Latest hedging data from CanOils shows that among Canada’s largest oil producing companies, it is actually a number of gas-heavy companies that have protected their oil production against the falling oil price the best heading into Q2 2020.
This analysis was conducted using hedging contract data available in annual reports of 33 Canadian-listed companies.
- Of the group, we looked at those that produced at an average of over 10,000 bbl/d of oil in 2019 and the proportion of these companies’ oil volumes that were hedged for the Q2 2020 period.
- As we were mainly analyzing the impact of falling oil prices due to market share war between Russia and Saudi Arabia, and not widening differentials between WTI and Canadian crude due to Canadian market dynamics and capacity constraints, we deliberately limited our analysis to include only fixed swap , collar and three-way collar contracts for oil.
- All other contract types are available in the CanOils hedging module but have been excluded here.
Comparing volumes that were hedged under fixed swaps, collars and three-way collars as of December 31, 2019 for the second quarter of 2020 by these companies, it was three gas-weighted producers in Ovintiv Inc. , ARC Resources Ltd. and NuVista Energy Ltd. that enter Q2 2020 with the largest portion of their oil production portfolio hedged under a swap, collar or three-way collar contract.
Top 5 Oil Hedgers for Q2 2020 based on volumes hedged as of Dec 31, 2019
Using CanOils data, it is also possible to study the other extreme of the spectrum. By analyzing CanOils debt levels and credit facility utilization data in combination with hedging strategies, it is possible to identify the companies that may be in a more challenging position through these uncertain times.
For a more global look on the companies best protected against this recent crash in prices, visit Evaluate Energy, where the hedging product includes U.S. and international operators alongside these Canadian producers.
This article was originally published on JWN Energy, where you can find a sample of the CanOils hedging data, showing Athabasca Oil Corp.’s 2020 positions, on a contract-by-contract basis.