Summary
EOG Resources, Inc. (EOG) has filed an 8-K report on April 8, 2008, detailing its price risk management activities. The company uses mark-to-market accounting for its financial commodity derivative contracts, including natural gas and crude oil price swap contracts. For the first quarter of 2008, EOG anticipates a significant unrealized loss of $469.8 million across both natural gas and crude oil financial price swap contracts. Specifically, natural gas swaps are expected to result in a loss of $442.5 million, while crude oil swaps are anticipated to incur a loss of $27.3 million. Despite these anticipated losses, EOG reported a net cash inflow of $23.2 million from settled derivative contracts in Q1 2008. The report also provides a comprehensive summary of outstanding natural gas and crude oil financial price swap contracts as of April 8, 2008, detailing notional volumes and weighted average prices through the end of 2009. The company reiterates that no new derivative contracts have been entered into since its February 28, 2008 10-K filing.
Key Highlights
- 1EOG Resources anticipates a total loss of $469.8 million from its natural gas and crude oil financial price swap contracts for the first quarter of 2008.
- 2The anticipated loss from natural gas financial price swap contracts is $442.5 million for Q1 2008.
- 3The anticipated loss from crude oil financial price swap contracts is $27.3 million for Q1 2008.
- 4EOG reported a net cash inflow of $23.2 million from settled derivative contracts in Q1 2008.
- 5The report provides detailed schedules of outstanding natural gas financial price swap contracts for 2008 and 2009, with average prices ranging from $8.10 to $9.36 per MMBtu.
- 6The report provides detailed schedules of outstanding crude oil financial price swap contracts for the remainder of 2008, with an average price of $92.20 per barrel.
- 7EOG has not entered into any new financial derivative contracts since its February 28, 2008 10-K filing.