Carrizo's deal won't answer any of the conspiratorial questions, but it does show the market giving a lot more short-term credit to the company able to buy up these dry gas assets at a reasonable price than to the seller trying to transition away from the natural gas story to the
The assets sold by Carrizo produce 35 million cubic feet of natural gas production per day, which when divided into the $190 million price tag, suggests a price paid of roughly $5,400 per flowing cubic feet per day.
Stephens analyst Will Green said the estimated price is significantly lower than what had been the norm in recent years, a range of $7,500 to $12,500 per flowing cubic feet per day. Peer companies have traded based on a $7,700 assumed value. Yet all of that was based on a world of $4 natural gas, a world that seems like a distant memory now.
The Carrizo deal is one of the first divestitures of dry gas assets since the historic slide in natural gas pricing began this year. While the bump to Atlas shares comes as a direct result of the impact the additional assets -- all of which will be hedged -- will have on EBITDA
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV