Dover
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Sun Jul-20-08 05:12 PM
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Need some help reading this report |
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Edited on Sun Jul-20-08 05:59 PM by Dover
This is a report from Concho Oil. On page 23 they discuss hedges, or rather a 'hedging schedule'. Can anyone explain that to me, and what a 'hedging schedule' is? Do oil companies create their own hedges or how does that work? http://phx.corporate-ir.net/phoenix.zhtml?c=211775&p=irol-presentationshttp://media.corporate-ir.net/media_files/irol/21/211775/UBS%20Global%20Oil%20%20Gas%20Conf%20%20(May%202008).pdf
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woolldog
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Tue Jul-22-08 04:43 AM
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Edited on Tue Jul-22-08 04:46 AM by woolldog
is just an appendix at the end of a document listing certain information. Frequently in legal documents you have various "schedules" appended at the end that deal in detail with a wide range of issues not dealt with in the main body of the document.
In this case, "hedging schedule" is simply a listing of all the hedging transactions the company has open at the moment.
You can create your own hedge sure. For example if I know I'm going to be paid a year from now in euros (say 15,000 euros) and I want to lock in the current exchange rate (because I live in the US and I'm scared the dollar will depreciate further in between now and the time I'm paid), I can go into the market and sell 15,000 euros. That would be a very simple way to hedge my exposure to the dollar depreciating.
But, beyond something simple like that, you would probably have lawyers working on a contract/documentation and a bank advising you on the structure and risks.
A company would need to find a counter-party for the hedge, someone to take the opposite side of the trade. That could be anyone from an investment bank to a private person, or another business entity.
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DU
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Thu Apr 25th 2024, 08:06 PM
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