(Corrects paragraph 11 to "buy" instead of "sell")
* Pickens says his hedge fund is 'up on the year'
* Does not expect natgas in 2015 to drop below $5
* Pickens owns stake in Marcellus Shale
(Recasts, adds details throughout)
By Jeanine Prezioso
NEW YORK, July 12 Billionaire energy investor
T. Boone Pickens who has urged the United States to move toward
vehicles fueled by natural gas instead of gasoline, said on
Tuesday he was not a huge holder in gas futures.
Pickens, who has been buying up acreage in U.S. land rich
with gas deposits, said he is bullish on 2015 natural gas
prices, pegging them above $6 per million British thermal
units, but has a "somewhat minor position" in them, holding
options that convey the idea that gas will rise above $6, but
not above $8.
"I'm not a big holder of natural gas," he told Reuters,
referring to his position in financial futures. "I'm a big
holder in clean energy."
Pickens, a vocal proponent of natural gas-fueled vehicles,
said he has sold $8 call options, bought $6 call options and
sold $5 put options in 2015 New York Mercantile Exchange
natural gas futures conveying his belief that prices will not
drop below $5 and will rise above $6, but not above $8.
He did not disclose specific months or periods within the
NYMEX natural gas prices for calendar year 2015 were
$5.73/mmBtu on Tuesday, according to Reuters data.
The front-month NYMEX gas contract was trading around $4.34
on Tuesday afternoon.
Selling put options to collect premiums and finance the
purchase of call options is a common trading strategy.
Buying a call option allows the holder of that option to
purchase gas futures at that price even if they are trading
higher. Selling a call option means the seller may have to pay
out on the option should it rise to that level or higher.
A put option sale essentially sets a floor under the price
level to which an investor thinks it will fall.
If the price should drop below $5, Pickens would still have
to buy it at $5 from whoever purchased the option.
Pickens, who has shares in a number of natural gas
producers and related energy companies through his hedge fund
Dallas-based BP Capital said the fund is "up on the year,"
He declined to disclose specific equities or other holdings
at the end of the second quarter.
Pickens is co-founder of Clean Energy Fuels Corp (CLNE.O)
which sells compressed natural gas and liquefied natural gas
that fuels light and heavy trucks.
He also said he's been buying up U.S. shale acreage
including in the Marcellus shale, one of the largest natural
gas fields in the world located in the eastern U.S.
(Reporting by Jeanine Prezioso. Additional reporting by Matt
Daily; Editing by David Gregorio)