Status of existing oil contract hedges, page-3

Hi Binbin

The oil swaps and the post Aneth contingent payments you are talking about are not the same thing. The oil swap is a hedging tool with a counterparty ( not Resolute) to receive a fixed price for a portion of the Aneth production. The contingent payments are to the benefit of Resolute as " compensation " for them as the oil price increases post acquisition... Effectively Elk is sharing some on the increase in Aneth NPV with deferred cash payments

The payments Elk are making to the counterparty are balanced by the increased price they get for the oil attributable to the swap, so the net effect is the same to Elk.

Cheers

Dan