May. 6 at 9:14 PM
$REPX Basically, what happened here is this: buying Riley Exploration Permian because I expected trouble in Iran and the Strait of Hormuz sounded like a good idea at the time. I thought they would benefit from rising oil prices if the seemingly inevitable escalation materialized, and I figured it could serve as a good hedge.
Turns out, they had already hedged themselves so heavily that we are now looking at a
$127 million accounting loss. The silver lining is that only
$12 million of that was a cash loss, while the remaining
$115 million was an unrealized, non-cash revaluation of open hedge contracts.
