Summary
EOG Resources Inc. (EOG) filed an 8-K on April 15, 2021, providing an update on its price sensitivity and derivative positions as of April 15, 2021. The filing highlights the company's sensitivity to commodity price fluctuations, with each $1 per barrel change in crude oil and condensate prices (combined with NGL price changes) impacting net income by approximately $102 million and pretax cash flows by $130 million for full-year 2021. Similarly, a $0.10 per thousand cubic feet change in natural gas prices is estimated to affect net income by $31 million and pretax cash flows by $40 million. The company also disclosed its hedging activities and the financial impact of its derivative contracts. For the first quarter of 2021, EOG anticipates a net loss of $367 million from mark-to-market adjustments on its financial commodity derivative contracts, with $30 million paid in net cash for settlements during the quarter. No new commodity derivative contracts have been entered into since February 25, 2021, according to the filing.
Key Highlights
- 1EOG Resources estimates that a $1/bbl increase in combined crude oil/condensate and NGL prices would positively impact full-year 2021 net income by $102 million and pretax cash flows by $130 million.
- 2A $0.10/MMBtu increase in natural gas prices is estimated to positively impact full-year 2021 net income by $31 million and pretax cash flows by $40 million.
- 3EOG anticipates a net loss of $367 million for Q1 2021 related to the mark-to-market accounting of its financial commodity derivative contracts.
- 4The company paid $30 million in net cash for settlements of financial commodity derivative contracts during Q1 2021.
- 5No new commodity derivative contracts have been entered into by EOG since its Annual Report on Form 10-K filed on February 25, 2021.
- 6The filing details various crude oil, NGL, and natural gas derivative contracts, including swap contracts for different settlement periods in 2021 and 2022, with specific weighted average prices and volumes.