Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)

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DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)
9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Cash Settlements on Liquidated Derivative Instruments and Non-Cash Gains and Losses on Open Derivative Instruments The following table presents cash settlements on matured or liquidated derivative instruments and non-cash gains and losses on open derivative instruments for the periods presented.  Cash receipts and payments below reflect proceeds received upon early liquidation of derivative positions and gains or losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price of matured contracts.  Non-cash gains and losses below represent the change in fair value of derivative instruments which continue to be held at period-end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured or were liquidated during the period.
  Three Months Ended
September 30,
Nine Months Ended
September 30,
(In thousands) 2019 2018 2019 2018
Cash Received (Paid) on Settled Derivatives(1)
$ 18,386    $ (12,923)   $ 35,666    $ (33,320)  
Non-Cash Mark-to-Market Gain (Loss) on Derivatives 57,506    (30,225)   (62,806)   (72,303)  
Gain (Loss) on Derivative Instruments, Net $ 75,892    $ (43,148)   $ (27,139)   $ (105,622)  
______________
(1)The three and nine months ended September 30, 2019, includes approximately $7.4 million of net cash proceeds from crude oil derivative contracts that were restructured in the third quarter of 2019 prior to their contractual maturities.
Weighted Average Price of Open Commodity Swap Derivative Instruments The following table reflects the weighted average price of open commodity price swap derivative contracts as of September 30, 2019, by year with associated volumes.
Year Volumes (Bbl) Weighted
Average Price ($)
2019 2,460,411    $ 58.96   
2020 9,427,594    58.53   
2021 5,740,924    55.76   
2022(1)
1,372,866    52.57   
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(1)The Company has entered into crude oil derivative contracts that give counterparties the option to extend certain current derivative contracts for additional periods. Options covering a notional volume of 2.0 million barrels for 2022 are exercisable on or about December 31, 2021. If the counterparties exercise all such options, the notional volume of the Company’s existing crude oil derivative contracts will increase by 2.0 million barrels at a weighted average price of $54.84 per barrel for 2022.
Summary of Open Commodity Basis Swap Contracts The following table reflects open commodity basis swap contracts as of September 30, 2019.
Settlement Period Total Volumes (Bbls) Weighted
Average Differential ($/Bbl)
10/01/19 – 12/31/19 920,000    $ (2.41)  
Amounts and Classification of Outstanding Derivative Financial Instruments and Reconciliation Between Gross Assets and Liabilities The following table sets forth the amounts, on a gross basis, and classification of the Company’s outstanding derivative financial instruments at September 30, 2019 and December 31, 2018, respectively.  Certain amounts may be presented on a net basis on the condensed financial statements when such amounts are with the same counterparty and subject to a master netting arrangement.
Type of Crude Oil Contract Balance Sheet Location September 30, 2019 Estimated Fair Value December 31, 2018 Estimated Fair Value
Derivative Assets:   (In thousands)
Price Swap Contracts Current Assets $ 65,018    $ 108,514   
Basis Swap Contracts Current Assets —    7,356   
Price Swap Contracts Noncurrent Assets 51,937    61,843   
Total Derivative Assets   $ 116,954    $ 177,713   
Derivative Liabilities:      
Price Swap Contracts Current Liabilities $ (2,486)   $ —   
Price Swap Contracts Noncurrent Liabilities (653)   —   
Price Swaptions Contracts Noncurrent Liabilities (8,601)   —   
Total Derivative Liabilities   $ (11,741)   $ —   

The use of derivative transactions involves the risk that the counterparties will be unable to meet the financial terms of such transactions.  When the Company has netting arrangements with its counterparties that provide for offsetting payables against receivables from separate derivative instruments these assets and liabilities are netted on the balance sheet.  The tables presented below provide reconciliation between the gross assets and liabilities and the amounts reflected on the balance sheet.  The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.

  Estimated Fair Value at September 30, 2019
(In thousands) Gross Amounts of
Recognized Assets (Liabilities)
Gross Amounts Offset
in the Balance Sheet
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:  
Current Assets $ 65,018    $ (2,486)   $ 62,531   
Noncurrent Assets 51,937    (9,254)   42,682   
Total Derivative Assets $ 116,954    $ (11,741)   $ 105,213   
Offsetting of Derivative Liabilities:  
Current Liabilities $ (2,486)   $ 2,486    $ —   
Noncurrent Liabilities (9,254)   9,254    —   
Total Derivative Liabilities $ (11,741)   $ 11,741    $ —   

  Estimated Fair Value at December 31, 2018
 (In thousands) Gross Amounts of
Recognized Assets (Liabilities)
Gross Amounts Offset
in the Balance Sheet
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:  
Current Assets $ 116,620    $ (750)   $ 115,870   
Non-Current Assets 61,857    (14)   61,843   
Total Derivative Assets $ 178,477    $ (764)   $ 177,713   
Offsetting of Derivative Liabilities:  
Current Liabilities $ (750)   $ 750    $ —   
Non-Current Liabilities (14)   14    —   
Total Derivative Liabilities $ (764)   $ 764    $ —