Commodity prices Commodity price risk is the risk that the fair value of future cash flows will fluctuate as a result of changes in  commodity prices. Commodity prices for crude oil, natural gas and natural gas liquids are affected by many known  and unknown factors such as demand and supply imbalances, market access, the relationship between the Canadian  and United States dollar as well as national and international economic and geopolitical events. The Company is exposed to the risk of declining prices for production resulting in a corresponding reduction in  projected cash flow. Reduced cash flow may result in lower levels of capital being available for field activity, thus  compromising the Company’ s capacity to grow total production while at the same time replacing continuous  production declines from existing properties. Bank financing available to the Company is in the form of a production  loan, which is reviewed semi-annually, and which is based on future cash flows and commodity price expectations. Changes to commodity prices will have an effect on credit available to the Company under its banking agreement.  The Company enters into contracts which may involve financial instruments, in order to reduce the fluctuation in  production revenue by fixing prices of future deliveries of crude oil and natural gas and thus provide stability of cash  flow. The Company does not use these instruments for trading or speculative purposes.  Fair values for commodity price contracts are based on quotes received from financial institution counterparties and  are calculated using current market rates and prices and option pricing models using forward pricing curves and  implied volatility.  As at December 31, 2014, Storm had the undernoted commodity price contracts in place. The fair market value of  these contracts of $12,920,000 (December 31, 2013 –liability of $1,248,000) is included in current assets and the  resulting unrealized mark-to-market gain of $14,168,000 (2013 –loss of $1,477,000) is recognized in the  consolidated statement of income (loss). In January 2015 the Company terminated all of the crude oil contracts listed  below in exchange for $5.1 million which will be included in the calculation of 2015 net income. In February 2015 the  Company added an additional fixed contract for 4,000 GJ/day of natural gas at an AECO price of $2.85 per GJ for the  period from April 1, 2015 to September 30, 2015.  WTI Crude Oil  AECO Natural Gas  Volume  Average Price  (Cdn$/Bbl)  Volume  Average Price  (Cdn$/GJ)  Fixed Price  Q1 –2015  600 Bbls/day  $101.06  2,000 GJ/day $3.62  Q2 –2015 600 Bbls/day  $ 98.34  21,667 GJ/day  $3.33  Q3 –2015 400 Bbls/day  $ 94.61  30,000 GJ/day  $3.33  Q4 –2015 30,000 GJ/day  $3.47  Collars  Average Range  (Cdn$/Bbl)  Average Range  (Cdn$/GJ)  Q1 –2015  28,000 GJ/day  $3.62 - $4.41  During 2014, the Company realized losses from commodity price contracts in place in the amount of $3,198,000  (2013 –loss of $36,000).  All crude oil contracts are based on a WTI price in US$ per barrel which is then converted to Cdn$ using the foreign  exchange rate when the contract is executed. All natural gas contracts are based on the AECO monthly index price.  The value of the investment in Chinook held by the Company is affected by price fluctuations as the shares of  Chinook are listed on the Toronto Stock Exchange.  Interest on the Company’ s revolving bank facility varies with changes in core interest rates and is most commonly  based on bankers acceptances issued by the Company’ s banks, plus a stamping fee. The stamping fee changes  based on the Company’ s debt-to-cash-flow ratio for the previous quarter. The Company is thus exposed to increased  borrowing costs during periods of increasing interest rates, with a corresponding reduction in both cash flows and  project economics.  66  Interest rates Prices of listed securities 