RE:AECO soaring past $8.00Its $4.74 May-Oct 2022 (about 43.4% hedged).
Its unfortunate to be paying royalties on $8 when you have locked in $4.74!
Its nice to see gas prices north of $8 for the other 56.5%.
Average nat gas price for OBE in Q1 was $4.96.
Thats about a $100,000 more per day (before royalties), on the unhedged gas. Or about $9.4 million if to stretched that over a quarter.
Their FCF in Q2 will depend on how much capex they spend
Their fund flow will be much better.
Liquids production will increase about 10% on average between Q1 and Q2.
Liquid Sales prices will be up (too early to know by how much), but 10% or more.
Gas sales prices will be up (too early to know by how much) - you can see above that nat gas is adding a material amount.
Hedging costs will be much lower - as of two days ago they had only hedged Oil in May at 4000 boe at $133/boe. This suggests they have changed their hedging strategy, by potentially suspending hedges, and certainly reducing them (those May hedges would be a few weeks old - on April 12 they had 500 boe hedged in May)
Put that lot together, and you get FFO in Q2 of $140-150 million.
This is before a share price performance bonus - which is nothing right now, given that the present share price is less than the ending Q1 share price. It may remain low if much of the share price performance bonus has reached its caps as stated in the Q1 release.
FCF will essentially be that number less capex, and capex is going to be small in Q2 ($5-20 million)