Crew - Catalyst
The author says it well.. consistently putting on poor hedges, because they have no choice due to the debt. Once the debt is addressed, they can relax on the hedges and have much higher torque & CF.
Debt matters.. will be a good year for Crew as debt will be paid down.. sell an asset or so & fast track this for the stock to torque up.
The relatively low increase in AFF per $0.50 increase of the gas price is related to Crew’s hedging program. 42% of the anticipated natural gas production in 2022 has already been hedged at a price of just over $3.2/mcf and that will be a ‘drag’ on the torque that could be created when using a higher natural gas price. I’d like to reiterate I’m definitely not against hedging and especially in Crew’s case with a net debt exceeding C$400M it just makes sense to protect a portion of the cash flows.