MDCigan

Goodrich Petroleum: Gas in the Ground Doesn't Mean Cash in the Bank

Many naïve investors assume that the value of a company’s reserve position (i.e. the value of the estimated oil and gas under the land the company owns or leases) should translate into its market cap. What they neglect to take into account is that it takes a substantial amount of operational and capital expenditure to extract the reserves.

You've got a good point here, but I think you are missing something critical that makes your short position very dangerous if not outright crazy. *Any* of the smaller operators with Haynesville acreage are takeover targets for larger E&P companies that want to establish a presence in Haynesville, and DO HAVE the operational expertise, capital budgets, and scalability to profitably extract the reserves. Either that, or the smaller company like GDP just partners with a bigger company to do the heavy lifting for them:

uk.reuters.com/article...

I'm long CHK and CHK options