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Clean Energy Fuels Surges on Chesapeake Investment, Upgrade

July 12 (Bloomberg) -- Clean Energy Fuels Corp., the largest U.S. provider of natural gas for transport, jumped the most in 16 months after Chesapeake Energy Corp. said it would buy $150 million of its convertible bonds and an analyst upgraded the shares.

Clean Energy rose $2.02, or 15 percent, to $15.14 at 11:35 a.m. in Nasdaq Stock Market trading. Shares of the Seal Beach, California-based company earlier climbed as much as 17 percent to $15.37, the highest in two months.

Chesapeake, the most active U.S. gas driller, yesterday said it would purchase Clean Energy’s bonds over three years, part of a plan to create a $1 billion fund to invest in companies that develop gas for transportation.

“Chesapeake’s been a leader frequently in the gas business,” Boone Pickens, Clean Energy’s biggest shareholder with about 28 percent, said today in an interview at Bloomberg Headquarters in New York. “Chesapeake’s convinced that Clean Energy has the personnel and expertise to build the infrastructure” to fuel as many as 8 million long-haul trucks with gas, Pickens said.

Pickens, who also owns Chesapeake shares, said he’s discussed developing gas as vehicle fuel with Chesapeake Chief Executive Officer Aubrey McClendon. Chesapeake, which is drilling for gas on Pickens’ Texas ranch, is also buying water from him to fracture rock and liberate gas, he said.

Clean Energy today was raised to “outperform” from “market perform” by Northland Securities analyst Eric Stine with a 12-month price target of $17 a share.

Chesapeake, based in Oklahoma City, was up 1 cent to $29.76 a share.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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