XML 32 R9.htm IDEA: XBRL DOCUMENT
v3.19.2

Derivative Financial Instruments | 6 Months Ended
--- | ---
Jun. 30, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | 3.Derivative Financial Instruments Objectives and Strategies Devon enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production to hedge future prices received. Additionally, Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL marketing activities. These commodity derivative financial instruments include financial price swaps, basis swaps and costless price collars. Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. As of June 30, 2019, Devon did not have any open interest rate swap contracts. 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 generally contain provisions that provide for collateral payments if Devon’s or its counterparty’s credit rating falls below certain credit rating levels. Commodity Derivatives As of June 30, 2019, Devon had the following open oil derivative positions. The first two tables present Devon’s oil derivatives that settle against the average of the prompt month NYMEX WTI futures price. The third table presents Devon’s oil derivatives that settle against the respective indices noted within the table.
|  | Price Swaps |  |  | Price Collars |
Period |  | Volume (Bbls/d) |  |  | Weighted Average Price ($/Bbl) |  |  | Volume (Bbls/d) |  |  | Weighted Average Floor Price ($/Bbl) |  |  | Weighted Average Ceiling Price ($/Bbl) |
Q3-Q4 2019 |  |  | 41,100 |  |  | $ | 60.76 |  |  |  | 79,750 |  |  | $ | 54.89 |  |  | $ | 64.92 |
Q1-Q4 2020 |  |  | 3,238 |  |  | $ | 60.13 |  |  |  | 22,432 |  |  | $ | 52.92 |  |  | $ | 63.03 |
|  | Three-Way Price Collars |
Period |  | Volume (Bbls/d) |  |  | Weighted Average Floor Sold Price ($/Bbl) |  |  | Weighted Average Floor Purchased Price ($/Bbl) |  |  | Weighted Average Ceiling Price ($/Bbl) |
Q3-Q4 2019 |  |  | 5,000 |  |  | $ | 50.00 |  |  | $ | 63.00 |  |  | $ | 74.80 |
|  | Oil Basis Swaps |
Period |  | Index |  | Volume (Bbls/d) |  |  | Weighted Average Differential to WTI ($/Bbl) |
Q3-Q4 2019 |  | Midland Sweet |  |  | 28,000 |  |  | $ | (0.46 | )
Q3-Q4 2019 |  | Argus LLS |  |  | 7,500 |  |  | $ | 5.18 |
Q3-Q4 2019 |  | Argus MEH |  |  | 26,000 |  |  | $ | 3.33 |
Q3-Q4 2019 |  | NYMEX Roll |  |  | 38,000 |  |  | $ | 0.45 |
Q1-Q4 2020 |  | Argus MEH |  |  | 9,000 |  |  | $ | 3.44 |
Q1-Q4 2020 |  | NYMEX Roll |  |  | 42,000 |  |  | $ | 0.32 |
As of June 30, 2019, 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 |
Period |  | Volume (MMBtu/d) |  |  | Weighted Average Price ($/MMBtu) |  |  | Volume (MMBtu/d) |  |  | Weighted Average Floor Price ($/MMBtu) |  |  | Weighted Average Ceiling Price ($/MMBtu) |
Q3-Q4 2019 |  |  | 257,800 |  |  | $ | 2.80 |  |  |  | 200,500 |  |  | $ | 2.63 |  |  | $ | 3.02 |
Q1-Q4 2020 |  |  | 81,409 |  |  | $ | 2.77 |  |  |  | 42,557 |  |  | $ | 2.73 |  |  | $ | 3.03 |
|  | Natural Gas Basis Swaps |
Period |  | Index |  | Volume (MMBtu/d) |  |  | Weighted Average Differential to Henry Hub ($/MMBtu) |
Q3-Q4 2019 |  | Panhandle Eastern Pipe Line |  |  | 20,000 |  |  | $ | (0.56 | )
Q3-Q4 2019 |  | El Paso Natural Gas |  |  | 130,000 |  |  | $ | (1.46 | )
Q3-Q4 2019 |  | Houston Ship Channel |  |  | 162,500 |  |  | $ | 0.01 |
Q1-Q4 2020 |  | Panhandle Eastern Pipe Line |  |  | 30,000 |  |  | $ | (0.47 | )
Q1-Q4 2020 |  | El Paso Natural Gas |  |  | 40,000 |  |  | $ | (0.67 | )
Q1-Q4 2020 |  | Houston Ship Channel |  |  | 10,000 |  |  | $ | 0.02 |
As of June 30, 2019, Devon had the following open NGL derivative positions. Devon’s NGL positions settle against the average of the prompt month OPIS Mont Belvieu, Texas index.
|  |  |  | Price Swaps |
Period |  | Product |  | Volume (Bbls/d) |  |  | Weighted Average Price ($/Bbl) |
Q3-Q4 2019 |  | Ethane |  |  | 1,000 |  |  | $ | 11.55 |
Q3-Q4 2019 |  | Natural Gasoline |  |  | 4,500 |  |  | $ | 55.93 |
Q3-Q4 2019 |  | Normal Butane |  |  | 4,000 |  |  | $ | 33.69 |
Q3-Q4 2019 |  | Propane |  |  | 8,500 |  |  | $ | 30.01 |
Q1-Q4 2020 |  | Propane |  |  | 2,500 |  |  | $ | 27.29 |
Financial Statement Presentation The following table presents the net gains and losses by derivative financial instrument type followed by the corresponding individual consolidated comprehensive statements of earnings caption.
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Commodity derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Upstream revenues |  | $ | 140 |  |  | $ | (487 | ) |  | $ | (465 | ) |  | $ | (600 | )
Marketing revenues |  |  | — |  |  |  | (1 | ) |  |  | 1 |  |  |  | (1 | )
Interest rate derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other expenses |  |  | — |  |  |  | 19 |  |  |  | — |  |  |  | 65 |
Net gains (losses) recognized |  | $ | 140 |  |  | $ | (469 | ) |  | $ | (464 | ) |  | $ | (536 | )
The following table presents the derivative fair values by derivative financial instrument type followed by the corresponding individual consolidated balance sheet caption.
|  | June 30, 2019 |  |  | December 31, 2018 |
Commodity derivative assets: |  |  |  |  |  |  |  |
Other current assets |  | $ | 117 |  |  | $ | 634 |
Other long-term assets |  |  | 10 |  |  |  | 40 |
Total derivative assets |  | $ | 127 |  |  | $ | 674 |
Commodity derivative liabilities: |  |  |  |  |  |  |  |
Other current liabilities |  | $ | 7 |  |  | $ | 32 |
Other long-term liabilities |  |  | — |  |  |  | 1 |
Total derivative liabilities |  | $ | 7 |  |  | $ | 33 |

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration