XML 27 R17.htm IDEA: XBRL DOCUMENT
v3.22.1

Derivative Activities | 3 Months Ended
--- | ---
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Activities | (10) DERIVATIVE ACTIVITIES We use commodity-based derivative contracts to manage exposure to commodity price fluctuations. We do not enter into these arrangements for speculative or trading purposes. We utilize commodity swaps, collars, three-way collars or swaptions to (1) reduce the effect of price volatility of the commodities we produce and sell and (2) support our annual capital budget and expenditure plans. The fair value of our derivative contracts, represented by the estimated amount that would be realized upon termination, based on a comparison of the contract price and a reference price, generally the New York Mercantile Exchange (NYMEX) for natural gas and crude oil or Mont Belvieu for NGLs, approximated a net loss of $989.8 million at March 31, 2022. These contracts expire monthly through December 2024. The following table sets forth our commodity-based derivative volumes by year as of March 31, 2022, excluding our basis swaps and divestiture contingent consideration which are discussed separately below:
Period |  | Contract Type |  | Volume Hedged |  | Weighted Average Hedge Price
|  |  |  |  |  | Swap |  | Sold Put |  | Floor |  | Ceiling
Natural Gas (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2022 |  | Swaps |  | 496,655 Mmbtu/day |  | $ | 3.10 |  |  |  |  |  |  |  |
2022 |  | Collars |  | 278,073 Mmbtu/day |  |  |  |  |  |  | $ | 3.31 |  | $ | 3.72
2022 |  | Three-way Collars |  | 217,745 Mmbtu/day |  |  |  | $ | 2.30 |  | $ | 2.84 |  | $ | 3.45
2023 |  | Swaps |  | 260,000 Mmbtu/day |  | $ | 3.41 |  |  |  |  |  |  |  |
2023 |  | Collars |  | 234,932 Mmbtu/day |  |  |  |  |  |  | $ | 3.28 |  | $ | 4.31
2023 |  | Three-way Collars |  | 149,863 Mmbtu/day |  |  |  | $ | 2.28 |  | $ | 3.30 |  | $ | 4.28
2024 |  | Collars |  | 200,000 Mmbtu/day |  |  |  |  |  |  | $ | 3.00 |  | $ | 4.26
Crude Oil |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2022 |  | Swaps |  | 6,833 bbls/day |  | $ | 61.90 |  |  |  |  |  |  |  |
2023 |  | Swaps |  | 5,123 bbls/day |  | $ | 71.39 |  |  |  |  |  |  |  |
NGLs (C2-Ethane) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
April-June 2022 |  | Swaps |  | 2,681 bbls/day |  | $ | 0.41/gallon |  |  |  |  |  |  |  |
NGLs (C3-Propane) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
April-June 2022 |  | Swaps |  | 3,989 bbls/day |  | $ | 1.24/gallon |  |  |  |  |  |  |  |
NGLs (NC4-Butane) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
April-June 2022 |  | Swaps |  | 3,000 bbls/day |  | $ | 1.50/gallon |  |  |  |  |  |  |  |
NGLs (C5-Natural Gasoline) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2022 |  | Swaps |  | 2,331 bbls/day |  | $ | 1.78/gallon |  |  |  |  |  |  |  |
2022 |  | Collars |  | 1,530 bbls/day |  |  |  |  |  |  | $ | 1.77/gallon |  | $ | 1.88/gallon
(1) | We also sold natural gas call swaptions of 100,000 Mmbtu/day for 2023 at a weighted average price of $3.21 Mmbtu/day.
Every derivative instrument is required to be recorded on the balance sheet as either an asset or a liability measured at its fair value. We recognize all changes in fair value of these derivatives as earnings in derivative fair value income or loss in the periods in which they occur. Basis Swap Contracts In addition to the swaps, collars and swaptions described above, at March 31, 2022, we had natural gas basis swap contracts which lock in the differential between NYMEX Henry Hub and certain of our physical pricing indices. These contracts settle monthly through December 2024 and include a total volume of 187,405,000 Mmbtu. The fair value of these contracts was a gain of $22.5 million at March 31, 2022. Divestiture Contingent Consideration In addition to the derivatives described above, our right to receive contingent consideration in conjunction with the sale of our North Louisiana assets was determined to be a derivative financial instrument that is not designated as a hedging instrument. The remaining contingent consideration of up to $45.5 million is based on future achievement of natural gas and oil prices based on published indexes and realized NGLs prices of the buyer for the years 2022 and 2023. All changes in the fair value are recognized as a gain or loss in earnings in the period they occur in derivative fair value income or loss in our consolidated statements of operations. For first three months 2022, this fair value has increased $8.1 million for a fair value of $34.8 million as of March 31, 2022. Derivative Assets and Liabilities The combined fair value of derivatives included in the accompanying consolidated balance sheets as of March 31, 2022 and December 31, 2021 is summarized below. The assets and liabilities are netted where derivatives with both gain and loss positions are held by a single counterparty and we have master netting arrangements. The tables below provide additional information relating to our master netting arrangements with our derivative counterparties (in thousands):
|  |  | March 31, 2022 |
|  |  | Gross Amounts of Recognized Assets |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of Assets Presented in the Balance Sheet |
Derivative assets: |  |  |  |  |  |  |  |  |  |
Natural gas | –basis swaps |  | $ | 27,129 |  |  | $ | (23,113 | ) |  | $ | 4,016 |
Divestiture contingent consideration |  |  | 34,760 |  |  |  | — |  |  |  | 34,760 |
|  |  | $ | 61,889 |  |  | $ | (23,113 | ) |  | $ | 38,776 |
|  |  | March 31, 2022 |
|  |  | Gross Amounts of Recognized (Liabilities) |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of (Liabilities) Presented in the Balance Sheet |
Derivative (liabilities): |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | (447,051 | ) |  | $ | — |  |  | $ | (447,051 | )
| –swaptions |  |  | (45,871 | ) |  |  | — |  |  |  | (45,871 | )
| –collars |  |  | (220,908 | ) |  |  | — |  |  |  | (220,908 | )
| –three-way collars |  |  | (174,458 | ) |  |  | — |  |  |  | (174,458 | )
| –basis swaps |  |  | (4,677 | ) |  |  | 23,113 |  |  |  | 18,436 |
Crude oil | –swaps |  |  | (80,270 | ) |  |  | — |  |  |  | (80,270 | )
NGLs | –C2 ethane swaps |  |  | (202 | ) |  |  | — |  |  |  | (202 | )
| –C3 propane swaps |  |  | (2,048 | ) |  |  | — |  |  |  | (2,048 | )
| –NC4 butane swaps |  |  | (1,640 | ) |  |  | — |  |  |  | (1,640 | )
| –C5 natural gasoline swaps |  |  | (11,849 | ) |  |  | — |  |  |  | (11,849 | )
| –C5 natural gasoline collars |  |  | (5,481 | ) |  |  | — |  |  |  | (5,481 | )
|  |  | $ | (994,455 | ) |  | $ | 23,113 |  |  | $ | (971,342 | )
|  |  | December 31, 2021 |
|  |  | Gross Amounts of Recognized Assets |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of Assets Presented in the Balance Sheet |
Derivative assets: |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | 22,491 |  |  | $ | (18,111 | ) |  | $ | 4,380 |
| –collars |  |  | 12,378 |  |  |  | (8,600 | ) |  |  | 3,778 |
| –three-way collars |  |  | 12,234 |  |  |  | (8,449 | ) |  |  | 3,785 |
| –basis swaps |  |  | 18,092 |  |  |  | (10,487 | ) |  |  | 7,605 |
Crude oil | –swaps |  |  | 368 |  |  |  | (2,153 | ) |  |  | (1,785 | )
NGLs | –C3 propane spread |  |  | 4,153 |  |  |  | (4,153 | ) |  |  | — |
| –C5 natural gasoline swaps |  |  | 266 |  |  |  | (363 | ) |  |  | (97 | )
| –C5 natural gasoline collars |  |  | 221 |  |  |  | (221 | ) |  |  | — |
Freight | –swaps |  |  | 114 |  |  |  | (81 | ) |  |  | 33 |
Divestiture contingent consideration |  |  | 26,640 |  |  |  | — |  |  |  | 26,640 |
|  |  | $ | 96,957 |  |  | $ | (52,618 | ) |  | $ | 44,339 |
|  |  | December 31, 2021 |
|  |  | Gross Amounts of Recognized (Liabilities) |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of (Liabilities) Presented in the Balance Sheet |
Derivative (liabilities): |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | (121,759 | ) |  | $ | 18,111 |  |  | $ | (103,648 | )
| –swaptions |  |  | (11,149 | ) |  |  | — |  |  |  | (11,149 | )
| –collars |  |  | (16,579 | ) |  |  | 8,600 |  |  |  | (7,979 | )
| –three-way collars |  |  | (37,166 | ) |  |  | 8,449 |  |  |  | (28,717 | )
| –calls |  |  | (61 | ) |  |  | — |  |  |  | (61 | )
| –basis swaps |  |  | (2,064 | ) |  |  | 10,487 |  |  |  | 8,423 |
Crude oil | –swaps |  |  | (27,252 | ) |  |  | 2,153 |  |  |  | (25,099 | )
NGLs | –C3 propane spread |  |  | (4,030 | ) |  |  | 4,153 |  |  |  | 123 |
| –C5 natural gasoline swaps |  |  | (2,048 | ) |  |  | 363 |  |  |  | (1,685 | )
| –C5 natural gasoline collars |  |  | (1,493 | ) |  |  | 221 |  |  |  | (1,272 | )
Freight | –swaps |  |  | — |  |  |  | 81 |  |  |  | 81 |
|  |  | $ | (223,601 | ) |  | $ | 52,618 |  |  | $ | (170,983 | )
The effects of our derivatives on our consolidated statements of operations are summarized below (in thousands):
|  | Derivative Fair Value (Loss) Income |
|  | Three Months Ended March 31, |
|  | 2022 |  |  | 2021 |
Commodity swaps |  | $ | (521,355 | ) |  | $ | (52,764 | )
Swaptions |  |  | (34,723 | ) |  |  | 2,657 |
Three-way collars |  |  | (179,926 | ) |  |  | 873 |
Collars |  |  | (232,292 | ) |  |  | (13,288 | )
Calls |  |  | (1,363 | ) |  |  | (775 | )
Basis swaps |  |  | 22,515 |  |  |  | 2,155 |
Freight swaps |  |  | (33 | ) |  |  | (667 | )
Divestiture contingent consideration |  |  | 8,120 |  |  |  | 3,930 |
Total |  | $ | (939,057 | ) |  | $ | (57,879 | )

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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration