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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2014
Derivative Financial Instruments [Abstract]  
Derivative Financial Instruments

3.Derivative Financial Instruments

 

Commodity Derivatives

 

As of December 31, 2014, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX West Texas Intermediate futures price. The second table presents Devon’s oil derivatives that settle against the Western Canadian Select, West Texas Sour and Midland Sweet indices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

 

Price Collars

 

Call Options Sold

Period

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

 

Volume (Bbls/d)

 

Weighted Average Floor Price ($/Bbl)

 

Weighted Average Ceiling Price ($/Bbl)

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

Q1-Q4 2015

 

107,203

 

$

91.07

 

31,500

 

$

89.67

 

$

97.84

 

28,000

 

$

116.43

Q1-Q4 2016

 

-

 

$

-

 

-

 

$

-

 

$

-

 

18,500

 

$

103.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil Basis Swaps

Period

 

Index

 

Volume (Bbls/d)

 

Weighted Average Differential to WTI ($/Bbl)

Q1-Q4 2015 

 

Western Canadian Select

 

22,514

 

$
(18.35)

Q1-Q4 2015 

 

West Texas Sour

 

8,000

 

$
(3.68)

Q1-Q4 2015 

 

Midland Sweet

 

14,247

 

$
(2.92)

 

As of December 31, 2014, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index. The second table presents Devon’s natural gas derivatives that settle against the Panhandle Eastern Pipe Line, El Paso Natural Gas and Houston Ship Channel indices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

 

Price Collars

 

Call Options Sold

Period

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

 

Volume (MMBtu/d)

 

Weighted Average Floor Price ($/MMBtu)

 

Weighted Average Ceiling Price ($/MMBtu)

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

Q1-Q4 2015

 

250,000

 

$

4.32

 

328,452

 

$

4.05

 

$

4.36

 

550,000

 

$

5.09

Q1-Q4 2016

 

-

 

$

-

 

-

 

$

-

 

$

-

 

400,000

 

$

5.00

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Basis Swaps

Period

 

Index

 

Volume (MMBtu/d)

 

Weighted Average Differential to Henry Hub ($/MMBtu)

Q1-Q4 2015

 

Panhandle Eastern Pipe Line

 

100,000

 

$

(0.28)

Q1-Q4 2015

 

El Paso Natural Gas

 

70,000

 

$

(0.11)

Q1-Q4 2015

 

Houston Ship Channel

 

200,000

 

$

0.01

Q1-Q4 2016

 

Panhandle Eastern Pipe Line

 

30,000

 

$

(0.33)

Q1-Q4 2016

 

El Paso Natural Gas

 

15,000

 

$

(0.13)

Q1-Q4 2016

 

Houston Ship Channel

 

30,000

 

$

0.11

 

 

 

 

 

    As of December 31, 2014, the following were open derivative positions associated with gas processing and fractionation at EnLink. EnLink’s NGL positions settle by purity product against the average of the prompt month OPIS Mont Belvieu, Texas index.  EnLink’s natural gas positions settle against the Henry Hub Gas Daily index as defined by the pricing dates in the derivative contracts.

 

 

 

 

 

 

 

 

 

 

 

 

Period

 

Product

 

Volume

 

 

Weighted Average Price Paid

 

 

Weighted Average Price Received

Q1 2015-Q4 2016

 

Ethane

 

1,168

MBbls

 

 

Index

 

$

0.29/gal

Q1 2015-Q4 2016

 

Propane

 

1,171

MBbls

 

 

Index

 

$

1.01/gal

Q1-Q4 2015

 

Normal Butane

 

53

MBbls

 

 

Index

 

$

1.14/gal

Q1-Q4 2015

 

Natural Gasoline

 

44

MBbls

 

 

Index

 

$

1.81/gal

Q1-Q4 2015

 

Natural Gas

 

1,225

MMBtu/d

 

$

4.08/MMBtu

 

 

Index

 

Interest Rate Derivatives

 

    As of December 31, 2014, Devon had the following open interest rate derivative positions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notional

 

Rate Received

 

Rate Paid

 

Expiration

(In millions)

 

 

 

 

 

 

$

100

 

Three Month LIBOR

 

0.92%

 

December 2016

$

100

 

1.76%

 

Three Month LIBOR

 

January 2019

 

Foreign Currency Derivatives

 

As of December 31, 2014, Devon had the following open foreign currency derivative position:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Contract

Currency

 

Contract Type

 

CAD Notional

 

Weighted Average Fixed Rate Received

 

Expiration

 

 

 

 

(In millions)

 

(CAD-USD)

 

 

Canadian Dollar

 

Sell

 

$
1,884 

 

0.864

 

March 2015

 

Financial Statement Presentation

 

The following table presents the net gains and losses recognized in the accompanying consolidated comprehensive statements of earnings associated with derivative financial instruments. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Statements of

 

Year Ended
December 31,

 

 

Earnings Caption

 

2014

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Oil, gas and NGL commodity derivatives

 

Oil, gas and NGL derivatives

 

$
1,989 

 

$
(191)

 

$
693 

Midstream commodity derivatives

 

Marketing and midstream revenues

 

 
22 

 

 

 -

 

 

 -

Interest rate derivatives

 

Other nonoperating items

 

 
(1)

 

 

 -

 

 
(15)

Foreign currency derivatives

 

Other nonoperating items

 

 
60 

 

 
56 

 

 
(18)

Net gains (losses) recognized in comprehensive statements of earnings

 

$
2,070 

 

$
(135)

 

$
660 

 

The following table presents the derivative fair values included in the accompanying consolidated balance sheets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

Balance Sheet Caption

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Asset derivatives:

 

 

 

 

 

 

 

 

Oil, gas and NGL commodity derivatives

 

Derivatives, at fair value

 

$
1,967 

 

$
75 

Oil, gas and NGL commodity derivatives

 

Other long-term assets

 

 
1 

 

 
28 

Midstream commodity derivatives

 

Derivatives, at fair value

 

 
17 

 

 

 -

Midstream commodity derivatives

 

Other long-term assets

 

 
10 

 

 

 -

Interest rate derivatives

 

Derivatives, at fair value

 

 
1 

 

 

 -

Foreign currency derivatives

 

Derivatives, at fair value

 

 
8 

 

 

 -

Total asset derivatives

 

 

 

$
2,004 

 

$
103 

Liability derivatives:

 

 

 

 

 

 

 

 

Oil, gas and NGL commodity derivatives

 

Other current liabilities

 

$
25 

 

$
58 

Oil, gas and NGL commodity derivatives

 

Other long-term liabilities

 

 
26 

 

 
62 

Midstream commodity derivatives

 

Other current liabilities

 

 
3 

 

 

 -

Midstream commodity derivatives

 

Other long-term liabilities

 

 
2 

 

 

 -

Interest rate derivatives

 

Other current liabilities

 

 
1 

 

 

 -

Foreign currency derivatives

 

Other current liabilities

 

 

 -

 

 
1 

Total liability derivatives

 

 

 

$
57 

 

$
121