8-KRegulation FD

EOG RESOURCES INC 8-K Report, Regulation FD Disclosure (Feb 13, 2018)

Filed February 13, 2018For Securities:EOG

Summary

EOG Resources, Inc. (EOG) filed an 8-K on February 13, 2018, primarily to update investors on its commodity price risk management activities. The company anticipates a non-cash net loss of $45.0 million for the fourth quarter of 2017 related to the mark-to-market of its financial commodity derivative contracts, although it also reported net cash received from settlements of $2.7 million for the same period. This filing details EOG's ongoing use of financial derivatives, including swaps and options, to manage price volatility for both crude oil and natural gas. Significant updates are provided regarding EOG's crude oil derivative positions, particularly through basis swaps that aim to fix differentials between key pricing hubs like Midland, Texas, and Cushing, Oklahoma, as well as the U.S. Gulf Coast and Cushing. The company has also updated its summary of crude oil price swap contracts for 2018, indicating hedged volumes at an average price of $60.04 per barrel. For natural gas, the filing outlines remaining swap, option, and collar contracts for 2018, providing visibility into hedged volumes and prices. These disclosures offer investors a clearer picture of EOG's strategies to secure future revenues against fluctuating commodity prices.

Key Highlights

  • 1EOG Resources anticipates a non-cash net loss of $45.0 million from mark-to-market adjustments on financial commodity derivative contracts for Q4 2017.
  • 2Net cash received from settlements of financial commodity derivative contracts for Q4 2017 was $2.7 million.
  • 3EOG has entered into additional crude oil basis swap contracts to manage the Midland Differential and Gulf Coast Differential for 2018 and 2019.
  • 4The company has hedged 134,000 Bbld of crude oil for 2018 at an average price of $60.04 per barrel through price swap contracts.
  • 5For natural gas, EOG has swap contracts covering 35,000 MMBtud at an average price of $3.00/MMBtu for March 1, 2018, through November 30, 2018.
  • 6Natural gas option contracts sold (calls) in 2018 have a weighted average strike price of $3.38/MMBtu, while purchased put options have a weighted average strike price of $2.94/MMBtu.
  • 7Natural gas collar contracts for 2017 had a weighted average ceiling price of $3.69/MMBtu and a floor price of $3.20/MMBtu.

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