Kosmos presentation (lot`s of Senegal), page-7

Like many transactions, an oil hedge could be done on-market or off-market.
If you want to be sure you can get oil for say $45 next year, and I need to be sure I can sell oil for no less than $45 next year, then you and I could enter into a supply contract on those terms. (Why $45? Well the on-market futures price gives us a guide as to where buyers and sellers are meeting. But hey, pick a number, it's a free world. ) This is not illegal, complicated or unusual.
The fact that one party may eventually have some regrets about the upside/downside foregone is entirely irrelevant. Better to entertain regrets than the bailiff. That's why it's called hedging not speculating.
Given your usual level of erudition, I can not understand your confusion.