I see President Putin no longer plays Monopoly during his Christmas holidays


seems he prefers Risk & Warhammer
And with the Natural Gas price in Europe going more vertical than a meme stock
Shouldn’t we all buy Energy ETFs and get some exposure?
No no, that’s 1st order thinking
What do you mean?
Well, you know last quarter when the US natural gas price ran from $3.81 to $6.07
Well, lots of nat gas companies lost truckloads of money
Yes, like EQT Corporation, the largest US nat gas producer
Generated $1.8bn in Q3 sales
but blew $3.2bn in derivative losses
Meaning they reported negative revenue of $1.5bn
And by the time the numbers got to the bottom line, it was a
mind-blowing $2bn loss
Their derivative liability had ballooned to $5.7bn on the balance sheet
And other “real debt” increased by $1.3bn since December 2020
These guys (like many peers) thought they’d
manage their risk of nat gas prices falling
but completely forgot about the risk of nat gas prices rising
and used things the industry calls
“Costless collars” – buy puts & sell calls
or as EQT describes their hedge strategy
“Risk mitigation tool to de-risk cash flow & manage leverage”
The busiest person in the company must be the company secretary because the share count was up 48% y/y after a few deals
yet production was only up 33% y/y
meaning lower “production per share”
Doesn’t reflect well on management, does it?
Who spent $2.9bn buying another producer, Alta Resources
Which lost $129m in Q3
I mean what’s the point?
Here’s the funny part
they referenced “free cash flow” 25x in their conference call
Ok, admittedly they were talking about free cash flow “projections”
But it’s always a good idea to see some evidence of,
before believing
With their paltry $23k of cash on their balance sheet & exploding debt
it looks to me like they know as much about free cash flow as their PayPals

I know their “projections” are in 2023 when their “hedges roll off”
But if it were up to me, management’s heads would have “rolled off” long before then
The same people who:
On 18th November announced they had issued $222m of fresh shares at $20.50 per share
But less than a month later on 13th December
Announced they were launching a buy-back program for $1bn?
When the share price was only marginally lower at $18.55
Sure, nat gas had pulled back to $3.75 so there would have been some freed-up margin but
rather than spend any of this reducing their risk by buying back some “costless” calls ahead of the next nat gas rally, it’s
“let’s buyback stock”
Then again, if you’ve got options in a share price and no options in a “costless” call
Which one is going to get your attention?
Sounds scary, who owns this thing?
Usual suspects – Top 3 shareholders are all Passive Managers
But truth always wins
So it’s only a matter of time before their performance “rolls off”