Chesapeake Energy Corp (CHK)

[researcher59]

Chesapeake must always hedge long in advance due to the risk of not doing so .... those hedge positions are actually smaller and at higher prices than I expected. So I thought it was good news. Didn't expect the NG hedge to be at as high as $3.07/mcf, which is a very profitable price. Also surprised to see no hedges yet into 2018, although futures are below $3 going that far out. 2018 NG futures are cheaper than 2017. The market expects prices to fall.

I agree oil prices will probably be higher, probably averaging $55 to $60 next year, but NG prices could easily come back under $3, depending in part on the winter weather. $3+ prices will bring on more production.