Patrick,
I wish I was blessed with the ability to predict oil prices--I can say that oil prices will average higher this year than last, and I believe that will hold true, each year, for quite a few years into the future. We all knew, I think, that oil would come down in price as the weather warmed up, but none of us thought it would be this abrupt, or have anywhere near this effect on the stock price. What we need now is a sudden cold wave to hit Europe and areas where we don't live to stop oil prices from dropping anymore, and maybe even boost them back up some.
CWEI, in the past, has hedged part of its production--the last hedging contract that I am aware of ended in August of last year. However management retains the right to establish these futures contracts anytime they think it would be in their best interest to do so. Other than that, CWEI sells its oil at a discount to the NYMEX Spot Price. Now, if CWEI management was astute enough, or lucky enough, to have hedged their future production when oil was sitting at $26.60 a barrel, we would be sitting on top of it right now. When they announce earnings we will find out if they have done any future hedging, in the meantime I will ask Lajuanda Holder to see if she is free to divulge that information.
In one of my earlier posts today was a message from Mr. Clayton Williams that nothing has changed with the company, so as far as the opportunity to buy CWEI cheap, based on his message, I don't think there is anything to worry about with the company.
I am glad tomorrow is Saturday, I don't have to worry about CWEI decreasing in price (LOL)--it has been a painful week.
Let us hope there are better days ahead.
Good Luck,
Buzz |
