Post by
mnztr on Aug 17, 2021 1:25pm
Explaination of hedging losses
The huge losses in hedging do look terrible. But this is what are. What VET has sold is similar to calls on natural gas, so they have sold forward contracts and 5-, 6, 7 $ into middle of next year covering 70% of that production. Those contracts are now MASSIVELY underwater as Euro NG is in the $20 range. But they do not represent a cash loss. All it means is that VET will have to deliver gas at that price, and the loss represent to a large degree, what they might lose out on their selling price vs market price if prices stay as high as they are today. As the calls expire and gas is delivered, this will wind down and no actual money will have to be paid by VET. Its also possible VET did purchase PUTs but in either case the outcome is roughly the same.
Comment by
EnergyWatcher55 on Aug 17, 2021 1:46pm
Have paid attention to VET's monthly presentations posted on its website? Their hedging program has been TRANSPARENT from the begining. Do your frik-in reserch!
Comment by
lashing on Aug 17, 2021 1:50pm
Here we go again. Please point out the level of hedging and please, tell me who exactly the "derivative" contracts are with? No? thats right its YOU that has no clue. Money is going in pockets, I'll wait for you to sort this out since you are a genious but all you offer so far is anger and insults.
Comment by
EnergyWatcher55 on Aug 17, 2021 1:54pm
Slide 19 of VET presentation.
Comment by
halitosis8 on Aug 17, 2021 2:51pm
it's been right in front of your eyes, Lashing. There are filing requirements and the statements are signed off by accountants. You don't get to know who the counterparties are--that's not a rational expectation. you do get the details. https://www.vermilionenergy.com/files/July_31_2021_Hedging_Summary.pdf
Comment by
mnztr on Aug 17, 2021 1:58pm
Can you say for certian that EU NG will be higher then 7 in 6 months? I should remind you NS2 is coming on line this year.