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Risk Management (Tables) | 9 Months Ended
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Sep. 30, 2021
Risk Management [Abstract] |
Net Fair Value of Risk Management Positions | Net Fair Value of Risk Management Positions
As at September 30, 2021 | Notional Volumes (1) (2) |  | Terms (3) |  | Weighted Average Price (1) |  | Fair Value Asset (Liability) |
Crude Oil and Condensate Contracts |  |  |  |  |  |  |  |  |  |  |  |
WTI Fixed – Sell | 55.9 MMbbls |  |  | October 2021 - December 2022 |  |  | US$67.29/bbl |  |  |  | (495) |
WTI Fixed – Buy | 21.1 MMbbls |  |  | October 2021 - September 2022 |  |  | US$67.15/bbl |  |  |  | 185 |
Other Financial Positions (4) |  |  |  |  |  |  |  |  |  |  | 18 |
Total Fair Value |  |  |  |  |  |  |  |  |  |  | (292) |
(1) Million barrels (“MMbbls”). Barrel (“bbl”). (2) Notional volumes and weighted average price represent various contracts over the respective terms. The notional volumes and weighted average price may fluctuate from month to month as it represents the averages for various individual contracts with different terms. (3) Contract terms represent various individual contracts with different terms, and range from one to fifteen months. (4) Other financial positions consist of risk management positions related to WCS and condensate differential contracts, Belvieu fixed contracts, reformulated blendstock for oxygenate blending gasoline contracts, heating oil and natural gas fixed price contracts, foreign exchange contracts, the Company’s U.S. Manufacturing segment and marketing activities.
Summary of Changes in Inputs to Option Pricing Model, Resulted in Unrealized Gains (Losses) Impacting Earnings Before Income Tax | Changes in the following inputs to the option pricing model, with fluctuations in all other variables held constant, could have resulted in unrealized gains (losses) impacting earnings before income tax as follows:
As at September 30, 2021 | Sensitivity Range |  |  | Increase |  |  |  | Decrease |
WCS Forward Prices | ± $5.00 per barrel |  |  | (74) |  |  |  | 74 |
WTI Option Implied Volatility | ± five percent |  |  | (1) |  |  |  | 1 |
Canadian to U.S. Dollar Foreign Exchange Rate Option Implied Volatility | ± five percent |  |  | — |  |  |  | — |
The following table summarizes the sensitivity of the fair value of Cenovus’s risk management positions to independent fluctuations in commodity prices and foreign exchange rates, with all other variables held constant. Management believes the fluctuations identified in the table below are a reasonable measure of volatility. The impact of fluctuating commodity prices on the Company’s open risk management positions could have resulted in an unrealized gain (loss) impacting earnings before income tax as follows:
As at September 30, 2021 | Sensitivity Range |  |  | Increase |  |  |  | Decrease |
Crude Oil Commodity Price | ± US$5.00/bbl Applied to WTI, Condensate and Related Hedges |  |  | (199) |  |  |  | 199 |
WCS and Condensate Differential Price | ± US$2.50/bbl Applied to WCS and Differential Hedges Tied to Production |  |  | 5 |  |  |  | (5) |
Refined Products Commodity Price | ± US$5.00/bbl Applied to Heating Oil and Gasoline Hedges |  |  | (11) |  |  |  | 11 |
U.S. to Canadian Dollar Exchange Rate | ± 0.05 in the U.S. to Canadian Dollar Exchange Rate |  |  | 11 |  |  |  | (12) |
Undiscounted Cash Outflows Relating to Financial Liabilities | Undiscounted cash outflows relating to financial liabilities are:
As at September 30, 2021 | Less Than 1 Year |  |  | Years 2 and 3 |  |  |  | Years 4 and 5 |  | Thereafter |  |  | Total |
Accounts Payable and Accrued Liabilities |  | 5,735 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,735 |
Short-Term Borrowings (1) |  | 48 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 48 |
Long-Term Debt (1) |  | 1,124 |  |  |  | 1,621 |  |  |  | 2,612 |  |  |  | 15,109 |  |  |  | 20,466 |
Contingent Payment |  | 396 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 396 |
Lease Liabilities (1) |  | 448 |  |  |  | 782 |  |  |  | 628 |  |  |  | 3,176 |  |  |  | 5,034 |
As at December 31, 2020 | Less Than 1 Year |  |  | Years 2 and 3 |  |  |  | Years 4 and 5 |  | Thereafter |  |  | Total |
Accounts Payable and Accrued Liabilities |  | 2,018 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,018 |
Short-Term Borrowings (1) |  | 121 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 121 |
Long-Term Debt (1) |  | 385 |  |  |  | 1,965 |  |  |  | 1,966 |  |  |  | 8,627 |  |  |  | 12,943 |
Contingent Payment |  | 36 |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | 64 |
Lease Liabilities (1) |  | 254 |  |  |  | 445 |  |  |  | 365 |  |  |  | 1,412 |  |  |  | 2,476 |
(1) Principal and interest, including current portion if applicable.

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