RE:RE:RE:Interesting comments todayPeyto has HH basis hedges at (.75) and (.93) I believe for Q4 and Q1. The avg forward from Nov to Apr has been moving up and (not quite Q4/Q1) is now at $3.47. on that basis alone (no pun intended) which is effectively an unhedged view and with WTI moving past Q1 levels - quite important to Peyto - that would leave a guess of $23.50 of realization IF everything was sold at HH strip minus basis (which fortunately it is not). Their 2023 goal was cash and capex of $18.18. Leaves $5.32 per boe x 100,000 = $194MM vs a ~ $230MM dividend. Again this is an unhedged view of what is probably the worst realization at the worst time for HH.
HH is so interesting. Next two weeks weather forecast very hot across the US, some days may actually draw on storage. Yet spot is stable to slight down whereas the forwards November and beyond are clearly firming up. the influence of BOIL, UNG and HNU - a paradise for shorts - is undeniable now IMO. In the case of BOIL in 2 weeks they have to roll over - sell a lot of Sept contracts and buy November ones. See Shep on twitter.
This is also why the hedging approach taken by Peyto is generally the correct one. You simply can't rely on a properly functioning and liquid forward contract market when a huge portion are ETFs where shorts make a small fortune when the market is in contango.