08/29/22 12:26 PM

#17690 RE: zenvesting #17689

Has to be one of the best calls of the year in terms of precision and timing. Outstanding work.


08/29/22 1:53 PM

#17691 RE: zenvesting #17689

VET +2.8% to US$30.01

One thing I read about VET that encourages me is their hedging. I normally hate hedging because it ensures cashflow but typically takes away upside.

But the prices in Europe for ngas are unsustainable. Who can afford $400/barrel oil/ngas???

So VET has hedges that were required for the Corrib purchase. The hedges will likely fall off as most of the purchase price is going to be eliminated by the time the deal closes. VET gets to deduct the profits from 1/22 until the deal closes so instead of paying $600 million, they will likely owe 150million at closing! What a steal!

Anyway VET is putting on hedges now to ensure they get the elevated pricing for awhile longer. One of these days, the floor is going to drop away but VET should be somewhat protected.