A disciplined approach

Pure oil and natural gas producers often do not hedge energy prices – other than one-off hedges on specific acquisitions – in a bull market. They and their investors want to take advantage of any price upside. But some companies that actively hedge – such as Houston companies Petrohawk Energy and Plains Exploration – have stuck to consistent strategies, despite the hedging losses they have suffered in recent months.

Petrohawk’s strategy is to consistently hedge some 50%–70% of its oil and