What is the financial impact of EOG's derivative contracts for the third quarter of 2017?

For the third quarter of 2017, EOG anticipates a non-cash net loss of $6.6 million from the mark-to-market accounting of its financial commodity derivative contracts. The company also reported receiving $2.1 million in net cash from the settlements of these contracts during the same period.

Has EOG entered into new derivative contracts recently?

According to the filing, EOG Resources has not entered into any additional crude oil or natural gas derivative contracts since filing its Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

What is the purpose of EOG's crude oil basis swap contracts?

EOG enters into crude oil basis swap contracts to fix the price differential between pricing in Midland, Texas, and Cushing, Oklahoma. This helps manage and reduce the variability of realized crude oil prices based on location.

What are EOG's hedged prices for crude oil and natural gas for 2018?

For crude oil, EOG has basis swap contracts for 2018 covering 15,000 Bbld with a weighted average price differential of $1.063/Bbl. For natural gas, EOG has price swap contracts for 2018 (March 1 - November 30) covering 35,000 MMBtud at a weighted average price of $3.00/MMBtu, and has sold call options with a ceiling price of $3.38/MMBtu and purchased put options with a floor price of $2.94/MMBtu for 120,000 MMBtud and 96,000 MMBtud respectively.

EOG 8-K: Regulation FD

Summary

This 8-K filing from EOG Resources, Inc. (EOG) on October 6, 2017, provides an update on the company's financial price risk management activities, primarily focusing on its derivative contracts for crude oil and natural gas. The report details EOG's use of various financial instruments such as swaps, options, and collars to enhance revenue certainty and manage price volatility. For the third quarter of 2017, EOG anticipates a minor non-cash net loss of $6.6 million from the mark-to-market of its derivative contracts, while net cash received from settlements was $2.1 million. The filing also outlines EOG's existing crude oil and natural gas derivative positions through late 2018 and into 2019, offering insight into the company's hedged price exposure for these commodities. Investors can use this information to gauge EOG's strategy in mitigating commodity price risk.

Key Highlights

1EOG Resources utilizes derivative contracts (swaps, options, collars) to manage price risk and enhance revenue certainty.
2For Q3 2017, EOG anticipates a non-cash net loss of $6.6 million from mark-to-market of financial commodity derivatives, with $2.1 million in net cash received from settlements.
3No new crude oil or natural gas derivative contracts were entered into since the last 10-Q filing.
4EOG has crude oil basis swap contracts covering 15,000 Bbld in 2018 at a weighted average differential of $1.063/Bbl and 20,000 Bbld in 2019 at $1.075/Bbl, aimed at fixing the differential between Midland, TX, and Cushing, OK prices.
5Summaries of existing crude oil price swap contracts, natural gas price swap contracts, natural gas option contracts (calls sold, puts purchased), and natural gas collar contracts are provided through late 2018.
6The filing includes a standard "Forward-Looking Statements" section detailing risks and uncertainties affecting EOG's future performance.
7The average NYMEX WTI crude oil price for Q3 2017 was $48.19/Bbl, and the average NYMEX natural gas at Henry Hub was $2.97/MMBtu.

EOG RESOURCES INC 8-K Report, Regulation FD Disclosure (Oct 6, 2017)

Summary

Key Highlights

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