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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (59908)	2/7/2000 10:59:00 PM
From: ItsAllCyclical	Respond to of 95453

Hedging XTO vs VPI... >> Makes XTO's Oil Hedging look better everyday - also, explains the decline of unhedged - crude pureplay VPI's shareprice of late into bullish crude prices... << Oh come on... I think if XTO ever appreciates 50%+ from it's current price then it too might enter a profit taking phase. Considering VPI's quick run from 9 to 15 the profit taking has been pretty light. Actually XTO's hedges are looking more and more mediocre as time goes by. XTO is known for being a conservative steady growth play so their hedging is consistant with their business plan. I have no problems with it. I agree most E&P's should consider hedging at least 25-50% of their crude production at these historically high prices. Often the companies most apt to hedge are those with larger debt issues. Given VPI's vs XTO's debt, VPI has less need to hedge. One last item, RRC hedged a good deal of their Q4 production at great prices and it hasn't helped their share price. OIL probably had the worst hedges of any E&P and it's up the most. PETD hedged most of their production at $3. Granted it's not a pureplay, but I don't see much apprecation there. You can come up with many reasons to determine why an E&P is trading where it is, but so far hedging seems to be a pretty minor issue at least according to the tape. BTW, as you know I own both issues.