What SGY is getting for their oilGood morning,
Lots of talk on here still regarding the hedges, and I agree they are not ideal, but their really were what stopped us from going bankrupt. So in that sense I am thankful for the hedges. Let’s keep in in perspective though, current production estimate 16,500 barrels/day, Q2 hedged barrels 7,500 per day @ $53.06 Canadian WTI, Q3 hedged barrels 6,500 per day @54.62.
Spot WTI - $70
WCS discount - $14 (65% of production)
Edmonton Light discount - $4.68 (35% of production)
UD $ conversation rate - 1.2
Current Spot price SGY is receiving for barrels unhedged in Canadian funds - $72.00
So with 7500 barrels/day hedged and the remainder at todays Spot SGY receives - $58.51
With 6500 barrels/day hedged and the remainder at todays Spot SGY receives - $61.36
All that to say, the hedges are knocking down our Cash Flow, however we are still significantly above our positive free cash flow levels. Also these numbers are at $70 WTI, which I believe by the end of summer we will be closer to $80 so the numbers above will move up significantly.
Good luck to all the longs!
Kid