NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  NOTE 33 – FINANCIAL RISK MANAGEMENT continued  The Group’s interest rate risk arises from its borrowings. Interest rate risk is the risk that the fair value of future  cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s  exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt  obligations with floating interest rates.  During the year ended 31 December 2013, the Group entered into US dollar denominated interest rate swaps  which fix the interest rate associated with the credit facilities to protect against the floating LIBOR rates through  2017. As at 31 December 2014 the Group had interest rate swaps with a notional contract amount of $15.0  million (2013: $15.0 million).  The net fair value of interest rate swaps at 31 December 2014 was relatively immaterial, comprising long-term  assets of $0.1 million (2013: $0.2 million) and current liabilities of $0.1 million (2013: 0.1 million). These  amounts were recognised as Level 2 fair value derivatives. (See Note 14) The Board actively reviews oil and natural gas hedging on a monthly basis. Reports providing detailed analysis  of the Group’s hedging activity are continually monitored against Group policy. The Group sells its oil on market  using Nymex and LLS market spot rates reduced for basis differentials in the basins from which the Company  produces. Gas is sold using Henry Hub and Houston Ship Channel market spot prices. Forward contracts are  used by the Group to manage its forward commodity price risk exposure. The Group’s policy is to hedge less  than 50% of anticipated future oil and gas production for up to 24 months. The Group may hedge over 50% or  beyond 24 months with approval of the Board. The Group has not elected to utilise hedge accounting treatment  and changes in fair value are recognised in the statement of profit or loss and other comprehensive income.  Commodity Hedge Contracts outstanding as at 31 December 2014 iii) Commodity Price Risk Exposure and Management  Contract Type  Counterparty  Basis  Quantity/mo  Strike Price  Term  Collar  Wells Fargo  WTI  2,000 BBL  $75.00/$98.65  1 Jan 15 – 31 Dec 15  Collar  Shell Trading US  LLS  3,000 BBL  $85.00/$101.05  1 Jan 15 – 31 Dec 15  Collar  Wells Fargo  WTI  2,000 BBL  $80.00/$97.00  1 Jan 15 – 31 Dec 15  Collar  Wells Fargo  WTI  1,000 BBL  $80.00/$94.94  1 Jan 15 – 31 Dec 15 Swap  Wells Fargo  LLS  2,000 BBL  $91.65  1 Jan 15 – 31 Dec 15 Swap  Shell Trading US  LLS  5,000 BBL  $98.05  1 Jan 15 – 30 Jun 15 Swap  Shell Trading US  LLS  3,000 BBL  $94.10  1 Jul 15 – 31 Dec 15 Swap  Wells Fargo  WTI  2,000 BBL  $95.08  1 Jan 15 – 31 Dec 15 Swap  Wells Fargo  LLS  2,000 BBL  $97.74  1 Jan 15 – 31 Dec 15 Swap  Shell Trading US  LLS  5,000 BBL  $100.70  1 Jan 15 – 30 Jun 15 Swap  Shell Trading US  LLS  5,000 BBL  $94.10  1 Jan 16 – 31 Dec 16 Swap  Shell Trading US  HH  20,000 MCF  $4.14  1 Jan 15 – 31 Dec 15  - 98 - 