Legendary billionaire energy investor T. Boone Pickens did not become legendary, or billionaire for that matter, by making a lot of mistakes. To that end, many traders who actively follow energy equities and futures listen when Pickens speaks.

Pickens noted Wednesday on CNBC that oil probably will not fall much further than another $5 per barrel -- encouraging news for the oil bulls. West Texas Intermediate for November delivery finished at $89.98 on Wednesday, the lowest closing price since Aug. 2.

Perhaps more interesting was Pickens' call on natural gas, which he expects to trade up to $4 by the end of this year. The October futures contract expired Thursday, but it appears the November contract will trade above $3 per per million British thermal units, a price the front-month contract has not settled at since July.

In other words, natural gas at $4 per million btu is an ambitious call and if that scenario comes to pass, the following stocks could be big winners:

Cabot Oil & Gas (COG)

Cabot has the word "oil" in its name, but this is a gas company. At the end of 2011, 96% of the company's proven reserves were natural gas.

In the past five trading days, Cabot has been treated like an oil stock as the shares have fallen four percent. The good news is that decline serves to make an already alluring valuation all the more compelling.

Beyond the reserves statistic, there is another reason why Cabot will benefit from higher natural gas prices: Production growth. In July, the company forecast 2012 production growth of 35% to 50% and liquids production growth of 55% to 65%. Cabot expects 2013 production growth of 30%.

Range Resources (RRC)

There are two easily identifiable reasons why Range Resources will deliver for investors if natural gas soars to $4 and beyond. At December 31, 2011, Range had 5.1 Tcfe of proved reserves, a 14% increase over the prior year.  In addition, Range estimates 44 to 60 Tcfe in net unrisked resource potential from its unbooked drilling inventory and emerging plays, the company said on its web site.

Nearly 80% of those reserves are natural gas. The company's production growth outlook for this year is not as strong as Cabot's, but growth of 30% to 35% is still impressive. The other reason Range would benefit from higher gas prices is that takeover rumors could be renewed.

Range has long been believed to be a takeover target with Royal Dutch Shell (RDS.A) often mention as a logical suitor. That rumor has been around for years, but Range is still an independent company. Something to consider is that like regular investors do sometimes, big companies chase performance. It would be cheaper to buy Range with gas futures at $3 per million bTu, but if the price jumps to $4 and beyond, that could motivate some suitors to come forward.

First Trust ISE-Revere Natural Gas Index Fund (FCG)

One benefit of the First Trust ISE-Revere Natural Gas Index Fund is it removes the burden of stock-picking for investors. Another is this fund is chock full of potential takeover targets, including Cabot and Range. Both are found in FCG's top 10 holdings.

The downside is this is a volatile ETF and in recent days has been treated more like an oil fund. Last week, FCG was trading around $18. It closed just above critical support at $17 on Wednesday.

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