AGL has no unhedged exposure to oil-linked gas sales contracts
AGL Energy Limited (AGL) has today advised that its oil-linked gas sales contracts are fully hedged against the effect of movements in oil prices.
In its FY14 full year results presentation, AGL highlighted that it had entered into gas sales contracts with Queensland customers for the period FY15-FY17 (refer attached “Slide 27”).
Two of the contracts incorporated oil-linked pricing. Soon after entering into these contracts, AGL fully hedged its exposure to the oil price for the life of the contracts. Consequently, margins on the contracted sales in FY15, FY16 and FY17 are locked in, and not affected by the recent fall in oil prices.
The average margin on the 57 PJ gas sales expected in FY15 is $3.40/GJ.
AGL also confirms it has successfully contracted for the supply of 69 PJ of gas from the Otway Basin between 2018 to 2021.