Natural Gas Hedges??
Here's an article I'm trying to understand: HOUSTON, Feb. 3 /PRNewswire-FirstCall/ -- Ultra Petroleum Corp. (NYSE: UPL - News) today announces additional 2009 and 2010 natural gas hedges. The total net volume hedged for 2009 currently is 93.0 Bcf at an average realized price of $5.81 per Mcf, and in 2010 the total net volume hedged currently is 6.8 Bcf at an average realized price of $5.50 per Mcf.
In plain English, what does it mean when the company is "hedged currently is 6.8 Bcf at an average realized price of $5.50 per Mcf."?
In plain English, what does it mean when the company is "hedged currently is 6.8 Bcf at an average realized price of $5.50 per Mcf."?
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Permalink Reply by Les Bamburg on -
W&A, it just means Ultra has locked in the price of 6.8 Bcf (billion cubic feet) of gas they plan to produce in 2010 at $5.50 per Mcf (thousand cubic feet). O&G companies will do that with some percentage of their anticipated production to take away the gas price risk. I hope that helps.
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