This excerpt taken from the MRO 10-Q filed Nov 7, 2007.
Oil Sands Mining Segment
We have not attempted to qualify commodity derivative instruments outstanding upon the acquisition of Western for hedge accounting. As a result, we will recognize in net income all changes in the fair value of those derivatives.
Western purchased put options at strike prices ranging from $50.00 to $55.00 per barrel, averaging $52.42 per barrel for the three-year period beginning January 1, 2007. The premiums for the purchased put options were partially offset through the sale of call options at strike prices ranging from $90.00 to $95.00 per barrel, averaging $92.41 per barrel for the three-year period beginning January 1, 2007, resulting in a net premium liability. Payment of the net premium liability is deferred until the settlement of the option contracts between 2007 and 2009. The counterparties to these put and call options have investment grade credit ratings, thereby partially mitigating the credit risk associated with these financial instruments.