KWK Hedged at $5.00 plus and Utilities Bought contracts at $2.75 to $3.25 for 2-3 years
So, the NG to Coal switch want occur for another 2-3 years as those bought contracts by the utilities will have to be delivered by the ones that sold them. As I understand it companies like UPL and others Hedged at $3 plus because their costs is less than $2 on their gas. In the mean time who and where is it gonna come from to inject into storage as the summer wears on? Utilities got their price, KWK got their price $5 and UPL got their price, and NOBODY HAS BEEN DRILLING FOR WELL OVER A YEAR and we will see a 10% decrease in well recovery.... and we have a NG demand/supply imbalance in the US until world NG prices balance out. I'd buy at these levels if I had reserves.