up for debate are the profits. 

As late as September 2013, some analysts were predicting as much as an 8% upside to companies involved in energy exploration. And that's on top of what was already a pretty hefty run. Bulls see a future where the majority of the world's energy would come from North American shale by 2020.

On the flip-side are a number of environmental activists and more skeptical economists who see a major bubble happening. Since the best mines are usually targeted first, energy can create a spiral where greater and greater capital expenditures are made to access smaller and smaller reserves. 

We decided to build a list of speculative oil plays. To do that, we looked at ones that were making significant investments, which you can't exactly screen for.

But you can screen for companies that are borrowing lots of money. And usually when companies borrow money, it's because they intend to invest it somewhere. We looked for companies with high levels of debt and high ratios of price-to-equity, which means they are trading at a premium. 

If there is a continuation of the shale boom (say, for instance, Russia goes to war and Europe needs our oil,  not an unlikely scenario), these stocks could benefit more as they've invested more.

A shale crash and we might expect the opposite. What do you think will happen to natural gas prices in 2014? 

Click on the interactive chart to view data over time. 

Are we in the midst of a shale-gas boom or bubble? Use the list below to begin your analysis and let us know what you think in the comments.

1. CONSOL Energy Inc. ( CNX): Engages in the production of multi-fuel energy and provision of energy services primarily to the electric power generation industry in the United States. Market cap at $9.23B, most recent closing price at $40.30.

 

2. Cabot Oil & Gas Corporation ( COG): Engages in oil exploration, development, exploitation, and production. Market cap at $15.01B, most recent closing price at $35.65.

 

3. EQT Corporation ( EQT): Operates as an integrated energy company in the United States. Market cap at $15.35B, most recent closing price at $101.79.

 

4. Range Resources Corporation ( RRC): Engages in the acquisition, exploration, and development of natural gas properties primarily in the Appalachian and southwestern regions of the United States. Market cap at $14.05B, most recent closing price at $87.53.

 

(List compiled by James Dennin, a Kapitall Writer. Monthly returns sourced from Zacks Investment Research.)

More from Stocks

The Recent Pullback in the Defense Sector Provides a Buying Opportunity

The Recent Pullback in the Defense Sector Provides a Buying Opportunity

IBM, Microsoft, Papa John's and UnitedHealth - 5 Things You Must Know

IBM, Microsoft, Papa John's and UnitedHealth - 5 Things You Must Know

Futures Lower on Trade Worries and 4 Other Stories to Watch Thursday

Futures Lower on Trade Worries and 4 Other Stories to Watch Thursday

Video: What to Expect From Microsoft's Earnings Thursday

Video: What to Expect From Microsoft's Earnings Thursday

UnitedHealth Could Strike Deal for Tenet's Conifer Subsidiary: Reports

UnitedHealth Could Strike Deal for Tenet's Conifer Subsidiary: Reports