|
8. DERIVATIVES AND FAIR VALUE
The Company uses derivative financial instruments from time to time to achieve a more predictable cash flow from crude oil and gas production by reducing the Company’s exposure to price fluctuations. See the table below for the list of outstanding contracts as of June 30, 2024:
| Settlement Period |
Type of Contract |
Index |
|
Average Monthly Volumes |
|
|
Weighted Average Put Price |
|
|
Weighted Average Call Price |
|
| |
|
|
|
(Bbls) |
|
|
(per Bbl) |
|
|
(per Bbl) |
|
| July 2024 - September 2024 |
Collars |
Dated Brent |
|
|
80,000 |
|
|
$ |
65.00 |
|
|
$ |
92.00 |
|
| Settlement Period |
Type of Contract |
Index |
|
Average Monthly Volumes |
|
|
Weighted Average Put Price |
|
| |
|
|
|
(Bbls)a |
|
|
(per Bbl) |
|
| July 2024 - December 2024 |
Put Options |
Dated Brent |
|
|
125,000 |
|
|
$ |
65.00 |
|
a) The premium for these options was $4.01 per barrel and was paid in October 2023.
| Settlement Period |
Type of Contract |
Index |
|
Average Monthly Volumes |
|
|
Weighted Average SWAP Price in CAD |
|
| |
|
|
|
(GJ)b |
|
|
(per GJ) |
|
| November 2024 - March 2025 |
Swap |
AECO (7A) |
|
|
67,000 |
|
|
$ |
2.80 |
|
| b) One gigajoule (GJ) equals one billion joules (J). A gigajoule of natural gas is about 25.5 cubic metres at standard conditions. |
The following table sets forth the loss on derivative instruments on the Company’s unaudited condensed consolidated statements of operations and comprehensive income:
| |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
| Derivative Item |
|
Statements of Operations Line |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
| Commodity derivatives |
|
Cash settlements paid on matured derivative contracts, net |
|
$ |
(9 |
) |
|
$ |
(4 |
) |
|
$ |
(33 |
) |
|
$ |
(63 |
) |
| |
|
Unrealized gain (loss) |
|
|
266 |
|
|
|
35 |
|
|
|
(557 |
) |
|
|
115 |
|
| |
|
Derivative instruments gain (loss), net |
|
$ |
257 |
|
|
$ |
31 |
|
|
$ |
(590 |
) |
|
$ |
52 |
|
|