The Globe and Mail reports in its Friday, Feb. 12, edition that a defence Canadian oil producers
had against the plunging price of
crude is crumbling as hedges
expire amid projections that
crude will continue to decline.
A Bloomberg dispatch to The Globe reports that hedges that shielded companies
such as Crescent Point Energy
and Whitecap
Resources from the full pain
of $30 oil are winding
down this year and next (all figures U.S.). Nineteen
small to mid-sized producers
have an average of 19 per cent
of their crude hedged at about
$58 a barrel this year, and only 3
per cent at about the same price
in 2017.
That compares with 27
per cent at $71 for the same companies
last year. The reduced hedging may
prompt companies to accelerate
output and costs cuts, including
dividends, as the brunt of the
downturn hits.
Crescent Point's oil hedges drop
to 29 per cent at about $60 a barrel
this year, from 44 per cent at
$69 last year. Its
gas hedges fall to 30 per cent
from 33 per cent. Whitecap's oil
hedges fall to 14 per cent this
year at $64 a barrel, from 47 per
cent last year at $74 a barrel.
Crescent Point says it is "well protected"
with hedges in 2016.
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