Another thing I should point out. Although it would be good to be conservative and hedge some at $80, there is a big reward for pushing the envelope a bit.

Let's assume that "WTI at $60" is our breakeven point. And for the sake of argument, let's just use WTI numbers rather than netbacks on bitumen for this little illustration:

You'd think that by waiting to hedge at $100 instead of $80, the company would make 25% more profit, right? 25% of $80 is $20, so that extra $20, bringing $80 to $100, is an extra 25%, right?

Wrong.

Hedging at $60 means break-even, no profit.

Hedging at $80 means a profit of $20 per barrel.

Hedging at $100 means a profit of $40 per barrel, or TWICE as much as the hedge at $80.

So while there is a great desire to lock in a safe hedge at $80, when WTI is pushing the current numbers and the economy has not yet started to go south, the temptation will be great to hold off for a big and see if we can hedge at $100.

So before everyone criticizes management for making the wrong decision, what would you do? A little straw poll here would be interesting.

Considering the current hedges, I'd hold off for a bit and aim for a slightly higher hedge. But I'd be ready to pull the trigger quickly, and I'd also be worried that any hedges deals would be "take it or leave it" and I couldn't just sit and watch the numbers bounce around. Well, to some extent that probably happens, but not fluidly. And if the market started to go backwards, hedge possibilities might vanish or go south very quickly. I don't have enough experience with these to offer a professional opinion, sorry.