RE:RE:RE:RE:RE:TD Earnings Estimatethepan 51,
The post I referred to stipulated ... " as a dividend payer ".
Perhaps you missed my post of the reply from Pater Scott.
We have 6 mo. of 8,000 bod and 6 months of 5,000 bod hedged at $80,
All our peers have some collars someswaps .. some puts.
Most of our peers hedged are hedged at least $10 - $25 higher than us.
A Bakken neighbour claim .... 39% hedged at $94 ..... 50% swaps, 50% collars
This disparity is unimaginable ....
Over a year this represents a significant cash flow shortfall on our part.
Both paper loss and real loss ..... any way you look at it.
thepan51 wrote:
In questioning the hedges I'd suggest having a look at the opposite scenario. That would be 100% hedged at e.g. $90 while the oil price climbs to $140. What would you say then? I'm sure it would sound like "incompetent, worst mgmnt ever, how can they hedge the full production, loosing $50 on each second barrel produced."
For each mgmnt it comes out to reducing the spikes, findig a compromise. That is, 50% hedged and 50% with the chance of gains in bull markets but risk of losses in bear markets.
Cheers,
Axel