After Horizon ran out of hedging during the big POO collapse they brought a risk management specialist onto the Board and implemented
a new comprehensive hedging program. The company was then criticised for hedging too much and wasting money. The current POO is still way above the hedging price but it is good to know that there is a safety net in place, just in case.
Oil price hedging
Loss‐of‐production‐insurance (LOPI)
• 850,000 barrels hedged Apr‐18 to Mar‐19 at an average of US$59/bbl
• Over US$62 million of revenue insured in the event of production losses arising from insurable events
• Protects >US$50 million of revenue from oil price volatility
• Lost production covered for up to 365 days following 45 – 90 day wait period
• Policy is to add more layers of hedging as appropriate
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