The Importance of Hedging in the E&P Space

Turmaline is the best example of hedging in the E&P space. They've diversified their production into markets that need it like California, Korea and Washington as well,. And they've hedged their Henry Hub basis and have agreements with all the mid streamers to move their gas around. So yeah, I think so. It's easy to look at those derivative hedge losses and just kind of take them at face value and say, Oh, like this company just could have used the cash and bought back stock or paid dividends. But what you don't see, at least I don't think you see, because it's not like a gap accounting metric., he says.

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