Africa Oil Corp. T.AOI

Hedges

[Suppe11]

Here we are. The future price of oil is near the so called "triggers" for the Prime hedging strategy.
How does it work ? Hedge 70%/12 month now or different triggers ?

[Malpeque2]

That is a very good question.     How DO these hedges work?       Do they work by the expected volume and time of each forward cargoe?     What is the "trigger" price for each forward cargoe,  when is it established,  and what becomes the "sale" price in the future based on the "trigger" price.  I think

[firstworld]

There is nothing for AOI to disclose since they are not involved in the Prime operations. The hedges are custom to each customer but obviously with spot market futures price oil dropping 40%  since peak I expect all there hedges have triggered. They missed the boat.  Hoepfully they can sell 70% of next 12 mth production at $60 bbl and keep the balance for $400 bbl so whatever outcome

[carbide]

Nope, we don't even know that.  It says "circa 80%".  So nothing about this hedging agreement is given in any detail, except the band of 50-70% of next 12 months, on a rolling basis, and that the instruction is "non-revocable".  So who knows what the terms of the deal are?  Maybe an off-balance-sheet VIE with Nigerian barges.

[toptiger]

must be really close, or was close, but i think the trigger is on a cargo by cargo basis