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Bullboard - Stock Discussion Forum AltaGas Ltd T.ALA

Alternate Symbol(s):  T.ALA.PR.B | T.ALA.PR.G | T.ALA.PR.H | ATGPF | AGASF | ATGAF | ATGFF | T.ALA.PR.A

AltaGas Ltd. is a Canada-based energy infrastructure company that connects natural gas and natural gas liquids (NGLs) to domestic and global markets. The Company’s segments include Utilities and Midstream. Its Utilities segment owns and operates franchised, rate-regulated natural gas distribution and storage utilities, which includes four utilities that operate across five United States... see more

TSX:ALA - Post Discussion

AltaGas Ltd > You were asking about Hedging Effect
View:
Post by Johnwith30years on Oct 06, 2021 10:45am

You were asking about Hedging Effect

Here are direct quotesd from last quarter report. " The strong underlying fundamentals of the current commodity price environment were again seen in the quarter. Total gas processing volumes were up 12% year-over-year while fractionation volumes were up 35% year-over-year. Similar to the first quarter, producers in the Montney region continue to execute on active drilling programs and ramp up production to meet take-or-pay commitments, driving increased throughput at our expanded Townsend and North Pine facilities. Within the Montney we continue to see the strongest acceleration in development activity north of the Peace River, which is in line with our core footprint in NEBC. Processing and fractionation volumes at AltaGas' non-Montney facilities also increased during the quarter, driven by improved commodity prices and resulting increased production volumes. The Midstream segment also benefited from stronger Alberta power prices, which generated higher earnings from the cogeneration plants at Harmattan during the quarter.

The average spot NGL frac spread for the second quarter of 2021 was $20.54/Bbl, however due to AltaGas' hedging program the Company's realized frac spread averaged approximately $11.59/Bbl (net of $13.41/Bbl in transportation costs), as 84% of AltaGas' frac exposed volumes were hedged at $25.00/Bbl. AltaGas remains well hedged through 2021 with approximately 98% of total expected frac exposed volumes realized or collectively hedged at approximately $25.70/Bbl and 79% of 2021 total expected global export volumes realized, tolled or collectively hedged. The latter includes an average FEI to North American financial hedge price average approximately US$10.79/Bbl, including both propane and butane for the hedged and non-tolled volumes.

2021 Midstream Hedge Program

Comment by WalterWhy on Oct 06, 2021 11:31am
Thanks for posting that, John.  It seemed a bit odd to me that ALA drifted lower as natural gas prices skyrocketed, but now I know why.  Unfortunately, I see that ALA has been drifting lower as natural gas prices come back down.  
Comment by Johnwith30years on Oct 06, 2021 11:37am
I think you will find the overall results and comments associated with the third quarter comments will be constructive on the stock price and especially as we move into their best quarters.  Any surprise asset sales or speciual dividend or estimates for next years EBITDA will provide a nice boost.
Comment by Johnwith30years on Oct 06, 2021 11:59am
Hi Walter:   When you read the second quarter releases and financial report you will see that there is both a hedging effect and a volume effect.  Overall when demand is strong for their products the overall pricing environment has a positive effec ton their volumes and their earnings  - the effect of the hedging is that they do not make out like bandits when prices rise but ...more  
Comment by WalterWhy on Oct 08, 2021 4:47pm
Thanks again, John.  Hopefully the next 30 days brings a positive report out of their earnings.
Comment by Blueswin on Oct 06, 2021 1:46pm
John - thank you for posting this it was very helpful concerning what happens with the higher prices. I took a full postion this morning @ 24.93. Back on the Altagas train!
Comment by Johnwith30years on Oct 06, 2021 2:34pm
You should be doing well by end of year and sooner.  I added as well even though I am at limit of position size for my account.  GL  There will be volatility but onward.. :)
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