I've just spoken with the company regarding the hedge. The way it was explained to me is that the hedge can be regarded as a gross hedge on gross production, as the Company has stated, or as a net hedge on net production. Byron has stated they have put in a 475 barrels of oil hedge on approximately a gross production of 1600 barrels of oil. It is equally accurate to express the hedge in terms of net barrels of oil on net production. The % hedge is the same therefore, if Byron average NRI is, for example 80%, then the hedge requirement is 380 net barrels against a net production of 1,280 barrels of oil. I guess the Company thought it was simpler to express it in gross terms. This seems to me to be a better deal than having 475 barrels hedged against the net production of 1280 barrels of oil.
BYE Price at posting:
8.4¢ Sentiment: Hold Disclosure: Held