AOC has very good Hedging in place.The hedging has given AOC huge financial benefit so far this year and helped AOC mitigate the risk from low oil price and gain precious opportunity to develop its light oil assets.
We take Q3 as example during which WTI averages 48.2 and AOC hedged 20k bpd at 55.5. Let's do a simple math:
20000 x 92 x (55.5-48.2) x 1.25 exchange rate = 16.8m CAD
To avoid misleading, I have to mention that AOC hedged 12000 bpd at WCS to WTI spread of about 15 US dollars. In Q3, such spread is under 11 dollars. This should cause a loss. The same thing applies to Q2 as well because the spread in May and June was around 10 dollars.
However the gain is much bigger than the loss, this was why In Q2 AOC reported 18.5m gain for the first six months from this risk management plan.