jimp
Not sure what the market is willing to pay for these mid cap gas companies on a cash flow basis since multiples are all over the board but LD predicts over 500 million cash flow for 2001. Wouldn't short this puppy yet:
Louis Dreyfus Natural Gas Announces New Natural Gas Hedges for March Through October 2001
OKLAHOMA CITY, Jan. 2 /PRNewswire/ -- Louis Dreyfus Natural Gas Corp. (NYSE: LD - news) announced today that it has put in place price protection on 200 MMBtud of natural gas production for the period March through October 2001, by a combination of fixed-price swaps and costless collars.
The Company sold 100 MMBtud from March 1 through October 31 at an average fixed price of $5.68. The Company also placed price protection on an additional 100 MMBtud for the period in the form of costless collars with an average floor price of $5.00 and an average ceiling price of $6.89. Summarized information for the contracts which will settle monthly against the Houston Ship Channel index is as follows:
Month MMBtud Floor Cap
Mar-2001 100,000 $7.423 $9.308
Apr-2001 100,000 $5.322 $7.207
May-2001 100,000 $4.634 $6.519
Jun-2001 100,000 $4.568 $6.453
Jul-2001 100,000 $4.550 $6.435
Aug-2001 100,000 $4.531 $6.416
Sep-2001 100,000 $4.532 $6.379
Oct-2001 100,000 $4.477 $6.366
``We continue to be very optimistic about the fundamentals for natural gas demand. Based upon prices currently quoted in the NYMEX natural gas futures market for 2001, the Company's cash flow is expected to exceed $500 million. The current market dynamics provide an excellent opportunity to add some additional price protection for our spring, summer and early fall gas production. Even if gas prices average higher than $6.89 and the ceilings are triggered, we will have approximately 40% of our 2001 production unhedged,'' commented Mark Monroe, President and CEO. |
