Tuesday, July 22, 2008

What's That Screeching Sound?

My ears are ringing from the screeching sound of the fallout from the slide in natural gas prices this month. As I write (midday July 22), gas futures are trading at $10 even, which is down about 20% from recent highs.

The collateral damage to the gas producers' stocks seems even greater. Big Haynesville names such as Chesapeake (CHK), Petrohawk (HK), XTO (XTO), Goodrich (GDP) and Plains (PXP) are down between 6% and 12% today (on a 4-5% drop in gas prices). They are also way off their highs for the year, which were admittedly a sharp peak. CHK (-30% off recent high), HK (-31%), XTO (-30%), GDP (-37%), PXP(-24%) are all feeling the pain.

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