Excel Producer Hedge

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

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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
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Future + Basis (location) 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
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Basis at 10/23/06 Transco Zone 6 Oct-jan 07 Energy Hedging Producer is naturally LONG natural gas naturally LONG basis Assume: Producer pumps natual gas 100,000 mmbtuus per day translate in HH contracts 10 Time Oct-06 Jan-07 62 days Jan-07 Future $7.8990 Potential Profits at HH $48,973,800 SJ Basis Swap Jan-07 $4.0150 SJ Price
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