RE:RE:1.10 Aeco Phil has a business case for being exposed to AECO prices. He thinks prices will improve as LNG builds out, Enbridge and NGTL improve export capacity and rapidly growing consumption in Alberta consumes or diverts production gas from AECO.
He also likes to minimize costs - so no long term commitment for long distance shipping. If ithe plan doesn't work out he can always change that though.
They also sell into Saskatchewan and Montana so on average they were earning about a 15% premium to AECO.
The nice thing about the PNE team is that they are not married to a strategy forever. If there is a business case for change they will do it. About the only criticism I could have was they had very little hedging going into winter, but it was als disclosed as part of the plan for years. In hindsight a dividend that high should have had year round hedging.
The company can sphincter up on spending very quickly. Or launch a drill program. Or buy assets.
I trust they will get it right. By Q3 the whole basin will probably be rocking again.