RE:RE:More thoughtsThank you for your kind words Kavern.
You are of course right about the NG hedging. I find I look right past NG when it comes to thinking about OBE. Yes, OBE demonstrated proactive, wise financial judgement by hedging NG over the current period of weakness, to next month.
Hedging NG from Nov to March however, is more questionable. They've incorporated this uncertainty by reducing Nov - March NG hedging from 40% (down from 75%)
NG may strengthen this winter. The number of NG rigs is much lower now than it was at the end of last year. Active oil rigs are also much lower (thus the gas from active oil rigs may decline too). Its always a pitty to miss a price spike because you sold your product early. Its a bit like missing out on a rising share price by selling too soon.
As JPM recently predicted, there may be several oil or gas crises over this decade. Like last winters NG crisis in Europe - didn't last long, but the money offered to spot sellers was incredible ($370 per BOE ish incredible).
As global oil inventories shrink (presently something like 4 billion barrels - much of which is locked up in supply chains like tankers, pipelines, and SPR's), the probability of an oil crisis appearing increases.
Sometimes these crisis events are black swans. Other times they can been seen over the horizon, then sudden appear on your door step - like the anticipated reduction in US oil production caused by the drop in US active drilling rigs more or less all this year. Or the anticipated reduction in US production caused by the declining productivity of US oil rigs, and movement from tier 1/2 ground to tier 2/3 rock.
There are so many ways for the market view of future oil supply to get hit with a shock - and with reduced global inventory (What Saudi Arabia is currently doing), those shocks have a greater probability of causing oil price spikes of uncertain duration. I don't want to miss any of these because of hedging.
I won't touch a company like Baytex for example because of their hedging. Baytex will miss out on 40% of the next year of higher oil prices (if they stay in the +$90's) because they've already sold something like 40 percent of the next years production at low prices. That only helps the executives keep their jobs - it hurts shareholders. It keeps investors like myself away.