ADX Adjusts Hedging Position for its Austrian Production
“Previous collar position unwound and new Brent swap secured
at US$ 41.77 per barrel”
Key Points:
- ADX has unwound the reparticipating collar position announced on 13 March 2020 which guaranteed a minimum Brent crude oil price of US$ 30 per barrel for 25% 1P production while retaining pricing upside up to US$ 44 per barrel and any further upside in Brent price above US$ 59 per barrel.
- In the place of the reparticipating collar position ADX has secured a fixed price swap for an average Brent crude oil price from July 2020 to April 2021 for 40% of the Gaiselberg and Zistersdorf fields forecast proven (1P) oil production over this 10-month period at USD 41.77 per barrel.
- The revised hedging position in combination with the previously secured swaps at a fixed Brent price of US$ 50.64 per barrel ensures pricing certainty over approximately 80% of proven (1P) oil production at a an average Brent in excess of US$ 46 per barrel until the end of December 2020.
- The combined fixed swap position ensures certainty of cash flow to cover field operating costs, well work over costs and maintenance costs required to ensure optimal levels of production as well as local administrative costs to ensure ADX ongoing portfolio growth initiatives.
- The hedging counterparty for this transaction as well as the previous hedging is BP. The revised hedging position was initiated to take advantage of recent increase in Brent crude oil prices and to ensure field profitability during a period of ongoing price volatility, the worsening effects of the Corona virus in the US and ongoing inventory build despite the recent large cut back by OPEC.
Read more and download the whole pdf file here hedging-position-adjusted-for-austrian-production