| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
10. Derivative Financial Instruments
During 2021, 2020 and 2019, 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, 2021 are presented in the following tables:
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Average |
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Instrument |
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Daily |
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Total |
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Weighted |
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Weighted |
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Weighted |
Period |
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Type |
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Volumes |
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Volumes |
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Strike Price |
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Put Price |
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Call Price |
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Crude Oil - WTI (NYMEX) |
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(Bbls)(1) |
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(Bbls)(1) |
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($/Bbls)(1) |
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($/Bbls)(1) |
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($/Bbls)(1) |
Jan 2022 - Nov 2022 |
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swaps |
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2,525 |
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843,256 |
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$ |
49.99 |
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$ |
— |
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$ |
— |
Jan 2022 - Nov 2022 |
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collars |
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2,428 |
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811,096 |
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$ |
— |
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$ |
41.71 |
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$ |
58.91 |
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Natural Gas - Henry Hub (NYMEX) |
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(MMbtu)(2) |
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(MMbtu)(2) |
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($/MMbtu)(2) |
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($/MMbtu)(2) |
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($/MMbtu)(2) |
Jan 2022 - Dec 2022 |
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calls |
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116,853 |
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42,651,402 |
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$ |
— |
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$ |
— |
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$ |
3.93 |
Jan 2023 - Dec 2023 |
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calls |
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70,000 |
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25,550,000 |
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$ |
— |
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$ |
— |
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$ |
3.50 |
Jan 2024 - Dec 2024 |
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calls |
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65,000 |
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23,790,000 |
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$ |
— |
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$ |
— |
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$ |
3.50 |
Jan 2025 - Mar 2025 |
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calls |
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62,000 |
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5,580,000 |
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$ |
— |
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$ |
— |
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$ |
3.50 |
Jan 2022 - Dec 2022 |
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collars |
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47,370 |
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17,290,000 |
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$ |
— |
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$ |
1.89 |
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$ |
3.17 |
Jan 2022 - Nov 2022 |
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swaps |
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17,160 |
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5,731,485 |
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$ |
2.60 |
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$ |
— |
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$ |
— |
Jan 2022 - Dec 2022 (3) |
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swaps |
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78,904 |
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28,800,000 |
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$ |
2.69 |
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$ |
— |
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$ |
— |
Jan 2023 - Dec 2023 (3) |
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swaps |
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72,329 |
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26,400,000 |
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$ |
2.48 |
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$ |
— |
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$ |
— |
Jan 2024 - Dec 2024 (3) |
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swaps |
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65,574 |
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24,000,000 |
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$ |
2.46 |
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$ |
— |
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$ |
— |
Jan 2025 - Mar 2025 (3) |
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swaps |
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63,333 |
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5,700,000 |
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$ |
2.72 |
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$ |
— |
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$ |
— |
Apr 2025 - Dec 2025 (3) |
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puts |
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62,182 |
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17,100,000 |
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$ |
— |
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$ |
2.27 |
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$ |
— |
Jan 2026 - Dec 2026 (3) |
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puts |
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55,890 |
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20,400,000 |
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$ |
— |
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$ |
2.35 |
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$ |
— |
Jan 2027 - Dec 2027 (3) |
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puts |
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52,603 |
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19,200,000 |
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$ |
— |
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$ |
2.37 |
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$ |
— |
Jan 2028 - Apr 2028 (3) |
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puts |
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49,587 |
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6,000,000 |
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$ |
— |
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$ |
2.50 |
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$ |
— |
(2) |
MMbtu – Million British Thermal Units |
(3) |
These contracts were entered into by the Company’s wholly owned subsidiary, A-I LLC, in conjunction with the Mobile Bay Transaction (see Note 4 – Mobile Bay Transaction). |
The following amounts were recorded in the Consolidated Balance Sheets in the categories presented and include the fair value of open contracts as well as closed contracts that had not yet settled (in thousands):
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December 31, |
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2021 |
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2020 |
Prepaid expenses and other current assets |
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$ |
21,086 |
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$ |
2,752 |
Other assets (long-term) |
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34,435 |
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2,762 |
Accrued liabilities |
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81,456 |
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13,620 |
Other liabilities (long-term) |
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37,989 |
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4,384 |
The amounts recorded on the Consolidated Balance Sheets are on a gross basis.
Changes in the fair value and settlements of contracts are recorded on the Consolidated Statements of Operations as Derivative loss (gain). The impact of our commodity derivative contracts has on the Consolidated Statements of Operations were as follows (in thousands):
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Year Ended December 31, |
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2021 |
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2020 |
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2019 |
Realized loss (gain) |
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$ |
95,187 |
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$ |
(33,415) |
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$ |
884 |
Unrealized loss (gain) |
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80,126 |
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9,607 |
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59,003 |
Derivative loss (gain) |
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175,313 |
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(23,808) |
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59,887 |
Cash payments on commodity derivative contract settlements, net, are included within Net cash provided by operating activities on the Consolidated Statements of Cash Flows and were as follows (in thousands):
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Year Ended December 31, |
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2021 |
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2020 |
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2019 |
Derivative loss (gain) |
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$ |
175,313 |
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$ |
(23,808) |
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$ |
59,887 |
Derivative cash (payments) receipts, net |
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(81,298) |
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45,196 |
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22,064 |
Derivative cash premium payments |
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(40,484) |
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— |
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(8,123) |
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