XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.21.2

Derivative Instruments | 9 Months Ended
--- | ---
Jun. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments Crude Oil and Natural Gas Contracts The Company uses commodity based derivative contracts to reduce exposure to fluctuations in crude oil and natural gas prices. While the use of these contracts limits the downside risk for adverse price changes, their use may also limit future revenues from favorable price changes. For the three and nine months ended June 30, 2021 and 2020, we have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are recognized in earnings. As of June 30, 2021, the Company's oil and natural gas derivative instruments consisted of the following types: •Fixed Price Swaps – the Company receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume. •Costless collars – the combination of a put option (fixed floor) and call option (fixed ceiling), with the options structured so that the premium paid to purchase the put option is offset by the premium received from the sale of the call option. If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price. If the market price is between the put and the call strike price, no payments are due from either party. •Basis Protection Swaps – Basis swaps are settled based on differences between a fixed price differential and the differential between the settlement prices of two referenced indexes. We receive the fixed price differential and pay the differential between the referenced indexes. The following table summarizes the open financial derivative positions as of June 30, 2021, related to crude oil and natural gas production.
|  |  |  | Weighted Average Price
Calendar Quarter |  | Notional Volume |  | Fixed |  | Put |  | Call
|  |  |  | ($ per unit)
Crude Oil Swaps (Bbl) |  |  |  |  |  |  |  |
Q3 2021 |  | 564,278 |  |  | $ | 51.57 |  |  | $ | — |  |  | $ | — |
Q4 2021 |  | 558,116 |  |  | $ | 51.65 |  |  | $ | — |  |  | $ | — |
2022 |  | 1,320,000 |  |  | $ | 53.59 |  |  | $ | — |  |  | $ | — |
2023 |  | 360,000 |  |  | $ | 59.01 |  |  | $ | — |  |  | $ | — |
Natural Gas Swaps (Mcf) |  |  |  |  |  |  |  |
Q3 2021 |  | 555,000 |  |  | $ | 3.03 |  |  | $ | — |  |  | $ | — |
Q4 2021 |  | 555,000 |  |  | $ | 3.03 |  |  | $ | — |  |  | $ | — |
Crude Oil Collars (Bbl) |  |  |  |  |  |  |  |
2022 |  | 360,000 |  |  | $ | — |  |  | $ | 35.00 |  |  | $ | 42.63 |
Crude Oil Basis (Bbl) |  |  |  |  |  |  |  |
Q3 2021 |  | 435,000 |  |  | $ | 0.40 |  |  | $ | — |  |  | $ | — |
Q4 2021 |  | 435,000 |  |  | $ | 0.40 |  |  | $ | — |  |  | $ | — |
2022 |  | 720,000 |  |  | $ | 0.40 |  |  | $ | — |  |  | $ | — |
Interest Rate Contracts The Company has entered into floating-to-fixed interest rate swaps (we receive a floating market rate equal to one-month LIBOR and pay a fixed interest rate) to manage interest rate exposure related to the Company's revolving credit facility. The following table summarizes the open interest rate derivative positions as of June 30, 2021:
Open Coverage Period |  | Notional Amount |  | Fixed Rate
|  | (In thousands) |  |
Floating-to-Fixed Interest Rate Swaps |  |  |  |
July 2021 - September 2021 |  | $ | 40,000 |  |  | 1.77 | %
July 2021 - September 2021 |  | $ | 15,000 |  |  | 0.71 | %
September 2021 - September 2023 |  | $ | 40,000 |  |  | 0.24 | %
Balance Sheet Presentation of Derivatives The following table presents the location and fair value of the Company’s derivative contracts included in the accompanying consolidated balance sheets as of June 30, 2021 and September 30, 2020.
|  | June 30, 2021
Balance Sheet Classification |  | Gross Fair Value |  | Amounts Netted |  | Net Fair Value
|  | (In thousands)
Current derivative assets |  | $ | 533 |  |  | $ | (307) |  |  | $ | 226 |
Non-current derivative assets |  | 402 |  |  | (295) |  |  | 107 |
Current derivative liabilities |  | (36,558) |  |  | 307 |  |  | (36,251) |
Non-current derivative liabilities |  | (11,531) |  |  | 295 |  |  | (11,236) |
Total |  | $ | (47,154) |  |  | $ | — |  |  | $ | (47,154) |
|  | September 30, 2020
Balance Sheet Classification |  | Gross Fair Value |  | Amounts Netted |  | Net Fair Value
|  | (In thousands)
Current derivative assets |  | $ | 19,690 |  |  | $ | (871) |  |  | $ | 18,819 |
Non-current derivative assets |  | 4,651 |  |  | (1,549) |  |  | 3,102 |
Current derivative liabilities |  | (871) |  |  | 871 |  |  | — |
Non-current derivative liabilities |  | (1,549) |  |  | 1,549 |  |  | — |
Total |  | $ | 21,921 |  |  | $ | — |  |  | $ | 21,921 |
The following table presents the Company's derivative activities for the three and nine months ended June 30, 2021 and 2020:
|  | Three Months Ended June 30, |  | Nine Months Ended June 30,
|  | 2021 |  | 2020 |  | 2021 |  | 2020
|  | (In thousands)
Fair value of net asset (liability), beginning of period |  | $ | (19,470) |  |  | $ | 60,671 |  |  | $ | 21,921 |  |  | $ | 14,959 |
Gain (loss) on derivatives |  | (35,396) |  |  | (14,205) |  |  | (74,208) |  |  | 36,999 |
Settlements on derivative contracts |  | 7,712 |  |  | (14,669) |  |  | 5,133 |  |  | (20,161) |
Fair value of net asset (liability), end of period |  | $ | (47,154) |  |  | $ | 31,797 |  |  | $ | (47,154) |  |  | $ | 31,797 |

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