RE:Still not happy with the hedgesSGY has a new "Hedging Strategy" for 2022.
The hedges for 2021 were, as we all know, horrendous... in the vicinity of $47 WTI... forced upon Surge by the major chartered banks. That's all DONE!
To give you an idea of how that translates in terms of CF, here's an example:
* Unhedged CF for Jan./21... ~$ 7M
* Unhedged CF for Jan./22... ~$28M
That's a significant increase for sure! Surge is now taking the hedges that have run out... those that were forced upon them by the banks in 2021... and has begun to layer their hedges in, with a bottom around $60 - $65 WTI. In some cases Surge is doing costless collars where they keep the upside at $80 - $85 WTI.
So they're rehedging and curtailing the downside which allows them to share in the upside price. According to PC, Surge's goal is to be 50% locked in of their net, after crown volumes and they're working toward that goal now. Their hedges are presently $20 - $25 higher when compared to last year.