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 Oct - Dec 4,000 C$69.80
Swap (1) 2017 Oct - Dec 10,450 US$50.40
Sold put/call (2) 2017 Oct - Dec 3,000 US$85.83 US$60.00
Collar 2017 Oct - Dec 1,000 C$82.83 C$60.00
Swap 2018 Jan - Jun 4,000 C$63.06
Swap 2018 Apr - Dec 1,000 C$65.14
Swap 2018 Jul - Dec 3,000 C$65.18
Swap 2018 5,000 C$62.41
Swap 2018 4,000 US$53.28
Sold put/call (2) 2018 3,000 US$85.83 US$60.00
Swap 2019 Jan - Jun 1,000 C$65.13

(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 through the exercise of a one-time option on December 29, 2017.
(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 Oct - Dec 19,000 MSW 4.19 (3)
Swap 2018 Jan - Jun 2,000 MSW 4.53
Swap 2018 9000 MSW 4.59
Swap 2017 Oct - Dec 8,000 WCS 20.16 (3)
Swap 2018 Jan - Jun 4,000 WCS 19.45
Swap 2018 Jul - Dec 4,000 WCS 19.12
Swap 2018 3,000 WCS 19.75

(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 Oct - Dec 31,000 2.96
Collar 2017 Oct - 2018 Mar 2,500 3.47 2.75
Swap 2018 Jan - Mar 5,000 2.34
Collar 2018 Jan - Jun 2,500 3.08 2.55

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

 

Foreign Exchange Contracts

Monthly average rate forward 2017 Oct - Dec US$5.0 million 1.2580
Monthly average rate forward 2018 Jan - Jun US$3.0 million 1.2424

(1) Reuters monthly average noon day rate settlement.

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

 
Average rate variable collar 2017 Oct - Dec US$2.0 million 1.2300 1.2951 1.2425
Average rate variable collar 2017 Oct - Dec US$2.0 million 1.2360 1.2925 1.2425
Average rate variable collar 2017 Oct - Dec US$2.0 million 1.2346 1.3000 1.2500
Average rate variable collar 2017 Oct - Dec US$2.0 million 1.2580 1.3340 1.2740
Average rate variable collar 2017 Oct - Dec  US$2.0 million  1.2690 1.3350 1.2790
Average rate variable collar 2017 Oct - Dec  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$5.0 million 1.2500 1.4420 1.3130

(1) Reuters 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.

Physical Purchase and Sale Contracts

WTI Crude Oil Differential Derivative Contracts

Swap 2018 3,000 MSW 4.15

(1) Mixed Sweet Blend ("MSW").

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

Last updated:  2017 November 1


Swap 2016 500 97.06