RE:"Ohhh, butt the HEDGE BOOK!!" Where'd the NG experts go?Peyto is going up because of its daylight robbery of Repsols assets not because of their hedge books.
If anything their hedgebook is making them make the same mistakes. Deploying cash into growth at negative rates of return. They should at least be leaving those wells TIL and waiting to turn them on in the winter. The hedges are in the money whether they produce into them or not. They could monetize the ones for this year, pay off several hundred million dollars of debt, shut in some money losing production (cash costs higher than strip) and defer Capex until Q3....
But yeah let's take these hedges that are now in the black and use it to generate unhedged growth... putting all the initial production into a flooded market.
It wasn't smart then, and it's not smart now. I have told Darren this before, and he told me his job isn't to take a position on gas prices. That may be true but the hedges have an NPV and that mpneynis fungible. The decision to deploy capital should be based on the unhedged position, as it's an independent choice. I am still one of their largest shareholders for the asset base and the fact that no company is perfect.