RBN Energy has a nice piece on US oil producers’ hedging activity here: https://rbnenergy.com/lifelines-us-producers-boost-oil-hedges-to-backstop-accelerated-capital-investment
Here is a table showing increased hedging of 2017 production from 3rd to 4th quarter, 2016:
Here are some comments, but do read the whole thing:
“Risk tolerance varies widely from company to company. Historically, the largest and financially strongest companies have put in place no or minimal hedging, while smaller producers have been much more aggressive in protecting future revenues.”
“A second major issue to discuss in analyzing oil hedging, beyond the percentage of production protected, is the average strike price of the transactions. In this regard, this new period of renewed hedging activity is very different from those bygone days of $100/bbl crude oil prices. Now, the futures curves are largely flat, so the average futures price from now to December 2022 is $49.60/bbl (Friday’s close). The good news, as we explain in our Piranha! study, is that many E&P companies operating in the right geographies can generate healthy returns at that price level after narrowing their focus to core areas of the most productive resource plays and taking advantage of lower service costs and rising drilling efficiencies. Two-thirds of 2017 E&P capital investment is allocated to just five plays: the Permian, Eagle Ford, SCOOP/STACK, Marcellus and Bakken. Drilling and completion and lease operating expenses (LOEs—see our LOE-down series) have fallen more than 50% since year-end 2014 in these plays. As a result, most E&Ps have been able to balance spending and cash flow; in 2016, the median company investment exceeded cash flow by just 5%. The increase in 2017 hedging protection will help protect producers and allow them to fund their higher capital investment to drive production growth.”
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