Do Falling Nat Gas Prices Mean Chesapeake's A Target?

This isn't exactly breaking news, but natural gas prices have been in a downward spiral for a while now. So perhaps it's no coincidence that the charts of the U.S. Natural Gas Fund (NYSE: UNG), one of the most controversial ETFs on the market, and Chesapeake Energy (NYSE: CHK) look eerily similar. Or perhaps we should say similarly ugly.Giving Chesapeake, the second-largest U.S. natural gas producer, the benefit of the doubt means saying the stock was down "just" 24% in the past three months at the start of today while UNG was down about 45% over the same time.Let's have a quick economics lesson: Natural gas is a commodity. There is too much supply in the U.S. and not enough demand. At least not yet. Bad for Chesapeake. Now a quick stock market lesson: The market views Chesapeake as a nat gas company despite its efforts, which are credible, to increase its oil exposure. Chesapeake has been talked about as a takeover target MANY times in the past. The recent decline in the shares could get the rumor mill goin once again.At a current market value of about $13.6 billion, Chesapeake would not come cheap. Remember Exxon Mobil (NYSE: XOM) paid $39 billion a couple of years ago for XTO. Only time and a potential acquirer will tell if Oklahoma-based Chesapeake could command that price tag, but there are points of allure for potential suitors when it comes to Chesapeake.A lot of the attraction comes from the company's Utica Shale acreage. Then there's the looming spin-off of the company's oil services unit. Chesapeake CEO Aubrey McClendon said that unit could be worth $10 billion alone.With a couple of the sources of attraction identified, let's run through a short list of possible suitors for Chesapeake. A word of caution: At this point, betting on Chesapeake as a takeover target is PURE SPECULATION. There is has been no news to this effect recently.Exxon MobilCan Exxon afford Chesapeake? Yes. Should the company buy Chesapeake? Probably not because Exxon is already the largest U.S. natural gas producer. Please excuse the flatulence metaphor, but Exxon is already too gassy for most investors' taste. Investors want more oil production and added oil reserves, not more gas, from Exxon.Total (NYSE: TOT)Europe's third-largest oil company has spent billions over the past couple of years buying various U.S. shale assets from Chesapeake. It's enough to make one wonder/speculate if the French oil giant would just be better off acquiring Chesapeake outright. Total can probably afford to do that and would not face hurdles with the U.S. government.PetroChina (NYSE: PTR)Speaking of hurdles with Uncle Sam, Chinese oil companies face just that when they look to make a splash through M&A in the U.S. Remember Cnooc (NYSE: CEO) and Unocal in 2005? PetroChina can easily afford to buy Chesapeake. The primary issues are is the state-run company really interested and would the Feds allow it to happen? Chinese companies have bought U.S. shale assets, but buying an entire U.S. energy company is something else altogether.BHP Billiton (NYSE: BHPThe world's largest mining company has also been a buyer of Chesapeake assets. BHP also shelled out over $12 billion for Petrohawk Energy last year.Does that diminish this company's appetite for big M&A? Hardly. With Marius Kloppers at the helm, BHP's thirst for large-scale M&A remains strong and the company still has the cash to swing for home runs. Even after the money BHP spent on acquisitions and share buybacks in 2011, it probably has enough cash to offer a decent premium for Chesapeake if it so desires. Hmmm, smells like a winner...