Veren Inc T.VRN

Joe

[soundandfury]

With 36% hedged.......64% unhedged..........for every $1.00 oil prices go up.........cpg adjusted funds flow per barrel goes up 64 cents per barrel......... from $80.00 to $120.00 ........cpg adjusted funds flow per barrel went up $25.00 vs $40.00 if cpg was unhedged...........its not as if cpg does not benefit .......just not a 100% correlation but 64% correlation

[BigJoe778]

Hedging is a tool used to protect them from volatility and low prices. There is currently no benefit to their hedges. 

[Moemoney42]

Yes key word "currently" I'm sure the futures contracts could look different in a quarter or two..?? Just a guess..?

[BigJoe778]

Moe......are you saying you think the price of a barrel will be under $60-80usd in a quarter or two? This is the ceiling for the various hedges they have in place using collars,swaps and 3 way collars on 46.75kbd for all of 2022. When the price drops below this then and only then do the hedges become an advantage. 

[Moemoney42]

No not really.. I'm thinking the price could soften though which will help but not eliminate the losses.. then looking out to 2023.. they might be able to hedge at even higher prices to guarantee even better margins.. its a cr@p shoot to say the least, but I do think they have the ability to stabalize funds flow at reasonable levels without too much risk.. sure they might miss a bit of the