Happy days are here again if you are a natural gas producer! They might not last very long, but you have to take advantage of the moment.

This morning, AR, RRC and SWN all announced multi hundred million dollar placements for new debt, the proceeds of which will be used to pay off near term maturities. Reducing bankruptcy risk, even by shuffling deck chairs, is always smart.

It’s been a volatile year and so, when the getting is good and the market is open, companies need to take advantage if they want to survive. And more importantly, with the run in natural gas prices from uneconomic to economic, I hope that many learned the mistakes of the past and are hedging their 2021-2023 volumes right now to pay for completing their DUCs because here’s the deal: when only 60% of your volumes are hedges, everything you do is at spot…it may take away the upside but it’s the downside you should be protecting against so that debt isn’t so expensive when and if the market opens next time.

So, in Range’s case, though 9.25% might sound like a lot, beggars can’t be choosers. But for investors in the equity, this should raise alarm bells as to who is going to get paid and who is going to be left holding the bag (AR and SWN should announce their pricing later this month).

#hottakeoftheday