We enter into commodity price contracts to actively manage risk associated with price volatility to protect adjusted cash flow from operations 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. Net open positions may exist or may be established to take advantage of market conditions. Net earnings for the year ended December 31, 2007, include realized and unrealized loss of $1.6 million (2006 - $65.0 million gain) on these transactions.
The following table outlines commodity hedge transactions in place at December 31, 2007 together with transactions entered into subsequent to the year end:
| Term | Volume | Average Price | Index | ||
| Natural gas Collar Collar Fixed Collar Fixed |
Nov. 2007 - Mar. 2008 Apr. 2008 - Oct. 2008 Apr. 2008 - Oct. 2008 Nov. 2008 - March 2009 Nov. 2008 - March 2009 |
9,524 mcf/d 52,381 mcf/d 19,048 mcf/d 28,571 mcf/d 9,524 mcf/d |
$8.27 - $10.50 $7.33-$8.48 $7.86 $8.40 - $10.00 $8.51 |
AECO AECO AECO AECO AECO |
|
| Crude oil Collar |
March 2008 - Dec. 2008 | 1,000 bbls/d | U.S.$93.00 | WTI | |

