Kelt Exploration Ltd T.KEL

Kelt HH - AECO basis hedges

[PabloLafortune]

So Kelt has booked 40,000 MMBTU for Nov to March AECO HH basis for $1.09. It means they receive HH pricing for their natural gas hedges less US$1.09 for basis x exchnge rate less AECO = daily basis hedge gain (or loss) * 40,000. (I think its how it works - warning amateur hour).

So if  HH is $3.59, kelt receives $2.50 (USD) x 1.44 = $3.60 less AECO ($1.80) = $1.80 * 40,000 = $72,000 daily gain. . Basically double what AECO is right now. 

I have some understanding of how HH works and am comfortable with it. I have no clue how AECO works and as an investor I'm not comfortable with it. For that reason, I like HH to AECO basis hedges ( which recently was trading for US$1.90 or something like that per jamie heard on twitter due to the huge price divergence between HH and AECO).

[MyHoneyPot]

Thanks for that explanation.  I believe that AECO has been one of the worst places to sell your gas,. The analysts have positive projections for Kelt in 2025. Concensous 9.30 Hopefully 2025 will be a bit better for Kelt, low gas prices, plant delays, and infastructure issues are the story for 2024. The good thing is they have not destroyed the balance sheet, and expect that 2025 will be a

[PabloLafortune]

Merry Christmas.  AECO is a total nightmare. Drilling for dry gas in Canada, processing same at a 3rd party plant, selling 100% of your production unhedged into AECO, is the definition of complete insanity.