4/11/00 9:57 AM
ARC Resources’ Board of Directors approved an expanded hedging program in 1999 under which financial hedges can be entered into in respect of commodity prices and foreign currency exchange rates in addition to physical hedges. The Board approved the hedging of up to 50 percent of the Trust’s production on a Boe basis for up to 12 months in the future, up to 25 percent of production for the period commencing one year in the future for a maximum of 12 months and up to 15 percent of production for the period commencing two years into the future for up to 36 months. A summary of financial and physical contracts in respect of hedging activities can be found in Management’s Discussion and Analysis.
Environment and Safety
ARC Resources is firmly committed to conducting its operations in a safe and environmentally responsible manner. Management, staff and contractors are responsible for ensuring that operations are conducted in accordance with all current environmental and occupational health and safety laws and regulations. During 1999, all ARC Resources’ personnel conducted safe operations with zero lost-time accidents. The ARC Resources’ Operations Safety Policies and Guidelines and ARC Resources’ Emergency Response Procedures were updated during the year to include the sour operations that were acquired in the Starcor and Orion transactions. During 1999, initiatives to reduce previously flared gas streams were successfully implemented. Highlights include the installation of a vapour recovery unit (“VRU”) and the installation of an emissions-free, dessicant-based gas dehydration system at the Sundre Unit #1 battery. Based on the technical and environmental success of these projects, further installations are planned at other locations. In addition, the flare stack at the Sundre waterflood was completely removed and gases from this facility are now conserved by the VRU. A reclamation fund has been established to ensure that the necessary funds are available for future reclamation and abandonment of all wells, plants and facilities. Total funding during the year net of actual abandonment expenditures amounted to $2.4 million, increasing the balance in the Fund at December 31, 1999 to $7.2 million. ARC Resources has a continuing program of well-site abandonment, cleanup and restoration to reduce future environmental liabilities.
ARC ENERGY TRUST