Indeed, I've been tinkering around with finding a formula to peg the price of CEP vs the market price of natural gas. Given that CEP's lifting costs are about $3.60/mcf and the current price of natural gas is $3.60/mcf, the hedges are the only thing keeping them afloat. Since the hedges extend out several years, it is possible that they will survive until the next price spike.
I just wish these guys would/could find a way to drive down the LOE costs to make the field more economic. PostRock is trying to use submersible pumps and horizontal wells.
rrb I think the $8.00 hedges extend for about another 2 years and while I agree the lifting costs are less than break even now drilling new wells will add about $1.30 in finding costs making it very uneconomic to drill on CEP leases today.