Normally it wouldn't be your choice not to hedge. The financiers normally make it a condition for the financing to protect their own position. Even more so when it is an unproven producer. The big boys are normally the only ones who can dictate terms. But to your point, clearly at the time Paribas thought there was heaps of comfort built in. They got caught with their pants down as well with the oil price...curiously though, why would you not hedge to derisk the company's return to producing? If you have the opportunity to protect the business going forward, you should. If it was solely your money and venture I bet you would. Human nature, different view on risk when it's other people's money, especially when you are way behind on the SP needed to get your options in the money, of course you'd expose others money to more risk for exposure to more potential upside if you are the beneficiary of the outcome...
TAP Price at posting:
36.5¢ Sentiment: None Disclosure: Held
