Thursday, April 12, 2012

RBN Energy Blog: Natural Gas Below $2.00

Link here to RBN Energy (access may need registration): author writes about implications of oil below $2.00.

One of several observations (from RBN):
Producers of dry gas are in trouble.  They are receiving a lot less money in the door than was budgeted, because nobody did a budget based on sub-$2.00 gas.  Those that had substantial unhedged volumes will need to borrow money, sell assets and scramble to make ends meet. 
On April 9, I blogged:
April 9, 2012: Chesapeake raises $2.6 billion in cash; sells some non-core assets, including Oklahoma acreage to XTO.

April 9, 2012: Chesapeake removed its hedges for 2012 and 2013 at at time when natural gas was around $4, and just before natural gas plummeted to ten-year low, around $2.00. It will be interesting to see how this plays out.
Interesting.

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