Re: exchange rate pros and cons??JUREK!!!
in response to
by
posted on
Nov 19, 2009 04:34PM
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
JUrek the following is a copy of Connachers NR,I beleive its quite clear as to what denomination that Connachers production was paid in,I don't understand why you can't just read the numbers,I beleive its quite clear,I would appreciate your clarifiacation if there is some other interpretation TKIA
!!!!!! note the reference to "US Greenbacks" wether a long or speculator an investor has to be informed myself I kinda lean on Connacher's NRs
At November 11, 2009, Connacher had the following WTI crude oil price-hedging contracts in place:
<< - April 1, 2009 - December 31, 2009 - 2,500 bbl/d - WTI US$49.50/bbl; - September 1, 2009 - December 31, 2009 - 2,500 bbl/d - minimum of WTI US$60.00/bbl and a maximum of WTI US$84.00/bbl; and - Calendar year 2010 - 2,500 bbl/d - WTI US$78.00/bbl. >>
As at September 30, 2009, the WTI crude oil forward price curve exceeded the hedging contract prices, resulting in a current liability and an unrealized mark-to-market ("MTM") non-cash accounting loss of $1.8 million for these contracts. For the year-to-date, the opportunity cost or realized losses on these contracts totalled $14 million. These losses are deducted from reported upstream revenues.
Additionally, in order to mitigate foreign exchange exposure to commodity pricing, Connacher entered into a foreign exchange revenue collar which throughout 2009 sets a floor of CAD$1.1925 per US$1.00 and a ceiling of CAD$1.30 per US$1.00 on a notional amount of US$10 million of monthly production revenue. For clarity, this contract provides the company a benefit from a strengthening Canadian dollar. As at September 30, 2009, based on the forward foreign exchange rate curve, the foreign exchange revenue collar had a value of $3.4 million; at December 31, 2008 it had a value of $1.8 million. The change in these values resulted in an unrealized non-cash foreign exchange gain of $1.6 million in the first nine months of 2009. Additionally, in the first nine months of 2009, Connacher realized a hedging gain (and received cash) in the amount of $3.9 million on this contract. These cash gains are included in foreign exchange gains/losses.