Reserves are approximately 65% NG and 35% crude. The company has 75% of production hedged through 2012 and significant hedging through2015.
"As of February 28, 2012, we had approximately
75%
of our expected 2012 production hedged. For 2012, we had
7,516
Bbl/d of oil and
54,257
MMBtu/d of natural gas hedged at average prices of approximately
$101.00
and
$7.12
, respectively. For 2013, we had
6,980
Bbl/d of oil and
56,000
MMBtu/d of natural gas hedged at average prices of approximately
$92.05
and
$5.96
respectively. For 2014, we had
6,000
Bbl/d of oil and
30,500
MMBtu/d of natural gas hedged at average prices of approximately
$93.58
and
$5.43
, respectively. For 2015, we had
5,000
Bbl/d of oil and
30,500
MMBtu/d of natural gas hedged at average prices of approximately
$96.41
and
$5.55
, respectively."
In the short term hedges should keep revenue relatively stable. In the longer term I'm optimistic about NG usage and price support. So while I would not personally weight BBEP over 2-3%, I'm quite comfortable at up to that weighting. If for no other reason than the idea that 'yield equals risk' I would be hesitant to allow BBEP to get a weighting that might be acceptable with the likes of EPD, KMP, or others in the mid stream segment.
