RE:RE:From Truehabsfan and HDR on the Investor Village Sitehere is a better blurb from this q financials on the hedging
COMMODITY HEDGING
12 months
future
commodity
price protection
in
place for
>90% of
production from current
producing fields
As part of its overall risk management strategy,
Ithaca’s
commodity hedging policy is centred on
underpinning revenues from existing producing assets at the time of major capital expenditure
programmes and locking in
paybacks associated with
asset acquisition
s
. Any hedging is executed at the
discretion of the C
ompany
, with
no minimum requirements stipulated in any of the Company’s debt
finance facilities.
The Company’s future commodity hedged position is unchanged from that announced at the previous
quarter’s financial results. Following the realisation
of a
$
18.8
million
gain in Q2 2016, as of 1 July 2016
t
he Company
had 8,200
bo
e
pd hedged at
an average price of
$
59
/b
oe
for the year to June 2017. This
total is comprised of:
9,400
boe
pd (48% oil) at average price of $58/boe for the remaining six months of 2016
7,000 boepd (50% oil) at average price of $60/boe in the first six months of 2017.
The above figures
include
87
million therms of gas hedging (approximately
9
billion cubic feet), with a
price floor of £0.56/therm (~$8
.30
/MMbtu). The gas hedging is in th
e form of put options, the financial
benefit of which is realised regardless
of production in the relevant period.
A
s at 1
July
2016
the Company’s commodity hedges were valued at $
46.6
million, $
25.6
million for oil
hedges and $
21.0
million for gas hedges, based on valuations relative to the respective oil and gas
forw
ard curves
cheers ferret