8-KRegulation FD

EOG RESOURCES INC 8-K Report, Regulation FD Disclosure (Jul 15, 2010)

Filed July 15, 2010For Securities:EOG

Summary

EOG Resources Inc. (EOG) filed an 8-K on July 15, 2010, primarily disclosing its commodity price risk management activities. For the second quarter of 2010, the company anticipates a non-cash mark-to-market gain of $37.0 million on its financial collar, price swap, and basis swap contracts related to natural gas and crude oil. Additionally, EOG reported a net cash inflow of $15.9 million from settled natural gas derivative contracts during the same period. Notably, as of July 1, 2010, EOG had no outstanding natural gas financial collar or price swap contracts. The filing also provides details on outstanding natural gas financial basis swap contracts and crude oil financial price swap contracts, outlining notional volumes and weighted average prices for the remainder of 2010 and into 2011. These disclosures aim to provide investors with greater clarity on the company's hedging strategies and their expected financial impact.

Key Highlights

  • 1Anticipates a $37.0 million non-cash gain in Q2 2010 from mark-to-market accounting on natural gas and crude oil derivative contracts.
  • 2Reported a $15.9 million net cash inflow from settled natural gas derivative contracts in Q2 2010.
  • 3As of July 1, 2010, EOG has no outstanding natural gas financial collar or price swap contracts.
  • 4Details outstanding natural gas financial basis swap contracts through Q1 2011, fixing basis differentials in the Rocky Mountain area.
  • 5Provides a summary of crude oil financial price swap contracts outstanding from September 2010 through December 2011, with weighted average prices of $91.50/bbl in 2010 and $93.18/bbl in 2011.
  • 6The filing emphasizes the use of derivative contracts to enhance the certainty of future revenues.
  • 7Includes a comprehensive 'Forward-Looking Statements' section outlining risks and uncertainties that could affect actual results.

Frequently Asked Questions

This 8-K filing's primary purpose is to disclose EOG Resources' commodity price risk management activities. It provides updates on their use of financial collar, price swap, and basis swap contracts for natural gas and crude oil, along with their anticipated financial impact.

For the second quarter of 2010, EOG anticipated a non-cash net gain of $37.0 million from the mark-to-market accounting of its derivative contracts. Additionally, there was a net cash inflow of $15.9 million from settled natural gas derivative contracts.

As of July 1, 2010, EOG reported that it had no outstanding natural gas financial collar or price swap contracts. However, the company does have outstanding natural gas financial basis swap contracts detailed in the filing.

EOG has crude oil financial price swap contracts in place for the period starting September 1, 2010, through December 31, 2011. The weighted average price for these contracts is $91.50 per barrel for the remainder of 2010 and $93.18 per barrel for 2011.