RE:Explaination of hedging lossesStir that koolaid
any sales of gas at $7 etc is a massive loss of REAL CASH that wonot pay down debt, wont may me, wont pay you.
This company lied so many times in the past and we just exposed them yet again for having a hedging programs far beyond what they stated outright or even alluded to.
I call BS. These "derivatives" were put in place in the PRESENT to line pockets at VET and rape shareholders.
mnztr wrote:
The huge losses in hedging do look terrible. But this is what are. What VET has sold is similar to calls on natural gas, so they have sold forward contracts and 5-, 6, 7 $ into middle of next year covering 70% of that production. Those contracts are now MASSIVELY underwater as Euro NG is in the $20 range. But they do not represent a cash loss. All it means is that VET will have to deliver gas at that price, and the loss represent to a large degree, what they might lose out on their selling price vs market price if prices stay as high as they are today. As the calls expire and gas is delivered, this will wind down and no actual money will have to be paid by VET. Its also possible VET did purchase PUTs but in either case the outcome is roughly the same.