RE: RE: RE: RE: SplitHi everyone, just stopped by the HND board to see the other side of the coin.
Interesting to see shorting the HND vs goign long HNU is a neat angle to look at. Any longs HND, be very careful adn I say this with all due respect. Tehre are a number of industry reports that show for companies to earn a 10% IRR that the breakeven price for nat gas is about $8.00. There are low cost shale gas produceres that can make a profit at these low levels however theri depletion rates are close to 70% in the 1st year.
The natural gas drilling rigs in service have been cut in half so far as it doesn't pay to get the good out of teh ground so eventually supply will drop to equal demand and once demand becomes hgiher there will be a lag before new supply comes on line again. If none of this makes sense look at the nat gas futures going into 2010. I will save you teh time to look this up , it sure aint $4.00 nor is it $12 but in the $5-$6 range.
So sure you can pick up a few more $ on the HND long play but would suggest the potential returns don't justify the risk. The longs HND made a killing much like teh long oils did last year HOU but when you look at HOU now -UGLY is too kind a word.
GLTA