For instance, a company called Quicksilver Resources (KWK, Financial). I’ve no idea how and why it came onto my screen. Another reject. Very good reputation, family controlled, natural gas, making a lot of money on their hedges. I e-mailed the investor relations guy and he said, ‘I’m happy to get on the phone and talk to you about the company.’ I said, ‘That will be great. But before we do that, I just have two questions. Maybe you have an e-mail answer for me which would be quicker.’ Again, wanting to have the written communication before the verbal communication because I know this guy can sell the pants off me. ‘I’m having trouble understanding how you have been so successful at hedging over so many years.’ The price at which they’re selling the natural gas is at $2.60 or $2.70 but it’s coming in with the hedges at $5. But if you’re doing that year after year after year these hedges must cost a lot of money and I just couldn’t figure out where the cash was coming from. And I said, ‘Could you tell me what your all-in cost of production is?’ No response. That shouldn’t take more than a paragraph to answer. My conclusion was that their cost of production was way higher than they’d like it to be. If you’re doing anything, if you’re half doing stuff right, you know that number and you’re trying to allocate resources based on it because some wells are high cost of production and some wells are lower cost and obviously you decide where to go based on those costs. I knew I didn’t have to go any further.
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