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Encana Corporation Message Board

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  • margin321 margin321 Jan 25, 2009 8:39 PM Flag

    60% of gas production hedged at $9.15

    I replied to this once but I'll try again.

    A few details.

    1618 MMCF sold forward through ALL of 2009 at $9.31.

    Puts for 516 MMCF/day that expire end of 2009 at $9.10.

    Additional package of hedges through all of 2009 that effectively give them average price of $9.15 on 60% of production for all of next year.

    They do not have anything expiring on Sept 1 - I don't know where your comments about 8 months come from.

    Think about this as well - part of ECA's hedging strategy is to sell gas forward to some big customers (utiltiies and others) who need physical delivery, absolute dependability, and fixed price. They get a premium price over what you get from hedging a few contracts. 1000 MMCF/day will do that.

    You are right that if nat gas prices stay very low forever, nat gas producers won't be the best investment. DUH! But nat gas is a cyclical industry, and there is plenty to make me think we should make increasing use of an abundant clean NA energy source if we really care about how many billions we send to saudis and others every year to buy oil.

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    • Delusional_123 or is it "Duh_123"??

      And I'll repost my message too, so that you have another chance to get it to sink in:

      "Anyway, we all agree that Encana is fukked on 40% or their gas sales and that's a fact jack! Now, without the ability to produce new hedging at comparable levels means that there will be nothing but sellers of the stock if things look weak in March. Not a pretty picture is it?

      Continue to keep your head in Eresmans butt and the rest of us will make tons of money working the swings chump."

      Once again, it is very likely that investors who are "forward" thinkers, and not just dreamers, will start to get very nervous in March when they see that there is more than enough gas out there to satisfy NA needs. You can hope that something will go seriously wrong to the supply/demand equation, but that isn't the basis for smart investing. Admit that you are too married to this play to ever make rational decisions and we can move on. Your record speaks volumes about your obsession with this play.

    • You should add "deceit" to your middle name! LOL

      Margin321 lied by stating that:
      <<<I replied to this once but I'll try again.

      A few details.

      1618 MMCF sold forward through ALL of 2009 at $9.31.

      Puts for 516 MMCF/day that expire end of 2009 at $9.10.

      Additional package of hedges through all of 2009 that effectively give them average price of $9.15 on 60% of production for all of next year.>>>

      Truth is, I'm right and you are wrong again:
      "production hedged through October 2009 at an average price of $9.13 per thousand cubic feet"

      As usual, Morgan got it right and now you need to get a calender and mark down when those hedges come off. The clock is ticking and investors don't like what they see. Earnings and revenue are going to drop off a cliff towards year-end and into 2010.

      Trade the stock!

 
ECA
23.39+0.13(+0.56%)Apr 17 4:00 PMEDT

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