The decrease in revenue and changes in net income is described above in the Overall Performance section. Some of the major changes in Assets and Liabilities are described below:
-- Total assets decreased each year primarily due to depletion and asset impairments.-- Total long term financial liabilities in fiscal 2011 included the Cdn$310 million convertible debentures that moved to current liabilities in fiscal 2012. These debentures were repaid in fiscal 2013 using proceeds from issuance of Cdn$115 million senior unsecured convertible notes and Cdn$158 million of common shares, along with borrowings on the Company's credit facility and cash on hand.
The Company has a 45 percent interest in a Canadian property that is operated by a related party, a Company owned by the President and CEO of the Company. This joint interest originated as a result of the related party buying the interest of the third-party operator of the property in 2002. The transactions with the related party are not significant to operations or consolidated financial statements. The transactions with the related party are measured at estimated fair value.
The Company's financial instruments consist of short and long-term investments, accounts receivable, long-term accounts receivable, accounts payable and accrued liabilities, borrowings, convertible notes and convertible debentures.
The Company is exposed to fluctuations in the value of cash, accounts receivable, short-term investments, accounts payable and accrued liabilities due to changes in foreign exchange rates as these financial instruments are partially or wholly denominated in Canadian dollars and the local currencies of the countries in which it operate. The Company manages the risk by converting cash held in foreign currencies to U.S. dollars as required to fund forecasted expenditures. The Company is exposed to changes in foreign exchange rates as the future interest and principal amounts on the convertible notes are in Canadian dollars.
The Company is exposed to changes in the market value of the short-term investments.
The Company is exposed to credit risk with respect to all of its financial instruments if a customer or counterparty fails to meet its contractual obligations. The Company has deposited cash and restricted cash with reputable financial institutions, for which management believes the risk of loss to be remote. The Company takes measures in order to mitigate any risk of loss with respect to the accounts receivable, which may include obtaining guarantees.
The Company is exposed to the risk of changes in market prices of commodities. The Company enters into physical commodity contracts for the sale of natural gas, which partially mitigates this risk. The Company does so in the normal course of business by entering into contracts with fixed natural gas prices. The contracts are not classified as financial instruments because the Company expects to deliver all required volumes under the contracts. No amounts are recognized in the consolidated financial statements related to the contracts until such time as the associated volumes are delivered. The Company is exposed to the changes in the Brent crude price as the average Brent crude price from the preceding year (to a defined maximum) is a variable in the natural gas price for the current year, calculated annually, for the D6 Block natural gas contracts.