We enter into commodity price contracts to actively manage risk associated with price volatility to protect cash flow required to fund our capital program. We use fixed price and costless collar contracts as well as balancing physical and financial contracts in terms of volumes, timing of performance, and delivery obligations to manage risk.

 

We use hedges for both natural gas (per giga joules (“GJ”)) and electricity (per megawatt hours (“MWh”)) to stabilize fluctuations in commodity pricing. Currency hedges are applied to reduce exposure to payments due in foreign currencies. These hedges will be in effect throughout 2011 and 2012 as follows:

 

Commodity   Term Volume
 Average Price
 Index
Natural gas
    Collar
    Collar
    Swap
Electricity
    Swap
Currency
    US dollar swap
    US dollar swap		  
July 2009 – June 2011
July 2009 – Oct. 2011
April 2011 – Oct. 2011

Jan. 2010 – Dec. 2011

March 15, 2011
September 15, 2011
30,250 GJ/d
10,000 GJ/d
15,000 MMBtu/d

84 MWh/d

$9.8 million
$9.7 million
$4.52 - $7.02/GJ
$4.50 - $7.00/GJ
USD $4.64/MMBtu

$50.74/MWh

$1.00
$1.00
AECO
AECO


AESO

n/a
n/a

 

Net earnings for the year-ended December 31, 2010, include realized and unrealized gains of $21.2 million (2009 - $22.8 million) on these transactions. The impact of hedging increased realized natural gas prices by $0.32 per mcf in 2010 and by $0.70 per mcf in 2009.