Encana issued the following announcement on April 02.
Ovintiv Inc. restructured its crude oil derivatives positions to provide additional downside protection for the balance of 2020. In addition, the Company now plans to further reduce its second quarter investments by an additional $200 million, bringing total capital reductions in the second quarter to $500 million. Updated hedge and sensitivity tables are included within this release.
"We have built our Company with tremendous flexibility and optionality for volatile and uncertain times like we are currently experiencing," said Ovintiv CEO Doug Suttles. "We are using and expect to continue to use this flexibility as market conditions evolve. We have created more certainty in our cash flow by restructuring oil hedges and further reducing second quarter capital spending. We will have additional details when we report our first quarter earnings and operating results."
- Ovintiv Inc--Ovintiv Restructures Crude Oil Derivatives to Provi
- Ovintiv is now substantially hedged on benchmark oil risk for the near term. For the second quarter of 2020, 206 Mbbls/d is hedged at an average price of $42.09 per barrel. Of these positions 191 Mbbls/d is in a fixed price swap at $41.47 per barrel and 15 Mbbls/d is covered by costless collars between $50.00 and $68.71 per barrel. The term "benchmark" above refers to NYMEX WTI and NYMEX Henry Hub.
- With these updated positions, downside oil price risk is further reduced. A balance of year $20.00 NYMEX WTI price would generate oil hedge revenues of more than $1.1 billion. This amount excludes oil hedge settlements in the first quarter of 2020. Settlements for natural gas and various other oil differential and natural gas basis positions in 2020 are expected to further add to oil hedge revenues.
Hedge Volumes as of April 1, 2020 for the balance of the year:
| Natural Gas Hedges | 2020 | Oil & Condensate Hedges | 2020 | |
| Total Hedges | 1,196 MMcf/d | Total Hedges | 183 Mbbls/d | |
| Hedges ($/Mcf) | Hedges ($/bbl) | |||
| NYMEX Swaps
Swap Price | 811 MMcf/d
$2.65 | WTI Swaps
Swap Price | 141 Mbbls/d
$45.30 | |
| NYMEX 3-Way Options
Short Call Long Put Short Put | 330 MMcf/d
$2.72 $2.60 $2.25 | WTI 3-Way Options
Short Call Long Put Short Put | 27 Mbbls/d
$61.68 $53.44 $43.44 | |
| NYMEX Costless Collars
Short Call Long Put | 55 MMcf/d
$2.88 $2.50 | WTI Costless Collars
Short Call Long Put | 15 Mbbls/d
$68.71 $50.00 | |
| Basis Hedges ($/Mcf) | Basis Hedges ($/bbl) | |||
| AECO Basis Swaps
Swap Price | 305 MMcfd
($0.88) | WTI / Midland Swaps
Swap Price | 7 Mbbls/d
($1.20) | |
| WAHA Basis Swaps
Swap Price | 105 MMcf/d
($0.91) | |||
"Updated" Price Sensitivities for WTI Oil Hedge Gains/Losses by Quarter for 2020 ($ MM):
| Period | $10 | $20 | $30 | $40 | $50 |
| 2Q 2020 | 602 | 414 | 227 | 39 | (148) |
| 3Q 2020 | 565 | 404 | 243 | 82 | (79) |
| 4Q 2020 | 440 | 360 | 280 | 200 | 71 |
| Q2-Q4 Total | 1,607 | 1,178 | 750 | 321 | (156) |
Price Sensitivities for NYMEX Natural Gas Hedge Gains/Losses by Quarter for 2020 ($ MM)
| Period | $1.00 | $1.25 | $1.50 | $1.75 | $2.00 | $2.25 |
| 2Q 2020 | 143 | 123 | 103 | 83 | 63 | 44 |
| 3Q 2020 | 145 | 125 | 104 | 84 | 64 | 44 |
| 4Q 2020 | 141 | 121 | 102 | 82 | 63 | 43 |
| Q2-Q4 Total | 429 | 369 | 309 | 249 | 190 | 131 |
| Note: | Sensitivities do not include gains or losses related to differential hedges. |
| Note: | Company has additional hedges on Butane and Propane not included. |
Original source can be found here.