Summary
EOG Resources Inc. (EOG) filed an 8-K on April 3, 2007, primarily to disclose information regarding its commodity price risk management activities. The company uses financial commodity collar and price swap contracts, accounted for using the mark-to-market method, to enhance revenue certainty. For the first quarter of 2007, EOG anticipates a total anticipated loss of $39.8 million from both natural gas and crude oil financial price swap contracts. This filing provides details on outstanding natural gas and crude oil financial price swap contracts through December 2007, including notional volumes and weighted average prices.
Key Highlights
- 1EOG Resources uses financial commodity collar and price swap contracts to manage commodity price risk.
- 2The company employs mark-to-market accounting for these derivative contracts.
- 3For Q1 2007, EOG anticipates a total loss of $39.8 million from natural gas and crude oil financial price swaps.
- 4Despite the anticipated loss, there was a net cash inflow of $47.3 million from settled gas and oil swaps in Q1 2007.
- 5EOG has not entered into new natural gas or crude oil financial price swap contracts since its February 28, 2007 10-K filing.
- 6Outstanding natural gas financial price swap contracts have an average price of $9.19/MMBtu.
- 7Outstanding crude oil financial price swap contracts have an average price of $78.13/barrel.
Frequently Asked Questions
EOG Resources anticipates a total loss of $39.8 million from both natural gas and crude oil financial price swap contracts for the first quarter of 2007. However, it's important to note that during the same period, there was a net cash inflow of $47.3 million related to settled contracts.
No, EOG has not entered into any additional natural gas or crude oil financial price swap contracts since its Annual Report on Form 10-K was filed on February 28, 2007. The company currently has no outstanding financial collar contracts.
As of April 3, 2007, EOG has outstanding natural gas financial price swap contracts with a weighted average price of $9.19 per million British thermal units (MMBtu). The contracts cover notional volumes of 120,000 MMBtu per day from April through December 2007, with prices fluctuating slightly over this period, ending at $10.70/MMBtu in December.
As of April 3, 2007, EOG has outstanding crude oil financial price swap contracts with a weighted average price of $78.13 per barrel. These contracts are for a notional volume of 4,000 barrels per day and extend through December 2007, with prices decreasing slightly to $77.57/barrel by December.