|Chart 1: Natural Gas Price (Russia) US dollars/1000 cubic metres of gas|
|Chart 2: Natural Gas Price (U.S.) US dollars/1000 cubic metres of gas|
To illustrate how this can affect domestic natural gas companies we will compare the biggest natural gas producers of Russia and the United States in valuation and price level. These companies are Gazprom (OGZPY) and Chesapeake Energy (CHK) respectively (Chart 3).
|Chart 3: Comparison between Gazprom (OGZPY) and Chesapeake Energy (CHK)|
Gazprom's net sales grew 31% and net income grew 41% from 2010 to 2011, while Chesapeake Energy's natural gas and oil sales were stagnant and net income available to common stockholders even dropped 20% from 2010 to 2011.
This is again, evidence that Gazprom will outperform Chesapeake Energy if this trend in natural gas prices continues onwards.