Commodity Hedging Overview February 25, 2013 The following information is current as of February 25, 2013. Eagle Rock intends to provide updates to this information quarterly to the extent of changes within the quarter. Eagle Rock…
Hedge Update Recent Activity The Partnership has entered into the following commodity hedges since its last hedging update on October 31, 2012. These hedges were structured as at-the-money swaps and involved no up-front cost to the…
Hedge Update Summary Hedge Positions Includes Both Upstream and Midstream Hedgeable Volumes Crude, Condensate and NGLs (C2) (1) Ethane and Natural Gas (1) 100% 100% 80% 80% 60% 60% 40% 80% 40% 82% 76% 66% 20% 20%…
Hedge Update Derivative Portfolio Eagle Rocks full commodity derivative portfolio, other than hedging transactions related to Eagle Rock Gas Services natural gas marketing and trading activities, as of February 25, 2013 is shown on…
Commodity Hedging Agreements as of: 2/25/2013 term monthly swap price / year underlying type start end quantity floor price ceiling price months total quantity units segment 2013 NYMEX WTI swap Jan-13 Dec-13 20,000 98.01 12 240,000 bbls…
Hedging Objectives Eagle Rocks management recognizes that commodity price volatility can cause significant changes in cash flow, and these changes can affect Eagle Rock's ability to achieve its distribution objectives and also its…
Hedging Processes and Controls Risk Management Policy Eagle Rock has a Risk Management Policy that sets forth the limits that have been previously approved by its Board of Directors and is amended from time to time. The Risk…
Hedging Processes and Controls Risk Management Committee The Risk Management Committee is currently comprised of the following Chief Executive Officer Senior Vice President, Chief Financial Officer and Treasurer (Chair) Senior…
Hedging Processes and Controls Internal Controls Eagle Rock maintains extensive internal controls to ensure the proper execution, valuation and reporting of derivative transactions. As part of these controls, Eagle Rock has…
Hedging Methods Quantities Hedged Eagle Rock bases its volumes available for hedging on its expected future production. For the Upstream Business, the expected future production is derived from expected future production from proved…
Hedging Methods Types of Derivatives Used Eagle Rock generally uses put options, costless collars, and fixed price swaps to achieve its hedging objectives. There are other hedging strategies that use more than two options; however,…
Special Issues Use of Proxy Hedges When applicable, Eagle Rock hedges its future volumes with derivatives that are based on the same commodity. In some cases, however, Eagle Rock believes it is better to hedge future changes in the…
Special Issues Midstream Segments Short Natural Gas Position Eagle Rocks Midstream business has a long and a short physical position in its expected future natural gas production streams. The long position is derived from its…
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