Introduction
There has been discussion recently surrounding the prospects for higher gas prices as a by-product of lower oil production following the unprecedented demand destruction from the coronavirus and associated severe recession. This would be a very welcome development for Goodrich Petroleum (GDP), whose production is almost entirely comprised of gas instead of oil. Although the potential upside if gas prices actually increase may be enticing, it is important to counteract this bullishness with a reality check regarding their financial position and thus the associated investment risks.
Cash Flows & Debt
Thankfully, the