For some reason I thought EQT hedges a significant portion their gas production. If so, they wont benefit (at least, not as much) from spikes in natural gas prices. I have come to abhor E&Ps that hedge production. I have found that they are not consistent with hedging (that is, they "hedgulate") and wind up hedging into a price spike, ge…
For some reason I thought EQT hedges a significant portion their gas production. If so, they wont benefit (at least, not as much) from spikes in natural gas prices. I have come to abhor E&Ps that hedge production. I have found that they are not consistent with hedging (that is, they "hedgulate") and wind up hedging into a price spike, get frustrated with margin calls, listen to all the media mumbo jumbo at the top, and ultimately fail to hedge before the bottom falls out. I have gone back to tally up the hedging P&Ls for some E&Ps thru a cycle...I damn near blush at the amount of money some of these companies lost thru an entire cycle. If a company "needs" to hedge, its because they stretched the balance sheet by trying to be a little too big for their britches (another deadly sin for an E&P, but for some reason E&P companies attract personalities with big egos that want to do big deals...its nearly the perfect boom/bust industry). /end of rant
For some reason I thought EQT hedges a significant portion their gas production. If so, they wont benefit (at least, not as much) from spikes in natural gas prices. I have come to abhor E&Ps that hedge production. I have found that they are not consistent with hedging (that is, they "hedgulate") and wind up hedging into a price spike, get frustrated with margin calls, listen to all the media mumbo jumbo at the top, and ultimately fail to hedge before the bottom falls out. I have gone back to tally up the hedging P&Ls for some E&Ps thru a cycle...I damn near blush at the amount of money some of these companies lost thru an entire cycle. If a company "needs" to hedge, its because they stretched the balance sheet by trying to be a little too big for their britches (another deadly sin for an E&P, but for some reason E&P companies attract personalities with big egos that want to do big deals...its nearly the perfect boom/bust industry). /end of rant