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More visibility provided on hedging, finally. More or less in line with peers, with 60% production hedged by means of collars contract with a small amount of puts. Significantly capping earnings in this OP environment, but this was inevitable I guess. I would have liked to see some reference to additional levels put into production with the new wells... reference to "wells performing as per expectations" is a bit disappointing. Good news is the realized OP at cargo shipping, higher than Brent, which would imply another record cargo shipping in May if the OP keeps trading at current levels.

Overall it's a narrow way out of the debt nightmare, we all know this. It won't be an easy walk. But current OP scenario provides a silver lining, finally.

As Wall Street like every Monday morning is busy shorting the oil that Asia bough overnight, waiting for the next Tuesday TACO bu****hit, Brent future slipped over July and accordingly it's now around 100USD. June contract in the meantime is at 107 as Brent spot Dated Platts has remained rather flat around 118 USD in the last 3 days. Reality vs. manipulation as usual. And in the meantime strategic reserves are being released. And after then? Who cares, short today, tomorrow it's another (TACO) day.

This stuff makes sense considering TACO Tuesday is coming and a new wave of b****it from the Orange Man is coming by markets opening next Monday. Accordingly, traders are going to take the profits produced in the latest OP spike before the weekend. This is the way it works in today's clown world. Until something major breaks and the media are no longer able to keep up the facade for their puppet masters.

I made further research about Brent Spot Values "Dated" supplied by CME. And actually it is considered the best proxy of "real" data provided by Platts as they diverge on average by 0.5-1.0 USD. We are currently back to 120 USD. Unsurprisingly, considering June futures are over 100$.

Regarding hedging, it's only a guess in the absence of information provided by TLW. For sure hedging was very good a few months back, where only 10-15% of production was capped. On the other hand, this was before the refinancing agreement which typically brings stricter commitments to protect the interests of creditors (we had a flavour of this, 5 years ago). In the small-to-mid cap Oil Companies hedging 40-to-50% of production is considered normal practice, and even more for highly debt-burdened companies. But the devil is in the details, and it is the same important to understand where the ceilings are set.

We will know soon.

Tony we are just making educated guesses here, based on online research and/or personal knowledge on the subject. References to the 5-day period can be found online, I interrogated Gemini on this several times and I understand this number was provided also by others here on this chat. Platts' provides Brent Dated prices on a daily basis as a service (very expensive I understand), but CME reflects very well those numbers in their swap charts. Hedges are placed by months or quarters or the like, and typically the principle "first-out" applies: the first barrels shipped in the month/quarter are the hedged ones. If the hedging is a swap or a collar and the OP is higher than the ceiling... then every USD above the ceiling is gone (into the pockets of the bank). What is more, typically taxes are paid on the whole OP, even if 30, 40 or 50 USD are then returned to the bank from TLW.

All in all, hedging works like a massive value-destroyer when OP spikes for a short time, as it burns out enormous amount of potential profits. And this is twice as more painful for companies which are in desperate need for cash.

It goes without saying, it's just those same highly-indebted companies which are forced to use suicide contracts like the collars for hedging purposes, for the simple reason that paying "a put only" requires fresh capital to be spent for insurance purposes, while the collar allows to cover the price of the put "for free" (initially) by adding a call at a pre-determined ceiling which acts like a guillotine in case of OP spikes. As we say in Italy, "the dog always bites the ragged man".

Kosmos is very transparent about its hedging strategy. Overall it is hedging some 50% of production from Ghana and USA (LNG is intrinsically hedged in the gas purchase agreement). Hedging is about 50% with a mixed approach swap/collar associated with an average cap to the upside in the 70 USD area. This means that KOS will fully monetize current prices for only 50% of its production.

Just to provide a picture on how dated Brent Platts' prices are used, when a cargo is shipped from Ghana oil is sold at the average price of Dated Brent for the 5 days before-after cargo departure. These values are very well mirrored in the swap chart provided by CME for Dated Brent (around 115 USD these days). The gap between the call/put options in the collar is calculated against those 115 USD. For example if there's a swap at 70 USD for the whole cargo, KOS will lose those 45 USD extras associated with such shipping. A LOT.

Regarding TLW, it obviously all depends on how much production has been hedged. We will know it soon, and it will inevitably impact the SP, in a way or in another.

XX I already realized a few days ago that CME Brent Platts values (swap) were aligned with the headlines about "spot prices at 135-140 USD". CME swap derivatives are a financial instrument, true, but they are highly reflective of the *real* spot market. Here's a high-level explanation from the AI:

If you want to know the price of a physical cargo from yesterday, the Daily Swap is a highly reliable proxy because it is mathematically tethered to the actual cargo market.

Reliability of the Swap for Cargo Prices

Direct Alignment: The settlement price of a Daily Dated Brent Swap is based exactly on the Platts Dated Brent assessment for that day.

Official Benchmark: Since over 60% of the world's physical oil is priced against Dated Brent, the swap's final value reflects the consensus of real-world bids, offers, and trades for North Sea cargoes.

Reflecting Scarcity: In high-stress periods (like April 2026), the swap captures the "real-world price tag" of crude that is actually available, which can be vastly different from the standard "paper" futures price.

By the way, it goes without saying that 95USD as a spot price would not at all be reflective of an environment where there are no barrels available to refineries as it is happening today. 95 USD is a wishful thinking that in two months' time this crisis will be over, oil & distillates and LNG will flow smoothly from Hormuz, no damage has been inflicted to production facilities, there are no strategic reserves to refill etc etc. in one world is just a "future".

XX do not rely on Gemini for this kind of stuff: I tried it in the past, but it stubbornly gave me the future price (and in fact 95$ is June 2026 future price actually). Yesterday' fixing for Brent Dated Platts can be found on CME group website. I posted the link in the previous message: you need to select the "day" reference (it's the only one which is provided) and you'll see yesterday price was 114.90$

We do not have to make confusion between spot OP and futures here. Commonly traded OP are FUTURES, and they typically make reference to the following trading month, or 2 months later according to whether we are in the first or the second half of the month. For example as we're in the 2nd half of April, typically the reference is June 2026, which will be the reference up to about mid-May when the future will roll into July.

Futures are affected by "news": typically optimistic statements of "peace is coming" by the Orange Man, or by more or less accommodated "reports" by political agencies like EIA / IEA.

Spot prices are another story: they actually inform of the CURRENT STATUS of physical market. Is there enough offer? Demand is getting weaker? What about physical storages? What's the average cost paid yesterday to buy a cargo from Vitol, Trafigura or Gunvor? This is rendered Dated Brent - Platts OP for... today. Or better, yesterday. You can find a hyperlink here: https://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?type=p&code=AUB&title=Chart+-+Apr+2026+Dated+Brent+%28Platts%29+Financial&venue=0&monthYear=J6&year=2026&exchangeCode=XNYM&interval=1

Summarising: futures are just (un-)educated guesses about the future. Spot prices reflect the reality of physical market.

Having personally dealt with former-Sovietic oil and gas industry, the narrative about Russians being unable to re-start their wells without "Western support" is one of the funniest things I have ever heard in 25 years' working experience. It is true there's material damage to some russian refineries, but on the other hand Russia consumes internally some 40% of the oil it produces, and is able to partially re-route oil from Black Sea and Baltic to Pacific area or Northern route (they're working on it). And in the current environment, being able to internally produce the hydrocarbons you need, it's a major strategic advantage.

On the other hand it is crystal clear that the oil market is in dramatic material supply deficit as Brent spot stubbornly trades some 20-25 USD more than futures (manipulated in Wall Street for information warfare and political consensus needs). The silver lining here is that once the US administration will no longer be able to manipulate the market by artificially depressing the OP (arguably: soon), then the OP could stabilize at a significant higher level than pre-war prices, and this could last for a long time. Ironically, oil future prices could be higher when the war is over (after the first relief short) than now. And this is probably the best scenario for TLW LTH.

Math often comes to the rescue. Let's suppose TLW approximately ships 1m boe per month. At current Dated Brent prices it is cashing some 50-60m more USD every month. Good start, definitely. Let's suppose that after tax the additional FCF is about 30m. And now let's suppose prices remain in this range for 12 months: in this case TLW would make some more 400 USD extra FCF compared to current guidance. TLW would be almost out of the tunnel in this scenario, with SP arguably between 20 and 30p easily.

But, there's too many buts. Let's suppose TLW is missing 50% of that extra-profits due to hedging (maybe an optimistic assumption, considering what happened a few years ago in a similar scenario). And let's suppose that in 6 months time OP is back to about 70$. Then the extra FCF would be just some 100m USD, i.e. some half of the amount of debt expenses. With one year less of production ahead. In this scenario TLW would be doomed, with a SP easily falling to few pence.

This maths-for-dummies very well explains current SP trend. Time will tell whether this is worth 30p or 3p. As of now, this remains a gamble, just as it has been for the last few years.

Good news: as of yesterday Dated Brent was 121$ vs. 95$ futures. Big gap meaning oil companies are monetizing much more than what future contracts imply.

Bad news: no visibility yet on how much of TLW production is capped as per collars currently in place

As commodity traders in Wall Street earn their very nice salaries by selling oil certificates in the morning to fulfil POTUS' requirements (as much-less paid Chinese traders buy the same futures at night to stockpile at lower price), Brent Spot prices have remained over 120$ for the last 10 days. Clown paper world vs. physical lack of supply in full swing. Algos sell oil companies' shares following OP futures, but Oil companies are making their profits selling on the spot market. Waiting for the next round of carpet bombing and political homicides that is brewing in the meantime. Crazy world.

Look at OP futures: there's no war in Iran. Hormuz is open, probably it was never closed. Most probably no one even figures out it can possibly be closed. Peace and prosperity dominate in the Gulf and, recall: trouble is low demand and overproduction.

Look at Wall Street and other stock markets: Global economy is strong. Yet, there is not even a threat of a recession or of inflation. Let alone stagflation. Clearly peace and security of resources is the main theme here: energy supply is safer than ever and real economies are running fast and furious. Future is bright.

Look at EUR/USD cross: Euro area is the Promised Paradise: a strong economy with cheap energy available for everyone, skyrocketing GDP and well paid jobs for everyone.

Because this is the problem here: media, banks and big hands are depicting a Goldilocks world where everything is fine. Because this Goldilocks world is the best guarantee for Israel and the US to keep this war waging forever. Until the right number of people is slaughtered or sent back to cavemen status. All the system pushes in this direction. How long will this trick last for? Who knows. They know. We simply don't.

Spot Brent price can be tracked here: https://www.cmegroup.com/markets/energy/crude-oil/european-dated-brent-swap-futures.html Yesterday's settle was at 118$, which was about 20$ more than May26 futures. Today will be probably around 125.

But overall, the big issue remains how much oil is capped as per current hedging strategy. Confirming previous hedging strategies is kinda ominous as they were a total disaster and led TLW to miss most of the Russia-Ukraine OP spike. Hopefully they're doing something different, this time...

This truce is only aimed at replacing weapon stockpiles and showing "good-will" from both parties. And allowing Trump's clan to monetize on the stock market. By the way, no ship is passing through Hormuz Strait at the moment...

This time it will probably be different. The US are cornered in Iran. If they escalate further, Iran will target oil fields throughout the whole Gulf area. If they don't escalate and pretend to get away claiming they've won, Iran will keep targeting American military bases and keep Hormuz closed. No "agreement" can be reasonably be achieved now, in spite of Orange Man daily claims. In fact, after a "real" agreement was achieved in Oman (where essentially Iran gave up on 100% of its nuclear program) the wise guys in the room thought it would be a great idea to kill all the same Iranian leadership which negotiated that same agreement the day before. Lesson to Iran is very simple: you cannot negotiate anything with Bibi and Demented Donald, apart for the date of your own homicide, maybe.

All this leads to one scenario only: escalation. Which means permanent and irretrievable destruction of oil and gas production for many years. About 20% of world oil and gas production. Recession would be a given, sure. But at the same time no recession can justify a drop of 25 million bpd in energy demand. It would be a gigantic stagflation where GDP collapses worldwide, but OP would remain well above 100$, or even much more, for many years.

Only alternative to this scenario is that US and Israel surrender, acknowledge defeat, and kick the ass of their political leadership. Which actually means, no alternative is on the table.

Thanks to US and Israel, world economy is closer than ever to collapse. And TLW is closer than ever to saving its skin.

Unless there is some news about production in Ghana or other potential negatives, it's actually puzzling both TLW and KOS are red today. On the other hand, apparently many traders prefer to close their position and possibly rake some gains on Fridays in the expectation that the weekend will bring some major news (orange guy is very vocal these days)...

Congratulations Dimon: almost as good as Bibi in explaining why Americans' children are due to die in Iran in the sole geopolitical interest or Israel. And in the interest of bankers, of course.

Trump continues his personal show aimed at artificially maintaining S&P high while trying to depress the OP. Incidentally enriching his friends who move billions USD just minutes ahead of his "revelations". But this is just another side of a war which is going everything but not according to the (blatantly stupid) plans he and Bibi had originally in mind. Apart for that, the most interesting aspect is that in spite of all propaganda and paper-based manipulation, the quest for oil barrels has just started and will go on for quite a while. Whatever the outcome, even in the most optimistic assumptions, the market will deal with a lack of supply that will be structural, until damages are repaired and sea routes finally cleared. Only black swan is the demand side: if the disruption is too much, then also the demand side would be affected. But this would imply a global recession and an overall stock market crash.