RE:Hedging impactsLike if oil was still at 60-62 and the future curves didnt rise like they have....
BNE just would have bad realized loss but the unrealized loss part would have not been that bad as they would have done the revalue at end of Q1.
Realized Gain/loss - which is current q impact of the hedges
Unrelaized Gain/loss - so Q1 would have shown some of BNE future impacts of hedging here but oil is going to be so much higher for all of the Quarters BNE is hedged. Even some of the 2022 will be out of the money and it is shown here.
kavern23 wrote: I was reading seeking alpha and this joker named Micheal Blair writing about OBE and BNE is also mentioned. Like alot of people he doesn't understand the financial implications of hedging...he thinks BNE took alot of the impact in Q1...
This is how it works for the people that don't know.....
Yes current Q risk management contractrs only effect the CF statement after adjustments but on the income side it hits twice....
You have the:
Realized Gain/loss - which is current q impact of the hedges
Unrelaized Gain/loss - so Q1 would have shown some of BNE future impacts of hedging here but oil is going to be so much higher for all of the Quarters BNE is hedged. Even some of the 2022 will be out of the money and it is shown here.
Combined this goes on the income statement.
Inplay oil at least doesnt have a hit on the unrealized gain/losses part very hard...as realized gain will be the brute of it for them.
But BNE really is getting er double as having that 2022 sh*t on the books in a rising energy market is bad man.
Every quarter you get revalued on these risk management conmtracts.