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Risk Management Activities | 6 Months Ended
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Jun. 30, 2013
Risk Management Activities [Abstract] |
Risk Management Activities [Text Block] | 12. Risk Management Activities Commodity Price Risk. As more fully discussed in Note 11 to the Consolidated Financial Statements included in EOG's 2012 Annual Report, EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in commodity prices for crude oil and natural gas. EOG utilizes financial commodity derivative instruments, primarily price swap, option, swaption, collar and basis swap contracts, as a means to manage this price risk. EOG has not designated any of its financial commodity derivative contracts as hedges and, accordingly, accounts for financial commodity derivative contracts using the mark-to-market accounting method. In addition to financial transactions, from time to time EOG is a party to various physical commodity contracts for the sale of hydrocarbons that cover varying periods of time and have varying pricing provisions. These physical commodity contracts qualify for the normal purchases and normal sales exception and, therefore, are not subject to hedge accounting or mark-to-market accounting. The financial impact of physical commodity contracts is included in revenues at the time of settlement, which in turn affects average realized hydrocarbon prices. EOG RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited) Commodity Derivative Contracts. Presented below is a comprehensive summary of EOG's crude oil derivative contracts at June 30, 2013, with notional volumes expressed in barrels per day (Bbld) and prices expressed in dollars per barrel ($/Bbl).
Crude Oil Derivative Contracts |
|  |  |  |  | Weighted |
|  | Volume |  |  | Average Price |
|  | (Bbld) |  |  | ($/Bbl) |
2013 (1) |  |  |  |  |  |
January 2013 (closed) |  |  | 101,000 |  |  | $ | 99.29 |
February 1, 2013 through April 30, 2013 (closed) |  |  | 109,000 |  |  |  | 99.17 |
May 1, 2013 through June 30, 2013 (closed) |  |  | 101,000 |  |  |  | 99.29 |
July 1, 2013 through September 30, 2013 |  |  | 111,000 |  |  |  | 98.25 |
October 1, 2013 through December 31, 2013 |  |  | 103,000 |  |  |  | 98.26 |
2014 (2) |  |  |  |  |  |  |  |
January 1, 2014 through March 31, 2014 |  |  | 85,000 |  |  | $ | 96.24 |
April 1, 2014 through June 30, 2014 |  |  | 75,000 |  |  | $ | 96.20 |
(1) | EOG has entered into crude oil derivative contracts which give counterparties the option to extend certain current derivative contracts for additional three-month and six-month periods. Options covering a notional volume of 8,000 Bbld are exercisable on September 30, 2013. If the counterparties exercise all such options, the notional volume of EOG's existing crude oil derivative contracts will increase by 8,000 Bbld at an average price of $98.11 per barrel for each month during the period October 1, 2013 through December 31, 2013. Options covering a notional volume of 54,000 Bbld are exercisable on December 31, 2013. If the counterparties exercise all such options, the notional volume of EOG's existing crude oil derivative contracts will increase by 54,000 Bbld at an average price of $98.91 per barrel for each month during the period January 1, 2014 through June 30, 2014.
(2) | EOG has entered into crude oil derivative contracts which give counterparties the option to extend certain current derivative contracts for additional six-month and nine-month periods. Options covering a notional volume of 10,000 Bbld are exercisable on or about March 31, 2014. If the counterparties exercise all such options, the notional volume of EOG's existing crude oil derivative contracts will increase by 10,000 Bbld at an average price of $96.60 per barrel for each month during the period April 1, 2014 through December 31, 2014. Options covering a notional volume of 75,000 Bbld are exercisable on or about June 30, 2014. If the counterparties exercise all such options, the notional volume of EOG's existing crude oil derivative contracts will increase by 75,000 Bbld at an average price of $96.20 per barrel for each month during the period July 1, 2014 through December 31, 2014.
EOG RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited) Presented below is a comprehensive summary of EOG's natural gas derivative contracts at June 30, 2013, with notional volumes expressed in million British thermal units (MMBtu) per day (MMBtud) and prices expressed in dollars per MMBtu ($/MMBtu).
Natural Gas Derivative Contracts |
|  | Volume (MMBtud) |  |  | Weighted Average Price ($/MMBtu) |
2013 (1) |  |  |  |  |  |
January 1, 2013 through April 30, 2013 (closed) |  |  | 150,000 |  |  | $ | 4.79 |
May 1, 2013 through July 31, 2013 (closed) |  |  | 200,000 |  |  |  | 4.72 |
August 1, 2013 through October 31, 2013 |  |  | 200,000 |  |  |  | 4.72 |
November 1, 2013 through December 31, 2013 |  |  | 150,000 |  |  |  | 4.79 |
2014 (2) |  |  |  |  |  |  |  |
January 1, 2014 through December 31, 2014 |  |  | 170,000 |  |  | $ | 4.54 |
| (1) | EOG has entered into natural gas derivative contracts which give counterparties the option of entering into derivative contracts at future dates. Such options are exercisable monthly up until the settlement date of each monthly contract. For the period August 1, 2013 through October 31, 2013, if the counterparties exercise all such options, the notional volume of EOG's existing natural gas derivative contracts will increase by 200,000 MMBtud at an average price of $4.72 per MMBtu for each month during that period. For the period November 1, 2013 through December 31, 2013, if the counterparties exercise all such options, the notional volume of EOG's existing natural gas derivative contracts will increase by 150,000 MMBtud at an average price of $4.79 per MMBtu for each month during that period.
| (2) | EOG has entered into natural gas derivative contracts which give counterparties the option of entering into derivative contracts at future dates. Additionally, in connection with certain natural gas derivative contracts settled in July 2012, counterparties retain an option of entering into derivative contracts at future dates. All such options are exercisable monthly up until the settlement date of each monthly contract. If the counterparties exercise all such options, the notional volume of EOG's existing natural gas derivative contracts will increase by 320,000 MMBtud at an average price of $4.66 per MMBtu for each month during the period January 1, 2014 through December 31, 2014.
Foreign Currency Exchange Rate Derivative. EOG is party to a foreign currency aggregate swap with multiple banks to eliminate any exchange rate impacts that may result from the 4.75% Subsidiary Debt issued by one of EOG's Canadian subsidiaries. The foreign currency swap agreement expires on March 15, 2014. EOG accounts for the foreign currency swap transaction using the hedge accounting method. Changes in the fair value of the foreign currency swap do not impact Net Income. The after-tax net impact from the foreign currency swap resulted in a reduction in Other Comprehensive Income (OCI) of $0.7 million and $0.9 million for the three months ended June 30, 2013 and 2012, respectively, and increases in OCI of $1.0 million and $0.7 million for the six months ended June 30, 2013 and 2012, respectively. Interest Rate Derivative. EOG is a party to an interest rate swap with a counterparty bank. The interest rate swap was entered into in order to mitigate EOG's exposure to volatility in interest rates related to the Floating Rate Notes. The interest rate swap has a notional amount of $350 million and expires on February 3, 2014. EOG accounts for the interest rate swap transaction using the hedge accounting method. Changes in the fair value of the interest rate swap do not impact Net Income. The after-tax net impact from the interest rate swap resulted in an increase in OCI of $0.4 million and $0.1 million for the three months ended June 30, 2013 and 2012, respectively, and an increase of $0.8 million and a reduction of $0.2 million for the six months ended June 30, 2013 and 2012, respectively. EOG RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited) The following table sets forth the amounts, on a gross basis, and classification of EOG's outstanding derivative financial instruments at June 30, 2013 and December 31, 2012. Certain amounts may be presented on a net basis on the consolidated financial statements when such amounts are with the same counterparty and subject to a master netting arrangement (in millions):
|  |  | Fair Value at |
|  |  | June 30, |  |  | December 31, |
Description | Location on Balance Sheet |  | 2013 |  |  | 2012 |
Asset Derivatives |  |  |  |  |  |  |
Crude oil and natural gas derivative contracts - |  |  |  |  |  |  |
Current portion | Assets from Price Risk Management Activities (1) |  | $ | 106 |  |  | $ | 166 |
Noncurrent portion | Other Assets (2) |  | $ | 7 |  |  | $ | - |
Liability Derivatives |  |  |  |  |  |  |  |  |
Crude oil and natural gas derivative contracts - |  |  |  |  |  |  |  |  |
Current portion | Liabilities from Price Risk Management Activities (3) |  | $ | 5 |  |  | $ | 8 |
Noncurrent portion | Other Liabilities (4) |  | $ | 1 |  |  | $ | 13 |
Foreign currency swap - |  |  |  |  |  |  |  |  |
Current portion | Current Liabilities - Other |  | $ | 43 |  |  | $ | - |
Noncurrent portion | Other Liabilities |  | $ | - |  |  | $ | 55 |
Interest rate swap - |  |  |  |  |  |  |  |  |
Current portion | Current Liabilities - Other |  | $ | 2 |  |  | $ | - |
Noncurrent portion | Other Liabilities |  | $ | - |  |  | $ | 4 |
| (1) | The current portion of Assets from Price Risk Management Activities consists of gross assets of $163 million, partially offset by gross liabilities of $57 million at June 30, 2013 and gross assets of $271 million, partially offset by gross liabilities of $105 million at December 31, 2012.
| (2) | The noncurrent portion of Assets from Price Risk Management Activities consists of gross assets of $10 million, partially offset by gross liabilities of $3 million at June 30, 2013.
| (3) | The current portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $62 million, partially offset by gross assets of $57 million at June 30, 2013 and gross liabilities of $113 million, partially offset by gross assets of $105 million at December 31, 2012.
| (4) | The noncurrent portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $4 million, partially offset by gross assets of $3 million at June 30, 2013 and gross liabilities of $13 million at December 31, 2012.
Credit Risk. Notional contract amounts are used to express the magnitude of commodity price, foreign currency and interest rate swap agreements. The amounts potentially subject to credit risk, in the event of nonperformance by the counterparties, are equal to the fair value of such contracts (see Note 11). EOG evaluates its exposure to significant counterparties on an ongoing basis, including those arising from physical and financial transactions. In some instances, EOG requires collateral, parent guarantees or letters of credit to minimize credit risk. EOG RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Concluded) (Unaudited) All of EOG's outstanding derivative instruments are covered by International Swap Dealers Association Master Agreements (ISDAs) with counterparties. The ISDAs may contain provisions that require EOG, if it is the party in a net liability position, to post collateral when the amount of the net liability exceeds the threshold level specified for EOG's then-current credit ratings. In addition, the ISDAs may also provide that as a result of certain circumstances, including certain events that cause EOG's credit rating to become materially weaker than its then-current ratings, the counterparty may require all outstanding derivatives under the ISDAs to be settled immediately. See Note 11 for the aggregate fair value of all derivative instruments that are in a net liability position at June 30, 2013 and December 31, 2012. EOG held collateral of $5 million at June 30, 2013 and $6 million at December 31, 2012. EOG had no collateral posted at both June 30, 2013 and December 31, 2012.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80748-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708773-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624258-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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