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Written by THE CANADIAN PRESS
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Wednesday, 13 August 2008 |
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CALGARY - Enterra Energy Trust (TSX:ENT.UN), a Calgary-based oil and gas producer, reported a net loss of $11.9 million for the second quarter as the company booked a loss for hedging contracts.
Enterra said Wednesday it lost 19 cents a unit for the second quarter ended June 30, reversing a net profit of $7.9 million or 13 cents a unit in the year-ago period.
The second quarter loss stems from an unrealized mark-to-market loss of $21.5 million on commodity price hedges because oil prices rose to record levels over the quarter and hurt the value of the trust's futures contracts.
Revenues rose 21 per cent to $71 million from $58.6 million.
In the quarter, the trust had average production of 10,099 barrels of oil equivalent output a day, on target with previous estimates.
"It is important to note that the hedging loss for the quarter was non-cash, and does not necessarily reflect the expected future cash settlement value of the contracts," said Blaine Boerchers, chief financial officer of Enterra.
"As of June 30, the oil hedged represents less than one third of Enterra's oil production and therefore any actual cash cost of these hedges will be more than offset by higher prices received on the non-hedged production."
Enterra said it has recently focused its hedging strategy on buying floor price options to better maximize its exposure to rising oil and gas prices while ensuring enough cash flows for operations.
Enterra is an exploration and production trust with producing properties in Alberta, British Columbia, Saskatchewan and Oklahoma. Production is 63 per cent natural gas and 37 per cent crude oil and natural gas liquids.
In early trading Wednesday on the TSX, Enterra units rose 14 cents to $3.60, a gain of more than four per cent.
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Last Updated ( Wednesday, 13 August 2008 )
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