Roc-ing and Rolling
Roc Oil [ASX:ROC] released its half yearly results this morning, and do you bet that they hadn’t bothered hedging the oil price.

According to the report, Roc has locked in “an average price of USD$70.10/BBL for the period to December 2011.” Obviously we don’t know the full details of each individual contract that they have used, so it could be that if the oil price falls further then Roc will be sitting pretty if they have hedged oil prices north of USD$120.

The important point to note is that most of the loss on the oil derivatives is unrealized, ie. that the contracts have yet to reach expiry. This means that they are sitting on a paper loss due to the mark-to-market requirements.

Despite the paper loss the company still managed to achieve an increase in production of 18% compared to the first half of 2007.