Gas prices

#1

I would like to know why my gas co. is telling their investors that they are hedging their gas prices at $4.40 but paying the land owners only $1.24. How can I find out what they are truly selling the gas for?

#2

A hedge is a financial contract between one Company and another (basically a bet) wherein they agree on a future price. When the time comes, they settle the bet with one party paying if the actual price is higher than the mark, and the other one paying if the price is lower. Kind of like an over/under bet on a football game, if that means anything to you.

They cannot legally do that with any gas that isn't theirs, and your royalty gas is not theirs, therefore your gas is not a part of the hedge contract. You can do your own hedging if you want, but unless you have a lot of gas, it will be difficult to get anyone interested.

If gas was selling for $8.00 right now, I'm betting you would not be asking this question. Hedges do cut both ways.

closed #3