Welcome to the Connacher Oil and Gas Hub on AGORACOM

Connacher is a growing exploration, development and production company with a focus on producing bitumen and expanding its in-situ oil sands projects located near Fort McMurray, Alberta

Free
Message: Hedging 2010

"If you are bullish on the oil prices it is much more profitable to sell your product at spot prices."

This is very obvious, which no-body could/should/would argue. A week and a half ago when oil was in low $70's it would be making that much per day. Rolling the dice is fine when you are making money or winning. To me and maybe only me, this is as good a time as any to protect your downside. WTI can easily slide as drops are normally quicker then climbs.

I don't believe there is a whole lot to gain vs the potential loss that CLL faces on oil pricing. Oil inventories seem to be high, OPEC can increase production quickly and the economy is still very shaky. An increase of 129 bbl/d at $80 would easily make up $300,000 month.

A hedge above $80 may not make as much money if prices go up, but it will still make money, and I don't know of anybody going broke when they make money and maintain positive cash flows.

Share
New Message
Please login to post a reply