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Vanguard's (VNR -1%) deal to purchase $445M in shale fields reminds Paul Ausick of Chesapeake's...

Vanguard's (VNR -1%) deal to purchase $445M in shale fields reminds Paul Ausick of Chesapeake's modus operandi: "Most of the acreage is only going to be produced if natural gas prices rise. And the company appears to be planning to make the same kind of hedging gamble" CHK took last year. If prices don’t rise, will VNR be able withstand the pressure as well as the much larger CHK?
Comments (1)
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
     
    That link makes very little sense. VNR is buying assets that have hedged production, and will lock in further hedges to stabilize cash flows. Since they arent nearly as leveraged as CHK, and produce a far greater % of oil than nat gas, they are in a very different position than CHK. They are not using hedges to raise money to fund drilling, or pay down debt as CHK was. A very poorly informed comparison.
    4 Jun 2012, 12:49 PM Reply Like
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