YEEHAW CANDIDATES Message Board

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Strategies & Market Trends : YEEHAW CANDIDATES

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To: Galirayo who wrote (12694)	10/14/2005 1:35:22 PM
From: Gulo	Read Replies (1) of 23958

I haven't followed Murphy much, so I don't know what its hedge position is. If earnings disappoint, it will be because hedges slammed them hard. They will have to report the entire paper loss on all their hedges (including out in the future) because hedges are financial instruments. The high oil prices will only benefit the balance sheet for the oil sold recently (unless they also revalued reserves). In other words, if they have 2 years production hedged at $45, and they didn't revalue their reserves, they may end up reporting a lot less profit than they actually earned. I'd look at the cash flow to see how healthy they really are. Given the panic selling in all oil and gas, I don't think you can go wrong with a long-term hold in any of these stocks. -g

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