|
3. |
Derivative Financial Instruments |
Commodity Derivatives
As of December 31, 2016, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX WTI futures price. The second 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) |
|
|
Q1-Q4 2017 |
|
|
72,527 |
|
|
$ |
54.32 |
|
|
|
53,245 |
|
|
$ |
45.16 |
|
|
$ |
57.97 |
|
|
Q1-Q4 2018 |
|
|
2,600 |
|
|
$ |
53.38 |
|
|
|
6,189 |
|
|
$ |
46.97 |
|
|
$ |
56.97 |
|
|
|
|
Oil Basis Swaps |
|
|
Period |
|
Index |
|
Volume (Bbls/d) |
|
|
Weighted Average
Differential to WTI
($/Bbl) |
|
|
Q1-Q4 2017 |
|
Midland Sweet |
|
|
10,000 |
|
|
$ |
(0.43 |
) |
As of December 31, 2016, 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) |
|
|
Q1-Q4 2017 |
|
|
189,753 |
|
|
$ |
3.13 |
|
|
|
335,274 |
|
|
$ |
2.97 |
|
|
$ |
3.38 |
|
|
Q1-Q4 2018 |
|
|
29,705 |
|
|
$ |
3.17 |
|
|
|
19,110 |
|
|
$ |
3.20 |
|
|
$ |
3.50 |
|
|
|
|
Natural Gas Basis Swaps |
|
|
Period |
|
Index |
|
Volume
(MMBtu/d) |
|
|
Weighted Average
Differential to
Henry Hub
($/MMBtu) |
|
|
Q1-Q4 2017 |
|
Panhandle Eastern Pipe Line |
|
|
150,000 |
|
|
$ |
(0.34 |
) |
|
Q1-Q4 2017 |
|
El Paso Natural Gas |
|
|
80,000 |
|
|
$ |
(0.13 |
) |
|
Q1-Q4 2017 |
|
Houston Ship Channel |
|
|
35,000 |
|
|
$ |
0.06 |
|
|
Q1-Q4 2017 |
|
Transco Zone 4 |
|
|
205,000 |
|
|
$ |
0.03 |
|
|
Q1 2018 |
|
Panhandle Eastern Pipe Line |
|
|
50,000 |
|
|
$ |
(0.29 |
) |
As of December 31, 2016, EnLink had the following open derivative positions associated with gas processing and fractionation. EnLink’s NGL positions settle by purity product against the average of the prompt month OPIS Mont Belvieu, Texas index. EnLink’s natural gas positions settle against the Henry Hub Gas Daily index.
|
Period |
|
Product |
|
Volume (Total) |
|
Weighted Average Price Paid |
|
Weighted Average Price Received |
|
Q1 2017-Q4 2017 |
|
Propane |
|
|
434 |
|
MBbls |
|
Index |
|
$0.55/gal |
|
Q1 2017-Q4 2017 |
|
Normal Butane |
|
|
161 |
|
MBbls |
|
Index |
|
$0.70/gal |
|
Q1 2017-Q4 2017 |
|
Natural Gas |
|
|
21,685 |
|
MMBtu/d |
|
Index |
|
$3.14/MMbtu |
Interest Rate Derivatives
As of December 31, 2016, Devon had the following open interest rate derivative positions:
|
Notional |
|
|
Rate Received |
|
|
Rate Paid |
|
|
Expiration |
|
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
750 |
|
|
Three Month LIBOR |
|
|
|
2.98% |
|
|
December 2048 (1) |
|
$ |
100 |
|
|
|
1.76% |
|
|
Three Month LIBOR |
|
|
January 2019 |
|
(1) |
Mandatory settlement in December 2018. |
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.
|
|
|
Year Ended December 31, |
|
|
|
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Commodity derivatives: |
|
(Millions) |
|
|
Oil, gas and NGL derivatives |
|
$ |
(201 |
) |
|
$ |
503 |
|
|
$ |
1,989 |
|
|
Marketing and midstream revenues |
|
|
(13 |
) |
|
|
9 |
|
|
|
22 |
|
|
Interest rate derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other nonoperating items |
|
|
(19 |
) |
|
|
(20 |
) |
|
|
(1 |
) |
|
Foreign currency derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other nonoperating items |
|
|
(153 |
) |
|
|
246 |
|
|
|
60 |
|
|
Net gains (losses) recognized |
|
$ |
(386 |
) |
|
$ |
738 |
|
|
$ |
2,070 |
|
The following table presents the derivative fair values by derivative financial instrument type followed by the corresponding individual consolidated balance sheet caption.
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
|
|
(Millions) |
|
|
Commodity derivative assets: |
|
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
9 |
|
|
$ |
34 |
|
|
Other long-term assets |
|
|
1 |
|
|
|
1 |
|
|
Interest rate derivative assets: |
|
|
|
|
|
|
|
|
|
Other current assets |
|
|
1 |
|
|
|
1 |
|
|
Other long-term assets |
|
|
— |
|
|
|
1 |
|
|
Foreign currency derivative assets: |
|
|
|
|
|
|
|
|
|
Other current assets |
|
|
— |
|
|
|
8 |
|
|
Total derivative assets |
|
$ |
11 |
|
|
$ |
45 |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity derivative liabilities: |
|
|
|
|
|
|
|
|
|
Other current liabilities |
|
$ |
187 |
|
|
$ |
14 |
|
|
Other long-term liabilities |
|
|
16 |
|
|
|
4 |
|
|
Interest rate derivative liabilities: |
|
|
|
|
|
|
|
|
|
Other long-term liabilities |
|
|
41 |
|
|
|
22 |
|
|
Foreign currency derivative liabilities: |
|
|
|
|
|
|
|
|
|
Other current liabilities |
|
|
— |
|
|
|
8 |
|
|
Total derivative liabilities |
|
$ |
244 |
|
|
$ |
48 |
|
|