Old Hedge: Between Sep20 and March 22 deliver 18o koz at $2062. Now: deliver 192koz at average of $2072. Cost: Total new hedge minus old hedge revenue divided by additional koz's = $2230. current price lets say 2700 - 2230 * 12000 = 5.6m. Now obviously you have to calculate the benefits of earlier cash flow - but with the current GP the company shouldn't have plenty of cash flow and money itself is really very cheap. So current cost 5.6m but could be more if the GP increases. I am always stunt how company's like WGX can spin a cost into a positive. Citibank must be laughing all the way. I would have left the hedges run out at least for a while and see what happens. Citibank might get itchy and come up with better offers. Wishful thinking.
WGX Price at posting:
$2.19 Sentiment: None Disclosure: Not Held
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