For the past several years, I've mocked the wholesale shift away from natural gas as a case of the tail (stock analysts) wagging the dog, not because I foresaw the price of oil dropping 40% in four months. I was more concerned with the lemming effect of gas guys piling into liquids, arriving late and paying too much.
A quick glance the stock charts of many of these independents is scary:
This morning, I saw that EXCO Resources killed its quarterly dividend: it's hunker down time in the oil patch right now.
Since the Haynesville got rolling eight years ago, several of the bigger independents, notably XTO and Petrohawk, have been gobbled up by deep pocketed operators. They're going to be OK. But it's disconcerting to see many of the operators in the Haynesville suddenly treading water - and it's not even the fault of natural gas!!!
Look for some acquisition deals coming soon. There is a ton of private equity money sitting on the sidelines ready to pounce. They've been waiting for a buying opportunity, and they don't come in any prettier wrapping than this. Merry Christmas!