RE:RE:Why did Cenovus hedge majority of production at $50?ferret_ca wrote:
they didn't really have a choice on the hedging, the banks would have demanded it for guarrantees on the money they borrowed for the conoco deal. these will wind down and people will look past it,
most of the hedges wind down at the end of the 2nd q which is the end of june to only 37% of production being hedged at that time so things look pretty good here, massive upside imho. looking very good today.
cheers ferret
I dont think we should let the previous management off that easy. Sure, they needed to hedge but they made terrible hedges. They basically hedged WTI but not WCS. So, they had to buy/sell WTI at hedged price while continuing to get low prices for WCS. It was essentially a perfect storm but really poorly done to hedge only a product you don’t produce.