RE:RE:How did they lose all their money?They did not lose all the money they made in Q2 outside of what has been reported , In fact cash flows were as projected and profits were very high (probably due to a reversal of previous write downs. The increase in debt levels is probably solely due to accounting provisions for future losses on their hedge book (mark tp market) These provisions are very misleading. They will disappear if the commodity price should fall below the strike prices. On the other hand if commodity prices stay the same or go higher then they will be more than covered by the corresponding physical trade.
I am not an accountant, so if my understanding is wrong , I would appreciate being corrected by a more qualified person !!