Listened to the CC. CEO seems determined to bring yield down to be in line with peers. Means price as to go well above 20. So, 17 looks good. My only caution is NG price. He mentioned Wyoming gas properties bought for $280MM, would have been $700MM - $800MM just a few years ago. Yes, but with NG at $2.00, are they worth anything? Just makes me nervous to see a company borrowing at 8%, buying an asset that may not have any value at prices we may see for years.
ach the gas they bought is wet, 1300 mmbtu, and they hedged it at over $5.00 mcf for around 5 years and operating margin was around $4.00 mcf/probably $3.00 mcf all in. Obviously without seeing the economics it is hard to tell but would bet investment pays back with mainly maintenance capital and some but very little new drilling