TSX:HSE.PR.B - Post by User
Post by
Olympicon May 09, 2018 2:12pm
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Post# 28006358
Are Average Realised Prices improving?
Are Average Realised Prices improving?I am taking a deeper look into Q1 results ... I was surprised with how little the realized prices were on WTI averaging $62.87. While HSE is very much diversified, the results do not support the conclusion that its integrated operations are an adequate hedge against the WCS differential.
The Average Sales Prices Realized by HSE were slightly lower in 2018 ($40.87) than in 2017 ($41.58)? In fact, every product category had lower realized prices in Q1 2018 with the exception of natural gas. At the same time production of both crude oil/NGL was lower by 22.6 mbbls/day and gas production by 66.1 mmcf/day. On an mboe/d equivalent basis production was lower by 33.6.
Lower margins and less production ... HSE still achieves a profit! Looking forward, the WCS discount has recently bounced back ~25% from its general Q1 slump. If sustained, even a small increase in the realized price will have a positive leveraging impact on future net earnings.