Why does ARC have a hedging program?
ARC is committed to actively managing its commodity price and foreign exchange exposure. ARC’s hedging activities are conducted by an internal Risk Management Committee, which has the following objectives as its mandate: • To help ensure the company can execute on its business plan; • Employ a portfolio approach to hedging by entering into a number of small positions that build upon each other; • Participate in commodity price upturns to the greatest extent possible, while limiting exposure to price downturns; and • Ensure profitability of specific oil and gas properties that are more sensitive to changes in market conditions. ARC’s commodity and foreign currency hedging transactions are undertaken with financially sound, credit worthy counterparties to reduce exposure to risk. All contracts require approval of the companies Risk Management Committee prior to execution.
