Excel Producer Hedge

Excel Producer Hedge - Basis at San Juan Producer Energy...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Basis at 10/23/06 San Juan Producer Energy Hedging Producer is naturally LONG natural gas Physical = F naturally LONG basis Producer is Assume: Producer pumps natual gas 100,000 mmbtuus per day translate in HH contracts 10 Time Nov-07 Nov-08 366 days Nov-08 Future $6.7600 Potential Profits at HH $247,416,000 SJ SJ Basis Swap Nov-08 -$1.1200 SJ Price $5.6400 Potential Profits at SJ $206,424,000.00 Basis Risk -$40,992,000.00 If Basis Narrows -$1.6200 $5.1400 $188,124,000.00 -$59,292,000.00 Basis Gain -$18,300,000.00 If Basis Widens -$0.6200 ($0.62) $6.1400 ($1.12) $224,724,000.00 ($1.62) -$22,692,000.00 Basis Loss $18,300,000.00 Usually neg CA: position
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Future + Basis (location) s naturally LONG Nat Gas and LONG Basis want basis more positive $5.6400 -$1.1200 HH $9.0210 ($22,692,000.00) $18,300,000.00 ($40,992,000.00) ($59,292,000.00) ($18,300,000.00) g. as it is a big production area with not a lot demand n basis
Background image of page 2
Basis at 10/23/06 Transco Zone 6 Oct-jan 07 Energy Hedging Producer is naturally LONG
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/10/2008 for the course FINC 782 taught by Professor Mcnew during the Spring '08 term at Tulane.

Page1 / 7

Excel Producer Hedge - Basis at San Juan Producer Energy...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online