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Bullboard - Stock Discussion Forum Athabasca Oil Corp T.ATH

Alternate Symbol(s):  ATHOF

Athabasca Oil Corporation (AOC) is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. AOC’s segments include Light Oil and Thermal Oil. The Thermal Oil segment includes the Company’s assets, liabilities and operating results for the exploration, development and production of bitumen from sand and carbonate rock formations located in the... see more

TSX:ATH - Post Discussion

Athabasca Oil Corp > Small Cap Hedging
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Post by NWOntario on Oct 10, 2021 9:24am

Small Cap Hedging

Can anyone provide insight into the realistic hedging options that a company like Athabasca has available. Do companies offering the hedges use a monthly average etc, when WTI is at the levels currently being experienced where there is momentum etc, are $70 hedges actually available? I imagine the short term vs long term hedges are quite different as longer term security means paying the price of lower hedges. But how low? Eric Nuttal has been very clear in his posts that $70 is probably the realistic floor and $80 is to early for longer term sustainable pricing. Without discussing the momentum drivers of countries/industry switching from gas to
oil, hurricane season, a cold winter etc as speculation drives the pricing up or down. What would a small company like Ath actually have at their access for
6-12 month hedges. I feel like we are continually disappointed at earnings due to hedging and the actual lack of FCF being generated due to our expectations with Eric's illustration charts. If we come down to earth about the Q3 2021, what should we be expecting?
Comment by Chris007 on Oct 10, 2021 1:45pm
The 2022 strip is averaging around $74 WTI last time I checked...obviously higher prices in the near term, lower further out (as per the typical backwardation structure in a "tighter" market). https://www.cmegroup.com/markets/energy/crude-oil/light-sweet-crude.quotes.html As per slide 5 of their presentation (in regard to the company's hedging strategy): RISK MANAGEMENT o Robust ...more  
Comment by Chris007 on Oct 10, 2021 2:11pm
Overall, ATH is a decent value stock pick, even among energy stocks (though i guess one can easily classify the whole sector as "value"). The stock price is still ridiculously beaten up, even with the bounce from the bottom, and has room to run in this price environment. Bottom line...in a robust price environment like this, its pretty difficult for any management team  in the ...more  
Comment by Nothingmatters on Oct 10, 2021 5:34pm
Thats why i bought in heavy... i was thinking they are doing an assest sale. My biggest fear or stock dilution (upto an extent). So this deal is not that bad according to me...In this price environment, ath is cheap definitely.
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