Stock Analysts Wait to See if NE Drillers are Hedging Gas @ $3/Mcf

hedgingOne company that has been really smart and savvy when it comes to hedging is Antero Resources. Earlier this year when the average price of natural gas was selling for under $3 per thousand cubic feet (Mcf) on the benchmark Henry Hub, Antero averaged a sale price of $4.54/Mcf–in the Marcellus/Utica! Where prices are always BELOW the Henry Hub (see Antero Resources 1Q16: Production Up 18%, Sells Gas for $4.54/Mcf). The reason Antero can sell natgas at a higher price is because they previously contracted with buyers months (sometimes years) in advance to sell the gas at the higher price. Such contracts are called hedging. Stock analysts are eagerly waiting to see if not only Antero but other Marcellus/Utica drillers have hedged their upcoming sales. This is earnings report season, which happens every three months like clockwork. What will the earnings reports show with respect to hedging? Analysts are holding their breath (and their money), waiting to see…

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