Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS (Tables)

v3.20.2
DERIVATIVE INSTRUMENTS (Tables)
 6 Months Ended
Jun. 30, 2020
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Schedule of open fixed price swap positions and natural gas basis swap positions Below is a summary of the Company’s open fixed price swap positions as of June 30, 2020. 
Location Daily Volume
(MMBtu/day)		 Weighted
Average Price
Remaining 2020 NYMEX Henry Hub 357,000    $ 2.86   
Location Daily Volume
(Bbls/day)		 Weighted
Average Price
Remaining 2020 NYMEX WTI 3,000    $ 35.49   
Location Daily Volume
(Bbls/day)		 Weighted
Average Price
Remaining 2020 Mont Belvieu C3 1,500    $ 20.27   
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   
Location Daily Volume (MMBtu/day) Weighted Average Floor Price Weighted Average Ceiling Price
2021 NYMEX Henry Hub 250,000    $ 2.46    $ 2.81   
As of June 30, 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)  
During the three months ended June 30, 2020, we early terminated oil fixed price swaps which represented approximately 6,000 BBls of oil per day for the remainder of 2020. The early termination resulted in a cash settlement of $40.5 million.
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 June 30, 2020 and December 31, 2019:
June 30, 2020 December 31, 2019
(In thousands)
Commodity Contracts:
Short-term derivative asset $ 53,188    $ 125,383   
Long-term derivative asset 4,298    —   
Short-term derivative liability (8,540)   (303)  
Long-term derivative liability (45,615)   (53,135)  
Total commodity derivative position $ 3,331    $ 71,945   
Contingent consideration arrangement:
Short-term derivative asset $ —    $ 818   
Long-term derivative asset —    563   
Total contingent consideration derivative position $ —    $ 1,381   
Total net asset derivative position $ 3,331    $ 73,326   
Schedule of net gain (loss) on derivatives The following table presents the gain and loss recognized in net gain on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three and six months ended June 30, 2020 and 2019.
Net gain (loss) on derivative instruments
Three months ended June 30, Six months ended June 30,
2020 2019 2020 2019
(In thousands)
Natural gas derivatives $ 35,689    $ 152,475    $ 81,542    $ 136,044   
Oil derivatives (7,937)   11,871    44,937    11,417   
NGL derivatives (781)   6,794    139    3,634   
Contingent consideration arrangement —    —    (1,381)   —   
Total $ 26,971    $ 171,140    $ 125,237    $ 151,095   
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 June 30, 2020
Gross Assets (Liabilities) Gross Amounts
Presented in the Subject to Master Net
Consolidated Balance Sheets Netting Agreements Amount
(In thousands)
Derivative assets $ 57,486    $ (48,761)   $ 8,725   
Derivative liabilities $ (54,155)   $ 48,761    $ (5,394)  
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 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 June 30, 2020
Gross Assets (Liabilities) Gross Amounts
Presented in the Subject to Master Net
Consolidated Balance Sheets Netting Agreements Amount
(In thousands)
Derivative assets $ 57,486    $ (48,761)   $ 8,725   
Derivative liabilities $ (54,155)   $ 48,761    $ (5,394)  
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    $ —