Bus. Devt: Managing Price & Revenue Risk Amid Heightened Market Uncertainty
Sponsor: Credit Suisse
Over the past two-years, low petroleum prices and heightened price volatility have presented a challenging operating environment for oil & gas producers.
With growing optimism around energy prices in 2017 and beyond, managing price risk, or hedging, will play a much larger role in our industry moving forward.
This increase in hedging activity will not only focus on risk to forward revenues but also risk to “deal value” as ownership of upstream assets increasingly changes hands.
Capital providers, both debt and equity, are increasingly requiring hedge programs from their partners that cover operating expenses, debt service, pledged return, CAPEX requirements and minimum liquidity thresholds.
Banks that had previously left hedging to the discretion of their customers are no longer doing so. Likewise, lenders that have previously had minimum hedge requirements are increasing hedge ratios, extending hedge tenors, and taking a stricter approach to what strategies are accepted as bona fide hedge.
Alongside the increased need to hedge, the ability and tools available to hedge have also expanded. For WTI and Henry Hub natural gas, the forward price curve extends well beyond 2020.
There is also much greater opportunity to manage specific regional price risks whether its crude differentials in the Permian Basin or volatile gas basis spreads in the Marcellus. Likewise, there is growing transparency, and liquidity, in the rapidly expanding US NGL market that allows for much precise risk management of exposure to ethane, propane, butane and pentane markets.
The popular format of a Business & Social Networking hour followed by an hour long program, including a Q&A session, will begin at 5:00 PM in the Mezzanine.
*SEASON PASS HOLDERS: You do not need to register for this event, as your Season Pass has automatically registered you for all 2016 – 2017 Business Development events. Thank you for being a Season Pass Holder!
Mark your calendar for the remainder of the 2016 -2017 Season:
January 25, 2017
February 22, 2017
March 29, 2017
April 26, 2017
May 24, 2017
June 28, 2017
1300 Lamar St
Houston , TX 77010