The CEOs of big-time natural gas producers like Chesapeake Energy
Take EOG. CEO Mark Papa talked in August about how the company had "become more bullish regarding 2010 and 2011 gas prices." EOG says it has an elaborate natural gas supply model supporting this sentiment. Nevertheless, keep in mind that the company -- perhaps taking a cue from Apache
Maybe EOG is super-bullish on oil and just plain old bullish on gas. The company's de minimis hedging for 2010 in either commodity could actually support such a view.
Then there's XTO Energy
Isolating the natural gas hedges, we see that XTO has layered on an additional 520 million cubic feet per day of swap transactions, at around $5.84 per mcf. That price might sound high compared with today's depressed spot market, but it's about in line with where the early 2010 futures are trading. It's also quite a bit lower than that $7.50 to $8 gas that EOG's Papa has talked about, or the $6 to $9 range that Chesapeake's Aubrey McClendon apparently foresees.
In its press release, XTO Chairman Bob Simpson assured investors that he and his colleagues "remain confident of a stronger natural gas environment" next year. That may be so, but caution is actually the word that comes to mind.
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. Chesapeake Energy is an Inside Value recommendation. The Motley Fool owns shares of Chesapeake and XTO, and has an energetic disclosure policy.