Paramount Energy Trust maintains a policy of utilizing derivative financial instruments (hedges) in order to maximize the price obtained for natural gas production. Continuous market surveillance and analysis by our dedicated gas marketing team leads PET to employ various hedging tools and pricing arrangements to, among other things:
- Protect the level of monthly distributions;
- Enhance or protect the economics of an acquisition by capturing pricing either at the same level or higher than the original evaluation; and
- Capitalize on short-term anomalies in the market.
On an ongoing basis we intend to utilize derivative financial instruments to manage our exposure to such factors.
PET currently has the following combined fixed and option hedges in place.
Volume | Price ($/GJ)(1)(2) | Term | % 0f Current Production(3) |
| 111,000 GJ/d | $ 7.55 | August 2008 | 52% |
102,500 GJ/d | $ 7.47 | September 2008 - October 2008 | 48 % |
98,500 GJ/d | $ 7.79 | November 2008 - March 2009 | 46 % |
5,000 GJ/d | $ 11.11 | January 2009 | 2 % |
55,000 GJ/d | $ 8.79 | April 2009 - October 2009 | 26 % |
22,500 GJ/d | $ 9.99 | November 2009 - March 2010 | 10 % |
**updated Thursday July 24, 2008