After aggregating midstream, upstream, and minerals they are somewhat long natgas. However, EROC is much, MUCH MORE LONG NATGAS LIQUIDS (propane, butane,...) that are CORRELATED WITH OIL not natgas. For example, propane is trading at 0.95 a double from last year lows. This is a good sign of things to come and if the company is thinking about selling assets, these sales are not going to be distressed for sure.

Regarding the hedging of both risks

* NATGAS: at approximately $7 for the next four years (like 90% 2009 and 2010 only like 50% in 2011 and 2012) so that is more than OK.
* NGLS/OIL: more mixed like 90%+ hedged 2009-2010, and less than 25% 2011-2012. Even more, I think the prices hedged for this year are close to $90/boe vs like $60/boe so we are going to have a fall in revenues next year.

Therefore, the risky variable at the moment is oil prices. And the good news are

1. We are much more long the commodity that has behaved better
2. We are getting very close to oil prices similar to those excellent prices hedged for this year
3. We still have not hedged aggressively 2011-2012 so if the company does not gamble too much we could lock excellent revenues for those years
4. Midstream and minerals assets could be sold at non distressed assets.

So, what are the risks involved:
* COLLAPSE OF NATGAS SUPPLY: in aggregate this is not going to happen, the current problem with gas is the MORE supply coming online that is cash profitable, not long term profitable, at prices around $3. In EROCs regions in particular supply collapse could be a risk, but latest data have shown surprisingly stable levels and Granite Wash is very low cost and with current ngls prices midstream is very profitable and has the incentive to pay more to get supply.
* ARREARAGES (sp?): This is a management incentive problem. At the pace we are accumulating them, the subordinates units are becoming more like call options setting incentives for management to become speculative. For example, my main preoccupation is that they delay for too long hedging 2011-2012 oil/ngls prices. I hope that we sell some assets soon and we do not wait too long to hedge.