On September 21, 2009
Chesapeake Energy Bets on Higher Natural Gas Prices
Aubrey McClendon, chief executive of Chesapeake Energy, told analysts on the August earnings call that he expected natural gas prices would rise to between $6 and $8 per thousand British thermal units (MMBtu) by summer of 2010. As natural gas comprises 92 percent of its total energy production, the company stands in good stead to take advantage of any recovery in prices — especially since it has ample recoverable reserves and the lowest drill bit finding costs in the industry. Cash prices for natural gas were bouncing off seven-year lows last week, trading in the $2.50 -$2.70 per MMBtu range as underground storage and domestic gas supplies remained stronger than the fundamental demand for existing volumetric production. Working gas in…
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