Haynesville Natural Gas Plays Refuse to Sell off - Goodrich Petroleum (GDP), Petrohawk Energy (HK), GMX Resources (GMXR), Comsto

Submitted By Trader Mark
We've discussed recently the hot new place for natural gas is the potentially enormous Haynesville Shale [Jul 2: Petrohawk Energy and Chesapeake Energy Flying on Haynesville Shale News] (EDIT: Let me add 2 additional names) I've been hoping one of the 4 names closely associated with this space, either Petrohawk Energy (HK), Goodrich Petroleum (GDP), GMX Resources (GMXR), and Comstock Resources (CRK) would sell down to their 50 day moving average now that natural gas has finally been hit. But no mas as the charts below show.

Things are going so well, that Goodrich actually placed a 3M share offering at $64 today and the stock is trading above it. That's a sign of serious strength - this is about a 10% dilution.
  • Goodrich Petroleum Corp. late Tuesday priced its public offering of three million shares at $64 each, a slight discount to the stock's last closing price of $64.96.
  • Net proceeds, estimated at $183.9 million, will be used to pay off Goodrich's outstanding balance on its senior revolving credit facility. The funds also will be used for general corporate purposes, including capital expenditures and expansion of its activities in the Haynesville Shale.
  • Goodrich currently has about 33.4 million shares outstanding.
As an aside one of the big players in the field, Chesapeake Energy (CHK) announced a quite large 25M offering last night (the stock is trading off 4% today) but based on previous history - these are the type of breaks in the stock price you do want to buy. [Meet Mr. Gas] CHK is finally back down to it's 50 day moving average.
  • Natural gas company Chesapeake Energy Corp (CHK) said on Tuesday it plans to sell 25 million shares of its common stock in a public offering, with proceeds going to temporarily pay down debt.
  • Chesapeake also said it also expects to tap the revolving bank credit facility again to fund its plans to expand drilling and leasehold acquisition in areas including the Haynesville Shale in northern Louisiana.
  • In March, Chesapeake said Haynesville might hold as much as 20 trillion cubic feet equivalent of potential natural gas reserves.
I am now sitting here wondering do I bite the bullet and jump in one of these 4 holding their 20 day moving average at these prices (i.e. they won't go lower?) Or could take the easy way out and buy the giant, CHK. Still thinking this one through, but prefer one of the 4 smaller "pure plays" in this group - the smaller the better for buyout potential. With the market still looking mighty pathetic perhaps we get another chance at lower prices. HK @ $35, GDP @ $55, CRK @ $65 or GMXR below $60 would be a nice addition to our natural gas basket. Might be asking too much, right Gordon G?

No positions, but stalking eagerly

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