Summary
EOG Resources, Inc. (EOG) filed an 8-K on August 30, 2002, to disclose its updated commodity hedging activities for the third and fourth quarters of 2002. The filing details the company's use of financial price swap and costless collar contracts for both natural gas and crude oil, aiming to enhance revenue certainty. Investors should note the specific price points and volumes covered by these derivative instruments, as they provide insight into EOG's strategy for managing price volatility in a key period. The company has entered into natural gas price swaps covering a significant portion of its notional volumes for the remainder of 2002, with average prices ranging from $3.11 to $3.35 per MMBtu. Additionally, a costless collar was established for October 2002, setting a floor price of $3.10 per MMBtu and an average ceiling of $3.43 per MMBtu for 100,000 MMBtud. For crude oil, EOG has swap contracts in place for 2,000 barrels per day at $21.50 per barrel through December 2002, with July contracts already closed.
Key Highlights
- 1EOG Resources entered into new costless collar contracts for natural gas on August 30, 2002.
- 2The natural gas costless collar covers October 2002 with a floor price of $3.10/MMBtu and an average ceiling of $3.43/MMBtu.
- 3Notional volumes for the new natural gas collar are 100,000 MMBtud.
- 4EOG has natural gas price swap contracts with average prices ranging from $3.11 to $3.35 per MMBtu for the remainder of 2002.
- 5Crude oil price swap contracts are in place for 2,000 barrels per day at $21.50 per barrel through December 2002.
- 6All disclosed commodity derivative contracts are accounted for under mark-to-market accounting.