XML 39 R9.htm IDEA: XBRL DOCUMENT
v3.3.0.814

Derivative Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 2015
Derivative Financial Instruments [Abstract] |
Derivative Financial Instruments | 3. Derivative Financial Instruments Objectives and Strategies Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production to hedge future prices received. Additionally, Devon and EnLink periodically enter into derivative financial instruments with respect to a portion of their oil, gas and NGL marketing activities. These commodity derivative financial instruments include financial price swaps, basis swaps, costless price collars and call options. Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility and foreign exchange forward contracts to manage its exposure to fluctuations in the U.S. and Canadian dollar exchange rates. Devon does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment. Counterparty Credit Risk By using derivative financial instruments, Devon is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instruments are placed with a number of counterparties whom Devon believes are acceptable credit risks. It is Devon’s policy to enter into derivative contracts only with investment-grade rated counterparties deemed by management to be competent and competitive market makers. Additionally, Devon’s derivative contracts contain provisions that provide for collateral payments, depending on levels of exposure and the credit rating of the counterparty. As of September 30, 2015 and December 31, 2014, Devon held $169 million and $524 million, respectively, of cash collateral which represented the estimated fair value of certain derivative positions in excess of Devon’s credit guidelines. The collateral is reported in other current liabilities in the accompanying consolidated balance sheets. Commodity Derivatives As of September 30, 2015, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX West Texas Intermediate (“WTI”) futures price. The second table presents Devon’s oil derivatives that settle against the respective indices noted within the table.
|  | Price Swaps |  | Price Collars |  | Call Options Sold
Period |  | Volume (Bbls/d) |  | Weighted Average Price ($/Bbl) |  | Volume (Bbls/d) |  | Weighted Average Floor Price ($/Bbl) |  | Weighted Average Ceiling Price ($/Bbl) |  | Volume (Bbls/d) |  | Weighted Average Price ($/Bbl)
Q4 2015 |  | 107,000 |  | $ | 90.61 |  | 44,000 |  | $ | 81.36 |  | $ | 88.63 |  | 28,000 |  | $ | 116.43
Q1-Q4 2016 |  | - |  | $ | - |  | - |  | $ | - |  | $ | - |  | 18,500 |  | $ | 89.05
|  | Oil Basis Swaps
Period |  | Index |  | Volume (Bbls/d) |  | Weighted Average Differential to WTI ($/Bbl)
Q4 2015 |  | Western Canadian Select |  | 40,000 |  | $ | (15.58)
Q4 2015 |  | West Texas Sour |  | 8,000 |  | $ | (3.68)
Q4 2015 |  | Midland Sweet |  | 16,000 |  | $ | (2.86)
Q1-Q4 2016 |  | West Texas Sour |  | 5,000 |  | $ | (0.53)
Q1-Q4 2016 |  | Midland Sweet |  | 13,000 |  | $ | 0.25
As of September 30, 2015, 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 respective indices noted within the table.
|  | 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)
Q4 2015 |  | 250,000 |  | $ | 4.32 |  | 480,000 |  | $ | 3.52 |  | $ | 3.83 |  | 550,000 |  | $ | 5.09
Q1-Q4 2016 |  | 24,863 |  | $ | 3.17 |  | - |  | $ | - |  | $ | - |  | 400,000 |  | $ | 4.73
|  | Natural Gas Basis Swaps
Period |  | Index |  | Volume (MMBtu/d) |  | Weighted Average Differential to Henry Hub ($/MMBtu)
Q4 2015 |  | Panhandle Eastern Pipe Line |  | 100,000 |  | $ | (0.28)
Q4 2015 |  | El Paso Natural Gas |  | 70,000 |  | $ | (0.11)
Q4 2015 |  | Houston Ship Channel |  | 200,000 |  | $ | 0.01
Q1-Q4 2016 |  | Panhandle Eastern Pipe Line |  | 175,000 |  | $ | (0.34)
Q1-Q4 2016 |  | El Paso Natural Gas |  | 15,000 |  | $ | (0.13)
Q1-Q4 2016 |  | Houston Ship Channel |  | 30,000 |  | $ | 0.11
Q1-Q4 2016 |  | Transco Zone 4 |  | 60,000 |  | $ | 0.01
Q1-Q4 2017 |  | Panhandle Eastern Pipe Line |  | 60,000 |  | $ | (0.34)
Q1-Q4 2017 |  | El Paso Natural Gas |  | 30,000 |  | $ | (0.14)
Q1-Q4 2017 |  | Houston Ship Channel |  | 35,000 |  | $ | 0.06
Q1-Q4 2017 |  | Transco Zone 4 |  | 85,000 |  | $ | 0.04
As of September 30, 2015, EnLink had the following open derivative positions associated with gas processing and fractionation. EnLink’s NGL derivative positions settle by purity product against the average of the prompt month OPIS Mont Belvieu, Texas index. EnLink’s natural gas derivative positions settle against the Henry Hub Gas Daily index.
Period |  | Product |  | Volume (Total) |  |  | Weighted Average Price Paid |  |  | Weighted Average Price Received
Q4 2015-Q4 2016 |  | Ethane |  | 817 | MBbls |  | $ | 0.28/gal |  |  | Index
Q4 2015-Q4 2016 |  | Propane |  | 908 | MBbls |  |  | Index |  | $ | 0.88/gal
Q4 2015-Q3 2016 |  | Normal Butane |  | 74 | MBbls |  |  | Index |  | $ | 0.63/gal
Q4 2015-Q3 2016 |  | Natural Gasoline |  | 63 | MBbls |  |  | Index |  | $ | 1.30/gal
Q4 2015-Q3 2016 |  | Natural Gas |  | 2,497 | MMBtu/d |  | $ | 3.13/MMBtu |  |  | Index
Interest Rate Derivatives As of September 30, 2015, Devon had the following open interest rate derivative positions:
Notional |  | Rate Received |  | Rate Paid |  | Expiration
(Millions) |  |  |  |  |  |
$ | 100 |  | Three Month LIBOR |  | 0.92% |  | December 2016
$ | 100 |  | 1.76% |  | Three Month LIBOR |  | January 2019
$ | 750 |  | Three Month LIBOR |  | 2.98% |  | December 2048
Foreign Currency Derivatives As of September 30, 2015, Devon had the following open foreign currency derivative position:
Forward Contract
Currency |  | Contract Type |  | CAD Notional |  | Weighted Average Fixed Rate Received |  | Expiration
|  |  |  | (Millions) |  | (CAD-USD) |  |
Canadian Dollar |  | Sell |  | $ | 1,884 |  | 0.752 |  | December 2015
Financial Statement Presentation The following table presents the net gains and losses by derivative financial instrument type followed by the corresponding individual comprehensive statements of earnings caption.
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Commodity derivatives: |  | (Millions)
Oil, gas and NGL derivatives |  | $ | 414 |  | $ | 748 |  | $ | 426 |  | $ | 29
Marketing and midstream revenues |  |  | 6 |  |  | 1 |  |  | 8 |  |  | (2)
Interest rate derivatives: |  |  |  |  |  |  |  |  |  |  |  |
Other nonoperating items |  |  | (30) |  |  | — |  |  | (28) |  |  | 1
Foreign currency derivatives: |  |  |  |  |  |  |  |  |  |  |  |
Other nonoperating items |  |  | 91 |  |  | 55 |  |  | 200 |  |  | 15
Net gains recognized |  | $ | 481 |  | $ | 804 |  | $ | 606 |  | $ | 43
The following table presents the derivative fair values by derivative financial instrument type followed by the corresponding individual consolidated balance sheet caption.
|  |  | September 30, 2015 |  | December 31, 2014
|  |  | (Millions)
Commodity derivative assets: |  |  |  |  |  |  |
Derivatives, at fair value |  |  | $ | 687 |  | $ | 1,984
Other long-term assets |  |  |  | 4 |  |  | 11
Interest rate derivative assets: |  |  |  |  |  |  |
Derivatives, at fair value |  |  |  | 1 |  |  | 1
Other long-term assets |  |  |  | 1 |  |  | —
Foreign currency derivative assets: |  |  |  |  |  |  |
Derivatives, at fair value |  |  |  | 2 |  |  | 8
Total derivative assets |  |  | $ | 695 |  | $ | 2,004
Commodity derivative liabilities: |  |  |  |  |  |  |
Other current liabilities |  |  | $ | 19 |  | $ | 28
Other long-term liabilities |  |  |  | 5 |  |  | 28
Interest rate derivative liabilities: |  |  |  |  |  |  |
Other current liabilities |  |  |  | 1 |  |  | 1
Other long-term liabilities |  |  |  | 30 |  |  | —
Total derivative liabilities |  |  | $ | 55 |  | $ | 57

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: 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 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41620-113959 Reference 4: 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=56946850&loc=SL5624163-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579240-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624177-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41641-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579245-113959 Reference 10: 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=56946850&loc=SL5624258-113959 Reference 11: 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=35736893&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5708775-113959 Reference 13: 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=56946850&loc=SL5708773-113959 Reference 14: 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=56946850&loc=SL5618551-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5580258-113959 Reference 16: 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=56946850&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 18: 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=56946850&loc=d3e41638-113959 Reference 19: 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=26873400&loc=d3e23780-122690 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration