jimboburnsy

Bullish Signs from Oil

The correllation between natural gas and oil prices has always baffled me. Something else that has always baffled me is the apparent insistence that an operator whose stated focus is natural gas will not benefit from an increase in crude prices. PUDs are completely made up, albeit systematically and scientifically made up, and most of it never gets developed. It is not really very difficult to change tack and start producing oil in an environment that encourages oil production. In other words, if oil is good the benefits will be across the board.

Range has established a considerable position in the Marcellus shale that is looking like less of an asset right now, but they enjoy some modicum of protection by way of some favorable hedges through 2010. The problem is that the next round of bailout candidates will be hedge funds.


On Jan 27 01:57 PM Mmarrkk wrote:

> Quick question: how does a move in oil make for a move in EXCO, Range,
> etc? These are natural gas producers and while there is a correlation
> between oil and gas prices, that has been weak as of late. Natural
> gas is mired in a supply/demand imbalance that has only minimal relationship
> to crude.