RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:No Hedge Here - Fast Becoming The Envy of The PatchClam.
I looked into those Aeco 7a/HH basis contracts.
You can find the current basis at
https://www.theice.com/marketdata/reports/254 Site is hard to use but it looks like current month is HH less $2.40 US
meaning if you bought that contract you would be locking in HH less $2.40 for 1 month.
$7.80 US gas to less US $2.40 is $5.40 US which equates to the current ~7.00 AECO price today.
I think that contract is what you have to keep an eye on if you are worried about this hedge.
BIR has these contracts rolling off every month for 4 years at HH less $1.20.
I am thinking they have an asset of 147,000 mmbtu x $1.20 US per day as long as that current month
basis contract stays in the US $2.40 range. The contract drops in price as you get closer to the end of the year but for now it looks like they getting and extra $250,000 per day profits from these contracts.
Hope my thinking and numbers are OK - but its does look like they will make extra money as long
as the AECO 7A price lags.
If you want to go to the website and look yourself the the contract product name looks to be
NGX Fin BS, LD1 for 7A, (US/MM), AB-NIT