Approximate Value of the hedges alone (the "free money")I think this is the value of iae hedges alone (the difference between the hedged value, and the prices now). I am assuming oil and gas prices were to stay at this price over the next 18 months, until June 2017. In other words, this is the addtional amount they will earn compared to if they had no hedges, the "free money"
5900 boe/d Oil Hedges:
$64-43 = $21 per barrel of hedges
$21/barrel x 5900 boe/d x 30 days/month x 18 months = ~ $67 million US (~ $90 Million CAD)
5000 boe/d gas Hedges:
5000 boe = ~290,000 Therms
63 Pence - 38 Pence = 25 pence per Therm of hedges
25 pence =~US $0.38
$0.38/ Therm x 290,000 Therms x 30 days/month x 18 months = ~ $60 million US (~ $80 Million CAD)
Total value of the hedges is ~$170 million CAD over the next 18 months. This 170 million is above and beyond what they get for all their production at current market prices.
The market cap of the entire company is only $275 million CAD. With the value of their $1.5 billion in tax credits and the hedges together, you start to see that these things alome are worth more than the market cap of the company.
I am not certain whether the hedge calculations are totally correct, or whether there are any other future costs associated wth the Puts.
Feel free to ammend my calcs
GLTA