weiwentg

Chesapeake: When Gas Prices Will Recover

It does sound to me like Aubrey has a handle on his company's financial situation and his hedge book. However, what worries me is that he seems to assume he can sell assets in every environment. He managed recent large sales to BP and Norsk Hydro in a very difficult environment, but that's not a reason to assume he can keep doing that. Remember what Charles Prince said about how Citi was still dancing?

The comment about Aubrey being a buccaneer really did it for me. The guy is hyper-aggressive. I happen to think he has a high chance of making it big. That said, there's downside risk in that if natural gas gets under, say, $4 for an extended period, I can see a situation in which he drives the company into the ground (meaning it needs a highly dilutive capital injection or files bankruptcy). Sub $4 natural gas is a bit of a doomsday scenario, but you can never tell what commodity prices will do.