Unless they're selling rock salt, commodity producers have to be prepared for huge price swings. The best of these companies maintain a lean cost profile, often hedge production to lock in cash flows, and keep their heads down during rough spots. We're in just such a spot right now, with natural gas having pulled back about 50% in two months' time.
While investors are panicking a little bit, I noticed several companies on Tuesday simply going about their business and investing for the long term. I think we can all learn from their temperament.
First we heard from Range Resources
The company has a major presence in Appalachia's Marcellus Shale, which is in the very early stages of exploitation. Even Chesapeake Energy
Thanks in part to a timely partnership with MarkWest Energy Partners
Two more company developments are worth a mention. Denbury Resources
Finally, in a sign of faith in its development program, Quicksilver Resources
The strong operators in this business are clearly unshaken. Stick with them, and you ought to come out of this correction relatively unscathed.
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