Kelt Exploration Ltd T.KEL

Well Economics

[MyHoneyPot]

Everyone has a Drum to Beat...

Progress Spirit River (Charlie Lake)
The Charlie lake wells at Spirit River, are coming in at 3.5 million dollars. So the payback on these wells is months and this area Progress/Spirit River has been cash flowing the entire company.  So  in this case you are not really hedging to reduce welll risk, you are more or less hedging to protect Cash Flow

Pouce Coupe (Charlie Lake)
Now Pouce Coupe is a band new Charlie Lake area, so twice as big as Progress Spirit River, likely with similar costs, So this is a new cash cow area that really is not on the radar screen. Expect more highly economical wells. 

Wembley/Pipestone (Charlie Lake)
These wells are a little more expensive, I believe 5.5 million but the prize is bigger and it is just more stacked layer in an asset area where Montney is the primary target. 70% oil 1500 boe/day IP30

So hedging is a risk management tool, and everyones risk is different, if they are drilling wells for 3.5 million that pay out in three months not a lot of risk, so i believe your risk management needs to be done in conjunction with your spending (Kelt pretty well just spends CF), you well costs (Spirit river 3 months payout),

Kelts debt which is very marginal considering they project 50,000 boe/day very soon, and the CEO is a local billionaire.  

So even with a 100 million in debt, producing 50,000 boe/day i think Debt to Cashflow ratios will be low. 

There is alway a cost associated with Hedging, so hedging programs are not the same for every company.

I can remember companies that hedged $40 oil, it did not work out to well for them. 

MHP
IMHO

[ztransforms173]

- HEDGING is an INSURANCE LOSER'S GAME that OVER the LONG 'should' be AVOIDED but you HIT the JACKPOT when you SKIP BANKRUPTCY by having them IN PLACE - look at CVE: * BILLIONS of DOLLARS in SHAREHOLDER VALUE DESTRUCTION in order to GET LOANS from BANKS that FORCED HEDGES on them when they made ACQUISITIONS - YES, hedges are a VITAL RISK MANGEMENT TOOL but IF you have the FINANCIAL

[MorganEarp]

Pii...pot you stated this...."Kelts debt which is very marginal considering they project 50,000 boe/day very soon, and the CEO is a local billionaire." I am not saying you are wrong...but I amn sure you are most used to being wrong....Where did you find this information and provide proof of it on this board with a link.....Otherwise just more BLATANT HOGWASH PUMPING FROM YOU..