6. Financial and derivative instruments (continued)
The fair value of the Corporation’s outstanding natural gas contracts is presented in the condensed consolidated statement of financial position as follows:
As at September 30, 2015
As at December 31, 2014
(millions)
$
9
Fair value of derivative instrument assets Fair value of derivative instrument liabilities
$
21
(89)
(107)
$
(80)
$
(86)
Financial assets and liabilities are offset within the condensed consolidated statement of financial position if the Corporation has the legal right to offset and intends to settle on a net basis. When natural gas contracts settle or become realized, the Corporation records the amount due to or from counterparties within trade payables or trade receivables, respectively. The Corporation offsets these amounts when the counterparty and timing of settlement are the same, which reflects the Corporation’s expected future cash flows from settling its natural gas contracts. At period end, the following amounts were netted within the condensed consolidated statement of financial position:
As at September 30, 2015
As at December 31, 2014
(millions)
Trade and other receivables Gross amount recognized
$
19
$
21
(10)
Amount offset
(13)
9
Net amount presented in the consolidated statement of financial position
8
Trade and other payables Gross amount recognized
28
37
(10)
Amount offset
(13)
$
18
Net amount presented in the consolidated statement of financial position
$
24
7. Property, plant and equipment
During the first quarter of 2015, as a result of the continued decline in natural gas liquid prices, the Corporation incurred a $3 million impairment loss on its gas gathering and processing assets. The impairment was recognized as the carrying value of the assets exceeded the recoverable amount. The recoverable amount was the value in use determined using cash flows attributed to probable production, discounted at 6.0%, and adjusted for future market prices. The impairment loss has been recognized within other (losses) gains.
8. Long-term debt
During the first quarter of 2015, the Corporation issued $50 million in long-term debt with an effective interest rate of 2.7%. The long-term debt was issued at a premium of $12 million.
9. Commitments and contingencies
At period end, the Corporation forecasted to spend an additional $91 million on capital projects during the remainder of 2015, and the Corporation had $49 million of outstanding contractual commitments for the procurement of goods and services in the future.
22
2015 THIRD QUARTER REPORT
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