Summary
EOG Resources, Inc. (EOG) filed an 8-K on January 5, 2007, providing an update on its commodity price risk management activities for the fourth quarter of 2006 and detailing its financial derivative positions as of January 4, 2007. The company anticipates a total gain of $31.5 million from both natural gas and crude oil financial price swap contracts in Q4 2006, with a net cash inflow of $48.2 million from settled natural gas contracts. This filing highlights EOG's active use of financial derivatives to enhance revenue certainty. Specifically, it details new natural gas financial price swap contracts entered into for 2007, covering significant volumes at an average price of $8.50 per MMBtu. The company also reported no new crude oil derivative contracts since its last 10-Q filing, maintaining an average price of $78.22 per barrel for its existing crude oil swaps.
Key Highlights
- 1EOG anticipates a $31.5 million total gain from natural gas and crude oil financial price swap contracts for Q4 2006.
- 2A net cash inflow of $48.2 million was realized in Q4 2006 from settled natural gas financial price swap contracts.
- 3EOG has entered into new natural gas financial price swap contracts for 2007, covering 15,000 MMBtud at an average price of $8.50/MMBtu.
- 4As of January 4, 2007, EOG has no outstanding natural gas financial collar contracts.
- 5The average price for EOG's natural gas financial price swap contracts is $9.61/MMBtu.
- 6No new crude oil financial price swap contracts have been added since the Form 10-Q filed on November 1, 2006.
- 7The average price for EOG's crude oil financial price swap contracts is $78.22 per barrel.