RE: To the good Dr.10 Mar 2020 08:07
Daltry, you will find out soon enough when the EOY financials are published but hedging was a to be considered as a risk mitigation factor in Hurricanes Risk Register.
Oil price fluctuations
Oil prices can be volatile and subject to fluctuation in response to relatively minor changes in the supply of, and demand for, oil, market uncertainty and a variety of additional factors that are beyond the control of the Group. In particular, there is a greater market shift towards renewable energy sources and governments, including the United Kingdom, are developing their fiscal policy and regulatory frameworks to address the impact of climate change. There is a risk that climate change will have an adverse impact on oil price. However, it is not always possible to accurately predict the timing and direction of future oil price movements and there is a risk that oil prices may not remain at their current levels. Declines in oil prices may adversely affect the cash flows generated from the Lancaster EPS and may also adversely affect market sentiment and, consequently, lower the market price of the Company’s ordinary shares and restrict the ability of the Group to raise finance.
The viability of the Group’s assets is assessed on a regular basis. Economic models of development cases are stress tested using varying oil price forecasts. Investments have and will only be made if development cases are robust to downside price sensitivity scenarios. For Hurricane’s producing assets the Group will consider the use of oil price hedging to manage any potential exposure
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