Annual report pursuant to Section 13 and 15(d)

Note 9 - Derivative Financial Instruments

v3.20.4
Note 9 - Derivative Financial Instruments
12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

9. Derivative Financial Instruments

 

During 2020, 2019 and 2018, we entered into commodity contracts for crude oil and natural gas which related to a portion of our expected production for the time frames covered by the contracts.  The crude oil contracts were based on West Texas Intermediate (“WTI”) crude oil prices as quoted off the New York Mercantile Exchange (“NYMEX”).  The natural gas contracts are based on Henry Hub natural gas prices as quoted off the NYMEX.  The open contracts as of December 31, 2020 are presented in the following tables:

 

Crude Oil: Open Swap Contracts, Priced off WTI (NYMEX)

 

Period

 

Notional Quantity (Bbls/day)

   

Notional Quantity (Bbls)

   

Weighted Strike Price

 

Jan 2021 - Dec 2021

    4,000       1,460,000     $ 42.06  

Jan 2022 - Feb 2022

    3,000       177,000     $ 42.98  

Mar 2022 - May 2022

    2,044       188,006     $ 42.33  

 

Crude Oil: Open Collar Contracts - Priced off WTI (NYMEX)

 

Period

 

Notional Quantity (Bbls/day)

   

Notional Quantity (Bbls)

   

Put Option Weighted Strike Price (Bought)

   

Call Option Weighted Strike Price (Sold)

 

Jan.2021 - Feb 2022

    1,770       750,422     $ 35.00     $ 50.00  

Mar 2022 - May 2022

    2,000       184,000     $ 35.00     $ 48.50  

 

 

 

Natural Gas: Open Call Contracts, Bought, Priced off Henry Hub (NYMEX)

 

Period

 

Notional Quantity (MMBtu/day)

   

Notional Quantity (MMBtu)

   

Strike Price

 

Feb 2021 - Dec. 2022

    40,000       27,960,000     $ 3.00  

 

Natural Gas: Open Swap Contracts, Bought, Priced off Henry Hub (NYMEX)

 

Period

 

Notional Quantity (MMBtu/day)

   

Notional Quantity (MMBtu)

   

Strike Price

 

Jan 2021 - Dec 2021

    10,000       3,650,000     $ 2.62  

Jan 2022

    20,000       620,000     $ 2.79  

Feb 2022

    30,000       840,000     $ 2.79  

Mar 2022 - May 2022

    10,544       970,075     $ 2.69  

 

Natural Gas: Open Collar Contracts, Priced off Henry Hub (NYMEX)

 

Period

  Notional Quantity (MMBtu/day)     Notional Quantity (MMBtu)    

Put Option Weighted Strike Price (Bought)

   

Call Option Weighted Strike Price (Sold)

 

Jan 2021 - Dec 2022

    40,000       29,200,000     $ 1.83     $ 3.00  

Jan 2021 - Dec 2021

    30,000       10,950,000     $ 2.18     $ 3.00  

Jan 2022 - Feb 2022

    30,000       1,770,000     $ 2.20     $ 4.50  

Mar 2022 - May 2022

    10,000       92,000     $ 2.25     $

3.40

 

 

The following amounts were recorded in the Consolidated Balance Sheets in the categories presented and include the fair value of open contracts and closed contracts, which had not yet settled (in thousands):

 

   

December 31,

 
   

2020

   

2019

 

Prepaid and other assets – current

  $ 2,752     $ 7,266  

Other assets – non-current

    2,762       2,653  

Accrued liabilities

    13,620       1,785  

 

The amounts recorded on the Consolidated Balance Sheets are on a gross basis.  If these were recorded on a net settlement basis, it would not have resulted in any differences in reported amounts.

 

Changes in the fair value and settlements of our commodity derivative contracts were as follows (in thousands):

 

   

Year Ended December 31,

 
   

2020

   

2019

   

2018

 

Derivative loss (gain)

  $ (23,808 )   $ 59,887     $ (53,798 )

 

Cash receipts (payments), net, on commodity derivative contract settlements, which include derivative premium payments, are included within Net cash provided by operating activities on the Consolidated Statements of Cash Flows and were as follows (in thousands):

 

   

Year Ended December 31,

 
   

2020

   

2019

   

2018

 

Derivative cash receipts (payments), net

  $ 45,196     $ 13,941     $ (28,164 )