RE:RE:RE:RE:RE:Condensate was $82.28 todayHi Ruud, my 120 @ 90% hedged question was rhetorical to point out what I think is the absurdity of believing an impairment is good in any way. Not deliberately spoiling for a fight it was just to set up the question on impairments.
I am all about rational and positive debate with out insults. I would love to hear how impairments really work and why it would be good for us. There may be a case for it, I just don't see it.
But I see I that I can be hoist on my own petard with my inflammatory statements.
RuudinFrance wrote: skiptoggle wrote: Tuco, would you say that you'd love to see impairment charges resulting form $120 condensate
if PIPE hedged 90% of production in 2020? I don' think so. Also I don't think that impairment charges in general are a good thing.
Can you explain why this would be good for shareholders and to the valuation of the company? I support the hedging program because it provides stability and that is what PIPE needs in 2020. The 46% of 2020 is a fair balance between stability and seeing the benefit of an upside. In terms of revenue lets not forget that ~50% of production is NGL. So we are looking at an earnings boost on 1/2 of 54% of production based on condensate price. Also base model prices are for $55 US WTI which is closer to $73 CDN. So yes, we are going to see a benefit from rising condensate, just temper our expectations with the fact that not all production will benefit from the increase. Conversely we are somewhat sheltered from any downturns.
Tuco110 wrote: Ruud, you keep refering back to the hedging program as a drag on revenue growth. Remember that the hedging is not at base model prices of $70 but closer to $78. You seem to be forgeting that even at hedged prices the company is making more than forecast in their production models. I agree that if condensate prices continue to raise it will result in commodity impairment charges on the financials but those are non cash accounting adjustments that don't affect cashflow. I personally would love to see impaiment charges that account for $120 condensate.
Skiptoggle:
In red: a bit unfair (spoiling for a fight?), as they wouldn't. It's a fun question though.
In blue: agreed.
In green: Any good question deserves an answer.
Tuco:
In blue: No, I don't.
In red: No, they aren't.
In green: What you win on the one hand, is lost on the other.
Safety in the more or less 50/50 division.
However, you missed the point of my post.
DD (dude donnyboy) misinforms the board.
What he writes is not true.
I know he's a jerk but he's an idiot to boot. He just ignores facts/logic/common sense.
Nevertheless,
have fun.
P.S.: Be careful when you reply to Skip's question, but please do.
Consider: "The cost of loss of face". It's not a very forgiving industry.