I followed Wilbur in at $10.30. I read all about Nat gas uses ie clean energy, LNG export etc etc.
When a stock drops 40% in weeks something very large is wrong. New 52 week low daily
Can anyone come up with any reason to hold on? I know all the reasons to let go or at least enough of them
"It's all about how long it will take for the US to utilize NatGas as a transportation fuel and the exporting of LNG..."
As of now it's taking far too long for many once big NatGas companies..
It's all about their credit rating after years of depressed NatGas prices..
The assets being held in the Natgas sector are becoming less valued to the common.
As with the shipping sector many shipping companies assets were extremely devalued due to the over abundance of ships & lows shipping rates for years.. The common lost those ships to the banks & note-holders.. These were shipping giants at one time...
This recent news is not good
Exco said Feb. 3 it was in a 45-day period of exclusive talks with an unidentified private infrastructure fund to sell a third of TGGT Holdings LLC, a pipeline partnership it owns with BG Group Plc. (BG/) Exco estimated the sale price at more than $400 million and will use the proceeds to pay down debt.
“That period expired a while back and they haven’t announced anything,” Michael Hall, an analyst with Robert W. Baird & Co. in Denver, said in an interview today. A delay in the sale may complicate Exco’s ability to finance capital spending this year, said Hall, who rates Exco neutral and doesn’t own the stock.
Exco, which lost $166.7 million, or 78 cents a share, in the fourth quarter, said Feb. 23 it will “significantly reduce” drilling this year because of gas prices. About 97 percent of the company’s reserves are gas.
The period expired, ok, but it wasn't a dead line.
EXCO Resources, Inc. does not intend to update the market with any further information on this process unless and until a definitive agreement is entered into among the parties or further disclosure is otherwise deemed appropriate.
A lot of politicians are getting phone calls. "Help us with this over abundance of gas". "Pass a portion of nat gas act and address rest next year"
This implosion will stop. Some macro event will turn it.
My hope is to find a company that is well hedged out at least a few years, but is still beaten down near 5 year lows. It will be easier to find a bottom in this case. XCO is very spec as you said, but for me the downside is still far too great. I think it could see the $4s, $3s or even $2s before a turnaround. They are really in a tough position and management seem to be fools who went 'all in' without a plan. Of course if NG rebounds sharply then it will at least double or triple from here, but as you said there is no compelling reason for that to happen in the short term.
ECA & CHK... hard to pick a bottom.. I see no turnaround in the short term.. Why not choose a company that has more Liquids.. I'm interested in XCO as a spec play with a small equity position & I'm waiting for sub $5 unfortunately it may get there..
Most of my equity will be in the NatGas fund FCG 100% safer...
SD is a great Natgas play cause they are drilling for Oil while waiting for the Natgas turnaround...
PGH is another play with a great dividend..
another EXTREME spec play would be GMXR they went to Oil a little late however they still own a lot of Natgas assets..
I love SD and am already long LEAPs.
I'm looking carefully at ECA. I like how they are hedged well for 2012.
Any other beaten down natural gas plays that are well hedged going forward? CHK maybe?
I like UPL but the CFO selling out completely a month ago turned me off that (glad it did since its down about 25% since).