Derivative Instruments (Tables)
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12 Months Ended |
Dec. 31, 2018 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Schedule of open fixed price swap positions |
Below is a summary of the Company's open fixed price swap positions as of December 31, 2018.
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Location |
Daily Volume (MMBtu/day) |
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Weighted
Average Price
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2019 |
NYMEX Henry Hub |
1,254,000 |
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|
$ |
2.83 |
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2020 |
NYMEX Henry Hub |
204,000 |
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$ |
2.77 |
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Location |
Daily Volume (Bbls/day) |
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Weighted
Average Price
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2019 |
Mont Belvieu C2 |
1,000 |
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$ |
18.48 |
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2019 |
Mont Belvieu C3 |
4,000 |
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$ |
28.87 |
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2019 |
Mont Belvieu C5 |
500 |
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$ |
54.08 |
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During the fourth quarter of 2018, the Company early terminated all of its fixed price swaps for oil based on both Argus Louisiana Light Sweet Crude and NYMEX West Texas Intermediate scheduled to settle during 2019 covering 5,000 Bbls/day. These early terminations resulted in approximately $0.4 million of settlement losses which are included in net (loss) gain on natural gas, oil, and NGL derivatives in the accompanying consolidated statement of operations.
The Company sold call options and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.
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Location |
Daily Volume (MMBtu/day) |
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Weighted
Average Price
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January 2019 - March 2019 |
NYMEX Henry Hub |
50,000 |
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|
$ |
3.13 |
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April 2019 - December 2019 |
NYMEX Henry Hub |
30,000 |
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$ |
3.10 |
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| Schedule of natural gas basis swap positions |
As of December 31, 2018, the Company had the following natural gas basis swap positions for Transco Zone 4.
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Location |
Daily Volume (MMBtu/day) |
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Hedged Differential |
2019 |
Transco Zone 4 |
60,000 |
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$ |
(0.05 |
) |
2020 |
Transco Zone 4 |
60,000 |
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|
$ |
(0.05 |
) |
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| Schedule of derivative instruments on a gross basis |
The following table presents the fair value of the Company's derivative instruments on a gross basis at December 31, 2018 and 2017:
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December 31, |
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2018 |
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2017 |
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(In thousands) |
Short-term derivative instruments - asset |
$ |
21,352 |
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$ |
78,847 |
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Long-term derivative instruments - asset |
$ |
— |
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$ |
8,685 |
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Short-term derivative instruments - liability |
$ |
20,401 |
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$ |
32,534 |
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Long-term derivative instruments - liability |
$ |
13,992 |
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$ |
2,989 |
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| Schedule of net gain (loss) on derivatives |
The following table presents the gain and loss recognized in net (loss) gain on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the years ended December 31, 2018, 2017, and 2016.
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Net (loss) gain on derivative instruments |
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For the Year Ended December 31, |
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2018 |
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2017 |
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2016 |
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(In thousands) |
Natural gas derivatives |
$ |
(116,130 |
) |
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$ |
232,143 |
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$ |
(165,933 |
) |
Oil derivatives |
(13,084 |
) |
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(3,350 |
) |
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(5,387 |
) |
Natural gas liquids derivatives |
5,735 |
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(15,114 |
) |
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(3,186 |
) |
Total |
$ |
(123,479 |
) |
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$ |
213,679 |
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$ |
(174,506 |
) |
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| Schedule of recognized derivative assets |
The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.
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As of December 31, 2018 |
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Derivative instruments, gross |
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Netting adjustments |
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Derivative instruments, net |
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(In thousands) |
Derivative assets |
$ |
21,352 |
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|
$ |
(19,289 |
) |
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$ |
2,063 |
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Derivative liabilities |
$ |
(34,393 |
) |
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$ |
19,289 |
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$ |
(15,104 |
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As of December 31, 2017 |
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Derivative instruments, gross |
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Netting adjustments |
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Derivative instruments, net |
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(In thousands) |
Derivative assets |
$ |
87,532 |
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|
$ |
(22,199 |
) |
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$ |
65,333 |
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Derivative liabilities |
$ |
(35,523 |
) |
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$ |
22,199 |
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$ |
(13,324 |
) |
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| Schedule of recognized derivative liabilities |
The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.
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As of December 31, 2018 |
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Derivative instruments, gross |
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Netting adjustments |
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Derivative instruments, net |
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(In thousands) |
Derivative assets |
$ |
21,352 |
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|
$ |
(19,289 |
) |
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$ |
2,063 |
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Derivative liabilities |
$ |
(34,393 |
) |
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$ |
19,289 |
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$ |
(15,104 |
) |
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As of December 31, 2017 |
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Derivative instruments, gross |
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Netting adjustments |
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Derivative instruments, net |
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(In thousands) |
Derivative assets |
$ |
87,532 |
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|
$ |
(22,199 |
) |
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$ |
65,333 |
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Derivative liabilities |
$ |
(35,523 |
) |
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$ |
22,199 |
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$ |
(13,324 |
) |
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