Natural gas fans, fear not. The best companies in this business are built to withstand the kind of turbulence we've seen in recent weeks.
It's not often we get to hear about firms' long-term price expectations, but EnCana gave some very informative commentary on its conference call. The firm pointed to $8 or $8.50 natural gas as "basically what we built our entire program on." The fact that they've been getting $10-plus lately is just gravy, and allows the firm to plow even more cash flow into new leasehold acreage and development drilling in places like the Haynesville Shale and the Horn River Shale, where folks like XTO
So does the machine break down below $8? Not at all.
If natural gas prices keep sliding, you'll see companies like EnCana, Chesapeake Energy
I know I'm neglecting the oil side of the business, which, come next year, will be split off and run as a separate entity. I just can't get over the attractiveness of EnCana's resource play portfolio. The shares are getting silly cheap here, and if it weren't for the forthcoming company breakup, I'd expect management to jump back on the share repurchase train, pronto.