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Cabot Oil and Gas: 4Q14 earnings and big changes for 2015 (Part 5 of 6) (Continued from Part 4) Natural gas hedges
Cabot Oil and Gas Corporation (COG) has ~157.5 billion cubic feet (or bcf) of natural gas production hedged for 2015. This represents ~28% of its 2015 natural gas volumes at the mid-point of its guidance range.
Natural gas swaps
Of the hedged volumes, natural gas swaps account for 86.6 Bcf at a weighted average price of $3.95 per thousand cubic feet (or Mcf).
A swap is a derivative instrument used to hedge against the price of a commodity, which in this case is natural gas. Producers agree on a fixed price, which for COG is $3.95, for the hedged portion of their production in order to lock in or fix their cash flows. This way, E&P (exploration and production) companies can hedge their exposure to a volatile price environment.
Natural gas collars
COG has hedged the remaining 70.9 Bcf of the hedged volumes with natural gas collars. They have a weighted average floor of $3.87 per Mcf and a weighted average ceiling of $4.35 per Mcf. A collar limits the hedged portion’s downside as well upside.
Upstream companies usually enter into collars to protect their downsides.
Other companies who have hedged portions of their 2015 natural gas production include Southwest Energy (SWN) and Chesapeake Energy (CHK). These companies, including COG, are components of the Energy Select Sector SPDR ETF (XLE) and make up ~3% of the ETF. They’re also a component of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and make up ~3% of the ETF.
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Cabot Oil & Gas Corporation
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CODE : COG |
ISIN : US1270971039 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Cabot Oil & Gas is a oil exploration company based in United states of america. Cabot Oil & Gas is listed in Germany and in United States of America. Its market capitalisation is US$ 10.2 billions as of today (€ 9.0 billions). Its stock quote reached its lowest recent point on March 26, 2004 at US$ 10.00, and its highest recent level on January 14, 2022 at US$ 22.20. Cabot Oil & Gas has 460 786 236 shares outstanding. |