Hedging can often play an important part in an E&P company’s operations and allows managers to better plan and execute the business strategy by protecting cash flows. However, it’s not a free lunch, as hedging can also expose companies to margin compression (in a rising service cost environment). Balancing that tradeoff is something E&Ps must debate regularly. Through the most recent round of earnings and investor updates, we find that next year’s production volumes amongst E&P’s in our coverage universe are ~36% hedged across the crude oil and natural gas product streams. We will take a detailed look at the hedging landscape across our E&P universe to determine the group’s total exposure to commodity price and basis volatility.