4. Capital management
Under The SaskEnergy Act , the Corporation may borrow up to $1,700 million of debt upon approval of the Lieutenant Governor in Council. During the third quarter, the Corporation’s received approval to borrow up to $500 million in temporary loans, an increase of $100 million to the previously approved short-term borrowing limit. The short-term borrowing limit falls within the Corporation's overall debt limit, which remains unchanged from year end.
5. Trade and other receivables
Included in other receivables is $4 million for insurance receivable on a cavern wellhead fire that occurred in the latter part of 2014. Total damages from this incident are estimated at $12 million. The Corporation is insured for the loss of natural gas, emergency response, and surface facilities and equipment. To date, the Corporation has received $5 million of insurance proceeds and an additional $4 million in commitments from insurers. The $4 million in commitments from insurers is recognized in other losses (gains), as it pertains to costs incurred in the prior year. The Corporation's claim for the remaining $3 million is currently being assessed by the insurers for resolution in due course.
6. Natural gas in storage held for resale
As at December 31, 2015
As at December 31, 2014
(millions)
$
147
Cost
$
163
(24)
Revaluation to net realizable value
(23)
$
123
$
140
With the decline in natural gas market prices over recent years, the net realizable value of natural gas in storage at the end of the quarter was $24 million below cost (December 31, 2014 - $23 million below cost). As at December 31, 2015, the Corporation expected that $75 million of the current inventory value would be sold or consumed within the next year, and $48 million of the current inventory value would be sold or consumed after more than one year.
21
2015/2016 FOURTH QUARTER REPORT
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