DERIVATIVE INSTRUMENTS (Tables)
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9 Months Ended |
Sep. 30, 2018 |
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| General Discussion of Derivative Instruments and Hedging Activities [Abstract] |
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| Schedule of open fixed price swap positions and natural gas basis swap positions |
As of September 30, 2018, the Company had the following natural gas basis swap positions for Transco Zone 4.
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Location |
Daily Volume (MMBtu/day) |
|
Weighted Average Price |
Remaining 2018 |
Transco Zone 4 |
40,000 |
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|
$ |
(0.05 |
) |
2019 |
Transco Zone 4 |
60,000 |
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|
$ |
(0.05 |
) |
2020 |
Transco Zone 4 |
60,000 |
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|
$ |
(0.05 |
) |
Below is a summary of the Company’s open fixed price swap positions as of September 30, 2018.
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Location |
Daily Volume (MMBtu/day) |
|
Weighted
Average Price |
Remaining 2018 |
NYMEX Henry Hub |
1,010,000 |
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|
$ |
3.01 |
|
2019 |
NYMEX Henry Hub |
1,154,000 |
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|
$ |
2.81 |
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2020 |
NYMEX Henry Hub |
204,000 |
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|
$ |
2.77 |
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Location |
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
Remaining 2018 |
ARGUS LLS |
2,000 |
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|
$ |
56.22 |
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2019 |
ARGUS LLS |
1,000 |
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|
$ |
59.55 |
|
Remaining 2018 |
NYMEX WTI |
4,500 |
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|
$ |
53.72 |
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2019 |
NYMEX WTI |
4,000 |
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|
$ |
58.28 |
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Location |
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
2019 |
Mont Belvieu C2 |
1,000 |
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|
$ |
18.48 |
|
Remaining 2018 |
Mont Belvieu C3 |
4,000 |
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|
$ |
29.34 |
|
2019 |
Mont Belvieu C3 |
4,000 |
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|
$ |
28.87 |
|
Remaining 2018 |
Mont Belvieu C5 |
500 |
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|
$ |
46.62 |
|
2019 |
Mont Belvieu C5 |
500 |
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|
$ |
54.08 |
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The Company sold call options and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.
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Location |
Daily Volume (MMBtu/day) |
|
Weighted Average Price |
October 2018 - March 2019 |
NYMEX Henry Hub |
50,000 |
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|
$ |
3.13 |
|
April 2019 - December 2019 |
NYMEX Henry Hub |
30,000 |
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|
$ |
3.10 |
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| Schedule of derivative instruments in balance sheet |
The following table presents the fair value of the Company’s derivative instruments on a gross basis at September 30, 2018 and December 31, 2017:
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September 30, 2018 |
|
December 31, 2017 |
|
(In thousands) |
Short-term derivative instruments - asset |
$ |
19,809 |
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|
$ |
78,847 |
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Long-term derivative instruments - asset |
$ |
3,530 |
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|
$ |
8,685 |
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Short-term derivative instruments - liability |
$ |
62,601 |
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|
$ |
32,534 |
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Long-term derivative instruments - liability |
$ |
15,101 |
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|
$ |
2,989 |
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| Schedule of net gain (loss) on derivatives |
The following table presents the gain and loss recognized in net (loss) gain on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017.
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Net (loss) gain on derivative instruments |
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Three months ended September 30, |
|
Nine months ended September 30, |
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2018 |
|
2017 |
|
2018 |
|
2017 |
|
(In thousands) |
Natural gas derivatives |
$ |
14,101 |
|
|
$ |
(7,077 |
) |
|
$ |
(26,789 |
) |
|
$ |
135,868 |
|
Oil derivatives |
(11,610 |
) |
|
(6,571 |
) |
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(45,176 |
) |
|
12,477 |
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Natural gas liquids derivatives |
(12,154 |
) |
|
(9,212 |
) |
|
(24,772 |
) |
|
(6,757 |
) |
Total |
$ |
(9,663 |
) |
|
$ |
(22,860 |
) |
|
$ |
(96,737 |
) |
|
$ |
141,588 |
|
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| Recognized derivative assets |
The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.
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As of September 30, 2018 |
|
Gross Assets (Liabilities) |
|
Gross Amounts |
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Presented in the |
|
Subject to Master |
|
Net |
|
Consolidated Balance Sheets |
|
Netting Agreements |
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Amount |
|
(In thousands) |
Derivative assets |
$ |
23,339 |
|
|
$ |
(17,053 |
) |
|
$ |
6,286 |
|
Derivative liabilities |
$ |
(77,702 |
) |
|
$ |
17,053 |
|
|
$ |
(60,649 |
) |
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As of December 31, 2017 |
|
Gross Assets (Liabilities) |
|
Gross Amounts |
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|
|
Presented in the |
|
Subject to Master |
|
Net |
|
Consolidated Balance Sheets |
|
Netting Agreements |
|
Amount |
|
(In thousands) |
Derivative assets |
$ |
87,532 |
|
|
$ |
(22,199 |
) |
|
$ |
65,333 |
|
Derivative liabilities |
$ |
(35,523 |
) |
|
$ |
22,199 |
|
|
$ |
(13,324 |
) |
|
| Recognized derivative liabilities |
The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.
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As of September 30, 2018 |
|
Gross Assets (Liabilities) |
|
Gross Amounts |
|
|
|
Presented in the |
|
Subject to Master |
|
Net |
|
Consolidated Balance Sheets |
|
Netting Agreements |
|
Amount |
|
(In thousands) |
Derivative assets |
$ |
23,339 |
|
|
$ |
(17,053 |
) |
|
$ |
6,286 |
|
Derivative liabilities |
$ |
(77,702 |
) |
|
$ |
17,053 |
|
|
$ |
(60,649 |
) |
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As of December 31, 2017 |
|
Gross Assets (Liabilities) |
|
Gross Amounts |
|
|
|
Presented in the |
|
Subject to Master |
|
Net |
|
Consolidated Balance Sheets |
|
Netting Agreements |
|
Amount |
|
(In thousands) |
Derivative assets |
$ |
87,532 |
|
|
$ |
(22,199 |
) |
|
$ |
65,333 |
|
Derivative liabilities |
$ |
(35,523 |
) |
|
$ |
22,199 |
|
|
$ |
(13,324 |
) |
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