US E&P companies have so far hedged 41% of their total forecasted 2021 oil output at an average price floor of $42 per barrel (Nymex WTI equivalent), lower than this year’s floor of $56 per barrel, a Rystad Energy analysis shows. Gas has proven more resilient as more than 45% of the expected production is hedged at a Henry Hub base floor price of $2.58 per MMBtu, marginally lower than 2020’s $2.70 per MMBtu. Hedging strategies of US upstream operators have taken center stage as a tool that is helping companies cushion their cash flows amid weak oil prices. From the usual representative oil-producing peer group that Rystad Energy analyzes, 20 companies had communicated their hedging volumes for 2021 as of early October. These operators account for 32% of the expected 2020 US shale oil production. The analysis includes all contracts, with full or partial floor protection: swaps, collars […]