Agoracom: Small Cap Investment - Connacher Oil and Gas - Re: Update on Bitumen and NG price

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Connacher is a growing exploration, development and production company with a focus on producing bitumen and expanding its in-situ oil sands projects located near Fort McMurray, Alberta

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Road_Warrior

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Re: Update on Bitumen and NG price - Bobert

in response to

Re: Update on Bitumen and NG price - Jurek

bobert

posted on Feb 04, 2009 02:43AM

I'm confused as well now. Jurek's last post stated that the WTI hedge is separate from the contract on a portion of bitumen production at POD 1. He stated that they are two separate things. Going back to Connacher's statement from their Press Release of January 21, 2009 which states:

"To crystallize the improvements and reduce the market risk associated with the expansion of Pod One production and sales, Connacher has entered into a term contract on a portion of bitumen production at locked in heavy differentials, reduced blending and transportation costs and executed a WTI hedge on 2,500 bbl/d from February through August 2009 at US$46/bbl. "

What then does this WTI hedge on 2,500 bbl/d mean and how does it relate to the term contract on a portion of bitumen production if they are separate? Does anyone know?