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Derivative Contracts
 9 Months Ended
Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
QEP has established policies and procedures for managing commodity price volatility through the use of derivative instruments. In the normal course of business, QEP uses commodity price derivative instruments to reduce the impact of potential downward movements in commodity prices on cash flow, returns on capital investment, and other financial results. However, these instruments typically limit gains from favorable price movements. The volume of production subject to commodity derivative instruments and the mix of the instruments are frequently evaluated and adjusted by management in response to changing market conditions. QEP may enter into commodity derivative contracts for up to 100% of forecasted production, but generally, QEP enters into commodity derivative contracts for approximately 50% to 75% of its forecasted annual production by the end of the first quarter of each fiscal year. QEP does not enter into commodity derivative contracts for speculative purposes.

QEP uses commodity derivative instruments known as fixed-price swaps, basis swaps or costless collars to realize a known price or price range for a specific volume of production delivered into a regional sales point. QEP's commodity derivative instruments do not require the physical delivery of oil or gas between the parties at settlement. All transactions are settled in cash with one party paying the other for the net difference in prices, multiplied by the contract volume, for the settlement period. Oil price derivative instruments are typically structured as NYMEX fixed-price swaps based at Cushing, Oklahoma. QEP also enters into oil price derivative swaps that use Intercontinental Exchange, Inc. (ICE) Brent or regional price indices as the reference price. In addition, QEP enters into oil basis swaps to achieve a fixed-price swap for a portion of its oil sales at prices that reference specific regional index prices. Gas price derivative instruments are typically structured as fixed-price swaps or collars at NYMEX Henry Hub or regional price indices.
QEP does not currently have any commodity derivative instruments that have margin requirements or collateral provisions that would require payments prior to the scheduled settlement dates. QEP's commodity derivative contract counterparties are typically financial institutions and energy trading firms with investment-grade credit ratings. QEP routinely monitors and manages its exposure to counterparty risk by requiring specific minimum credit standards for all counterparties, actively monitoring counterparties' public credit ratings and avoiding the concentration of credit exposure by transacting with multiple counterparties. The Company has master-netting agreements with some counterparties that allow the offsetting of receivables and payables in a default situation.

Derivative Contracts – Production
The following table presents QEP's volumes and average prices for its commodity derivative swap contracts as of September 30, 2020:
YearIndexTotal VolumesAverage Swap Price per Unit
(in millions)
Oil sales(bbls)($/bbl)
2020NYMEX WTI3.9 $57.60 
2020Argus WTI Midland0.4 $57.30 
2021 (January - June)NYMEX WTI5.0 $44.78 
2021 (July - December)NYMEX WTI5.0 $42.22 
Gas sales(MMbtu)($/MMbtu)
2020
IF Waha(1)
3.7 $0.97 
2020NYMEX HH2.8 $2.20 
2021
IF Waha(1)
18.2 $1.92 
2021NYMEX HH9.1 $2.44 
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(1)IF Waha Index pricing reported in Platts' Inside FERC's Gas Market Report, reflects the weighted average price of Natural Gas transactions at the Waha Hub in west Texas on the first day of the month.

QEP uses oil basis swaps, combined with NYMEX WTI fixed-price swaps, to achieve fixed price swaps for the location at which it physically sells its production. The following table presents details of QEP's oil basis swaps as of September 30, 2020:
YearIndexBasisTotal VolumesWeighted-Average Differential
(in millions)
Oil sales(bbls)($/bbl)
2020NYMEX WTIArgus WTI Midland1.8 $0.22 
2021NYMEX WTIArgus WTI Midland4.4 $0.99 

The following table presents QEP's volumes and average prices for its commodity derivative costless oil collars as of September 30, 2020:
YearIndexTotal VolumesAverage Price FloorAverage Price Ceiling
(in millions)
(bbls)($/bbl)($/bbl)
2021NYMEX WTI0.4 $40.00 $49.20 
The effects of the change in fair value and settlement of QEP's derivative contracts recorded in "Realized and unrealized gains (losses) on derivative contracts" on the statements of operations are summarized in the following table:
Three Months EndedNine Months Ended
Derivative contractsSeptember 30,September 30,
202020192020
2019(1)
Realized gains (losses) on commodity derivative contracts(in millions)
Oil derivative contracts$70.3 $(4.9)$233.1 $(23.9)
Gas derivative contracts(0.7)— (0.5)(2.9)
Realized gains (losses) on commodity derivative contracts69.6 (4.9)232.6 (26.8)
Unrealized gains (losses) on commodity derivative contracts
Oil derivative contracts(91.7)92.3 105.0 (30.5)
Gas derivative contracts(12.1)— (20.6)(0.3)
Unrealized gains (losses) on commodity derivative contracts(103.8)92.3 84.4 (30.8)
Total realized and unrealized gains (losses) on commodity derivative contracts related to production$(34.2)$87.4 $317.0 $(57.6)
Derivatives associated with Haynesville Divestiture
Unrealized gains (losses) on commodity derivative contracts
Gas derivative contracts— — — 1.8 
Unrealized gains (losses) on commodity derivative contracts related to divestitures (1)
$— $— $— $1.8 
Total realized and unrealized gains (losses) on commodity derivative contracts$(34.2)$87.4 $317.0 $(55.8)
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(1)During the nine months ended September 30, 2019, the unrealized gains (losses) on commodity derivative contracts related to the Haynesville Divestiture were comprised of derivatives included as part of the Haynesville/Cotton Valley purchase and sale agreement, which were subsequently novated to the buyer upon the closing of the sale in January 2019. Refer to Note 3 – Acquisitions and Divestitures for more information. The unrealized gains (losses) on commodity derivatives associated with the Haynesville Divestiture are offset by an equal amount recorded within "Net gain (loss) from asset sales, inclusive of restructuring costs" on the statements of operations.