Summary
EOG Resources, Inc. (EOG) filed an 8-K report on October 1, 2004, to disclose information regarding its financial commodity contracts for the third quarter of 2004. The company anticipates a slight decrease in the mark-to-market gain on its financial commodity collar and price swap contracts, reporting an expected gain of $22.7 million for Q3 2004 compared to $23.6 million in the prior year period. Additionally, the report details a net cash outflow related to settled commodity contracts, amounting to $32.3 million for Q3 2004, a notable increase from $10.0 million in the same period last year. This filing serves to update investors on the company's hedging activities and their financial impact. EOG clarified that no new natural gas financial collar or crude oil price swap contracts have been entered into since their last 10-Q filing on August 3, 2004. The company utilizes mark-to-market accounting for these derivative instruments, which are employed to enhance the certainty of future revenues. The report also includes a standard forward-looking statements section outlining various risks and uncertainties that could affect the company's performance.
Key Highlights
- 1EOG Resources anticipates a gain of $22.7 million on mark-to-market financial commodity contracts for Q3 2004.
- 2This anticipated Q3 2004 gain represents a slight decrease from the $23.6 million gain reported in Q3 2003.
- 3The company experienced a net cash outflow of $32.3 million from settled commodity contracts in Q3 2004.
- 4The Q3 2004 net cash outflow of $32.3 million is significantly higher than the $10.0 million outflow in the prior year period.
- 5EOG has not entered into any new natural gas or crude oil financial commodity contracts since its August 3, 2004, 10-Q filing.
- 6These financial contracts (collars and swaps) are used by EOG to enhance the certainty of future revenues.
- 7The company employs mark-to-market accounting for its financial commodity collar and price swap contracts.