Hedging

Overview

Whitecap strives to mitigate the risks associated with the oil and gas industry and in turn provide greater predictability over revenues, cash flows and dividend payments.  Whitecap accomplishes this by maintaining a conservative balance sheet with significant unutilized lines of credit in addition to actively hedging the commodity price exposure using a rolling three year price risk management program.  We hedge up to 75 percent of after-Crown royalty volumes using a portfolio of derivative instruments.

Whitecap’s current hedges outstanding as follows:

WTI Crude Oil Derivative Contracts

Swap 2017 Jan - Jun 5,000 C$69.18
Swap 2017 Jul - Dec 1,000 C$72.01
Swap 2017 3,000 C$69.07
Swap (1) 2017 10,450 US$50.40
Swap 2018 4,000 US$53.28
Collar 2017 Jul - Dec 1,000 C$82.83 C$60.00 
Sold put/call (2) 2017 3,000 US$85.83 US$60.00
Sold put/call (2) 2018 3,000 US$85.83 US$60.00

(1) 1,500 bbls/d at US$48.00/bbl and 1,500 bbls/d at US$48.05/bbl are extendable through 2018 at the option of the counterparties.
(2) In the third quarter of 2015, Whitecap optimized its previous 6,000 bbls/d sold puts with an average strike price of US$66.68/bbl in 2016 by lowering the strike price to US$50.00/bbl and concurrently sold 2017 and 2018 put and call options with strike prices of US$60.00/bbl and US$85.83/bbl respectively. The optimization was completed on a costless basis.

Note:  Prices reported are the weighted average prices for the period.

 

WTI Crude Oil Differential Derivative Contracts

Swap 2017 Jan - Jun 1,000 MSW  3.29 (3)
Swap 2017 Feb - Dec 1,000 MSW 3.95
Swap 2017 Jul - Dec 2,000 MSW 3.83
Swap 2017 12,000 MSW 4.30 (3)
Swap 2017 Jan - Jun 1,000 WCS 19.33
Swap 2017 Feb - Jun 1,000 WCS 19.55
Swap 2017 Feb - Dec 1,000 WCS 20.50
Swap 2017 Jul - Dec 3,000 WCS 20.58
Swap 2017 2,000 WCS 20.48 (3)

(1) Mixed Sweet Blend ("MSW").
(2) Western Canadian Select ("WCS").
(3) Contracts executed in USD were converted to CAD through a foreign exchange contract.

Note: Prices reported are the weighted average prices for the period.

 

Natural Gas Derivative Contracts

Swap 2017 Jan - Mar 7,500 3.14
Swap 2017 Jan - Jun 2,500 3.00
Swap 2017 Jul - Dec 3,000 3.32
Swap 2017 25,000 2.92

Note: Prices reported are the weighted average prices for the period.

 

Foreign Exchange Contracts

Monthly average rate forward 2017 US$5.0 million 1.2580
Monthly average rate forward 2018 Jan - Jun US$6.0 million 1.2436
Monthly average rate forward 2018 Jul - Dec US$5.0 million 1.2459

(1) Bank of Canada monthly average noon day rate settlement.

Note: Rates reported are the weighted average rates for the period.

 
Average rate variable collar 2017 US$2.0 million 1.2300 1.2951 1.2425
Average rate variable collar 2017 US$2.0 million 1.2360 1.2925 1.2425
Average rate variable collar 2017 US$2.0 million 1.2346 1.3000 1.2500
Average rate variable collar 2017 US$2.0 million 1.2580 1.3340 1.2740
Average rate variable collar 2017  US$2.0 million  1.2690 1.3350 1.2790
Average rate variable collar 2017  US$1.0 million 1.2746 1.3940 1.2995
Average rate variable collar 2018 Jan - Jun   US$2.0 million 1.2550 1.3570 1.2710
Average rate variable collar 2018 Jan - Jun US$1.0 million 1.2679 1.3915 1.2925
Average rate variable collar 2018 Jan - Jun  US$1.5 million 1.2500  1.4285 1.3000
Average rate variable collar 2018 Jan - Jun  US$1.5 million 1.2500  1.4420 1.3130 
Average rate variable collar 2018 Jan - Jun US$2.0 million 1.2500   1.3600  1.2660
Average rate variable collar 2018 Jul - Dec  US$6.0 million 1.2500  1.4285 1.3000
Average rate variable collar 2018 Jul - Dec US$6.0 million 1.2500 1.4420 1.3130

(1) Bank of Canada monthly average noon day rate settlement.

(2) If the USD/CAD average monthly rate settles above the ceiling rate the settlement amount is based on the conditional ceiling.

Last updated:  2017 March 7


Swap 2016 500 97.06