Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS (Tables)

v3.20.1
DERIVATIVE INSTRUMENTS (Tables)
 3 Months Ended
Mar. 31, 2020
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Schedule of open fixed price swap positions and natural gas basis swap positions s of March 31, 2020, the Company had the following natural gas basis swap positions open:
 
Gulfport Pays
Gulfport Receives
Daily Volume (MMBtu/day)
 
Weighted Average Fixed Spread
Remaining 2020
Transco Zone 4
NYMEX Plus Fixed Spread
60,000

 
$
(0.05
)
Remaining 2020
Fixed Spread
ONEOK Minus NYMEX
10,000

 
$
(0.54
)
Below is a summary of the Company’s open fixed price swap positions as of March 31, 2020. 
 
Location
Daily Volume (MMBtu/day)
 
Weighted
Average Price
Remaining 2020
NYMEX Henry Hub
432,000

 
$
2.92


 
Location
Daily Volume
(Bbls/day)
 
Weighted
Average Price
Remaining 2020
NYMEX WTI
6,000

 
$
59.83

 
Location
Daily Volume
(Bbls/day)
 
Weighted
Average Price
Remaining 2020
Mont Belvieu C3
500

 
$
21.63


The Company sold call options in exchange for a premium, and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps primarily for 2020 listed above. Each call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these 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.
 
Location
Daily Volume (MMBtu/day)
 
Weighted Average Price
2022
NYMEX Henry Hub
628,000

 
$
2.90

2023
NYMEX Henry Hub
628,000

 
$
2.90


Schedule of purchase and sale agreement for sale of the company's non-core assets See below for threshold and potential payment amounts.
Period
Threshold(1)
Payment to be received(2)
July 2020 - June 2021
Greater than or equal to $60.65
$
150,000

 
Between $52.62 - $60.65
Calculated Value(3)

 
Less than or equal to $52.62
$
—

(1)
Based on the "WTI NYMEX + Argus LLS Differential," as published by Argus Media.
(2)
Payment will be assessed monthly from July 2020 through June 2021. If threshold is met, payment shall be received within five business days after the end of each calendar month.
(3)
If average daily price, as defined in (1), is greater than $52.62 but less than $60.65, payment received will be $150,000 multiplied by a fraction, the numerator of which is the amount determined by subtracting $52.62 from such average daily price, and the denominator of which is $8.03.
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 March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
 
(In thousands)
Commodity derivative instruments
$
171,755

 
$
125,383

Contingent consideration arrangement
—

 
818

Total short-term derivative instruments - asset
$
171,755

 
$
126,201

 
 
 
 
Contingent consideration arrangement
—

 
563

Total long-term derivative instruments - asset
$
—

 
$
563

 
 
 
 
Total short-term derivative instruments - liability
$
67

 
$
303

 
 
 
 
Total long-term derivative instruments - liability
$
70,829

 
$
53,135

Total net asset derivative position
$
100,859

 
$
73,326


Schedule of net gain (loss) on derivatives he following table presents the gain and loss recognized in net gain (loss) on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three months ended March 31, 2020 and 2019.
 
Net gain (loss) on derivative instruments
 
Three months ended March 31,
 
2020
 
2019
 
(In thousands)
Natural gas derivatives
$
45,853

 
$
(16,431
)
Oil derivatives
52,874

 
(454
)
NGL derivatives
920

 
(3,160
)
Contingent consideration arrangement
(1,381
)
 
—

Total
$
98,266

 
$
(20,045
)

Schedule of 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.
 
As of March 31, 2020
 
Gross Assets (Liabilities)
 
Gross Amounts
 
 
 
Presented in the
 
Subject to Master
 
Net
 
Consolidated Balance Sheets
 
Netting Agreements
 
Amount
 
(In thousands)
Derivative assets
$
171,755

 
$
(70,896
)
 
$
100,859

Derivative liabilities
$
(70,896
)
 
$
70,896

 
$
—

 
As of December 31, 2019
 
Gross Assets (Liabilities)
 
Gross Amounts
 
 
 
Presented in the
 
Subject to Master
 
Net
 
Consolidated Balance Sheets
 
Netting Agreements
 
Amount
 
(In thousands)
Derivative assets
$
126,764

 
$
(53,438
)
 
$
73,326

Derivative liabilities
$
(53,438
)
 
$
53,438

 
$
—


Schedule of recognized derivative liabilities he 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.
 
As of March 31, 2020
 
Gross Assets (Liabilities)
 
Gross Amounts
 
 
 
Presented in the
 
Subject to Master
 
Net
 
Consolidated Balance Sheets
 
Netting Agreements
 
Amount
 
(In thousands)
Derivative assets
$
171,755

 
$
(70,896
)
 
$
100,859

Derivative liabilities
$
(70,896
)
 
$
70,896

 
$
—

 
As of December 31, 2019
 
Gross Assets (Liabilities)
 
Gross Amounts
 
 
 
Presented in the
 
Subject to Master
 
Net
 
Consolidated Balance Sheets
 
Netting Agreements
 
Amount
 
(In thousands)
Derivative assets
$
126,764

 
$
(53,438
)
 
$
73,326

Derivative liabilities
$
(53,438
)
 
$
53,438

 
$
—