RE:RE:RE:RE:New presentation outTerribleEng,
Couple of thoughts to add.
1. I dont believe reserve auditors factor in hedging in their PDP calculations. From an investor standpoint of course it makes sense to calculate the value of the hedge to include in a NAV 10%. With that said we are talking about ~50% of 3 years of production being hedged VS 20+ years of natural gas reserves. When the commodity price moves the re-rating of the 20+ years of reserves outweighs the change in the value of the hedges by a significant margin.
2. I am a little unclear on the particulars of SEC vs NI51-101. However I would say if you are only paying attention to Proved Developed Producing values in a NI 51-101 than they are comparable. If you look at 1P reserves than I believe it is not comparable. Happy to have someone refresh my memory on this.
3. As far as price deck assumptions go, you have pulled the correct commodity price deck for AECO however have missed that the front year AECO price assumption is $1.9 AECO. PEY's price deck from InSite is actual more conservative than Sproule or GLJ who price AECO in 2019 at $2.02 and $1.92 respectively. When PEY goes to update their price deck as long as the front year $AECO is equal or better than $1.9 front year used last year there should be re-rating of reserves upwards.
Ultimately any of these natural gas producers are a play on natural gas prices. If investors are putting money in these names today it's because they have a belief that prices going forward should be more stable and positive for producers going forward. Losing money on hedges is a bit of an indicator that the pricing dynamics have improved. My key question back to you is what would you rather own: A company trading below PDP NAV or a company trading at PDP NAV, if both companies are using the same commodity price deck for reserves?