8-KRegulation FD

EOG RESOURCES INC 8-K Report, Regulation FD Disclosure (Apr 14, 2009)

Filed April 14, 2009For Securities:EOG

Summary

EOG Resources Inc. (EOG) filed an 8-K on April 14, 2009, primarily to disclose updated information regarding its commodity price risk management activities. The company highlighted an anticipated net gain of $351.4 million from its natural gas financial collar, price swap, and basis swap contracts for the first quarter of 2009. This filing provides investors with detailed insights into EOG's hedging strategies, specifically its outstanding natural gas financial collar and price swap contracts for 2009 and 2010, along with basis swap contracts extending into 2011. Key details include the average floor and ceiling prices for 2010 natural gas collars, which are $10.00/MMBtu and $12.32/MMBtu, respectively. The filing also details recent price swap contracts entered into since their last 10-K, covering volumes in mid-2009 through late 2009 and into 2010, with average prices of $9.37/MMBtu for 2009 and $9.87/MMBtu for 2010. The basis swap contracts are designed to mitigate differentials between regional and Henry Hub natural gas prices. This disclosure is crucial for understanding EOG's revenue protection measures in a volatile commodity price environment.

Key Highlights

  • 1EOG Resources anticipates a $351.4 million net gain from natural gas financial derivatives (collars, swaps) for Q1 2009.
  • 2The company provided a comprehensive summary of its outstanding natural gas financial collar contracts for 2010, with an average floor price of $10.00/MMBtu and an average ceiling price of $12.32/MMBtu.
  • 3Since the last 10-K, EOG entered into new natural gas financial price swap contracts covering notional volumes from June 2009 through October 2009.
  • 4Average prices for the newly disclosed 2009 price swap contracts are $9.37/MMBtu, and for 2010 are $9.87/MMBtu.
  • 5The filing details natural gas financial basis swap contracts designed to manage regional price differentials, with average price differentials ranging from $(2.54)/MMBtu to $(3.73)/MMBtu for 2009-2010.
  • 6EOG accounts for its commodity derivative contracts using the mark-to-market accounting method.

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