Post by
RagingBull3 on Oct 08, 2021 11:01am
WTI hits $80 ...... I would recommend putting some HEDGES in
at $80+.... Maybe 20% of production? When it hits $90, another 20%. But that's it, maximum of 40% of production I would hedge.
Once Cash Flow and PROFITS locked in for next couple years.... it's easy to plan for debt reduction, dividends, CapEx...etc.
If oil continues up, $100.... free to increase CapEx and production as debt is taken care of by the hedges.
If oil crashes.... free to cut CapEx and production if it becomes unprofitable.... This SECTOR F#$ing CRAZY, oil goes negative but still companies pumping and even increasing production bleeding shareholders their investment (share price crash). If it's unprofitable, reduce/stop pumping!!! But since the way "things" are done here, this sector had no choice but continue pumping even if prices went negative.
Lesson..... get rid of DEBT.
All just my opinion/view/thinking
Comment by
lashing on Oct 08, 2021 2:02pm
Copying eric nuttall trying to look smart? Everyone else reads his posts too you know.
Comment by
oilandgasmick on Oct 08, 2021 2:19pm
Agreed-because you know that this price level is very optimistic and there will be a retracement. Hedges limit the upside but they help to achieve your shorter term goals and right now that is debt reduction. 6 months ago nobody really thought that the company would reach its 8B target by mid 2022. Heges virtually assure that will happen.
Comment by
mrbb on Oct 08, 2021 2:33pm
this can be a multi year energy bull run. It was created from years of oil/gas bashing and investment curtailment. Not all people undetstood it yet. The hot new slogan lately is ESG, all western virtue signaling, as if opec, russia, china, africa give a rat a55 about ESG. China is burning every lump of coal they can get their hands on.