Derivative Contracts (Tables)

6 Months Ended

Jun. 30, 2012

Commodity Derivatives as a Percentage of Reported Production

The following table details the percentage of reported production subject to commodity price derivative contracts for QEP Energy and QEP Field Services.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
QEP Energy
Natural gas derivative volumes as a percent of QEP Energy natural gas production
Fixed price swaps		67	%		46	%		63	%		44	%
Costless collars		0	%		12	%		0	%		12	%
Oil derivative volumes as a percent of QEP Energy oil production
Fixed price swaps		35	%		3	%		36	%		2	%
Costless collars		28	%		31	%		22	%		33	%
NGL derivative volumes as a percent of QEP Energy NGL production
Fixed price swaps		18	%		0	%		17	%		0	%
QEP Field Services
Ethane derivative volumes as a percent of ethane volumes - QEP Field Services
Fixed price swaps		15	%		0	%		27	%		0	%
Propane derivative volumes as a percent of propane volumes - QEP Field Services
Fixed price swaps		59	%		0	%		76	%		0	%

Derivative Volumes and Average Prices

The following table sets forth QEP Energy's volumes and average prices for its commodity derivative contracts as of June 30, 2012:

					Swaps		Collars
Year	Type of Contract	Index	Total Volumes		Average price per unit		Floor price		Ceiling price
			(in millions)
Natural gas sales			(MMBtu)
2012	Swap	NYMEX		39.9	$	4.66
2012	Swap	IFPEPL (1)		4.9	$	4.14
2012	Swap	IFNPCR (2)		45.4	$	4.61
2012	Swap	IFCNPTE (3)		5.5	$	2.66
2013	Swap	NYMEX		29.2	$	3.68
2013	Swap	IFNPCR (2)		65.7	$	5.66
Oil sales			(Bbls)
2012	Swap	NYMEX WTI		0.9	$	97.03
2012	Collar	NYMEX WTI		0.7			$	87.50	$	115.36
2013	Swap	NYMEX WTI		0.9	$	104.12
NGL sales			(Gals)
2012	Swap	Mt. Belvieu Ethane		7.7	$	0.64
2012	Swap	Mt. Belvieu Propane		11.6	$	1.28

(1)	Inside FERC monthly settlement index for the Panhandle Eastern Pipeline Company.

(2)	Inside FERC monthly settlement index for the Northwest Pipeline Corp. Rocky Mountains.

(3)	Inside FERC monthly settlement index for Centerpoint East.

QEP Field Services Derivative Contracts

QEP Field Services enters into commodity derivative transactions to manage price risk on extracted NGL volumes. The following table sets forth QEP Field Services' volumes and swap prices for its commodity derivative contracts as of June 30, 2012:

Year	Type of Contract	Index	Total Volumes		Average Swap price per gallon
			(in millions)
NGL sales			(Gals)
2012	Swap	Mt. Belvieu Ethane		7.7	$	0.64
2012	Swap	Mt. Belvieu Propane		3.9	$	1.28

QEP Marketing Derivative Contracts

QEP Marketing enters into commodity derivative transactions to lock in a margin on natural gas volumes placed into storage and for marketing transactions in which QEP Marketing is required to deliver gas volumes at a fixed price. The following table sets forth QEP Marketing's volumes and swap prices for its commodity derivative contracts as of June 30, 2012:

Year	Type of Contract	Index	Total Volumes		Average Swaps price per MMBtu
			(in millions)
Natural gas sales			(MMBtu)
2012	Swap	IFNPCR (1)		1.8	$	4.06
2013	Swap	IFNPCR (1)		1.2	$	4.57
Natural gas purchases			(MMBtu)
2012	Swap	IFNPCR (1)		0.7	$	2.97
2013	Swap	IFNPCR (1)		0.1	$	2.59

(1)

Inside FERC monthly settlement index for the Northwest Pipeline Corp. Rocky Mountains.

QEP Resources Derivative Contracts

In the second quarter of 2012, QEP Resources entered into interest rate swap agreements to effectively lock in a fixed interest rate on debt outstanding under its Term Loan.

The following table sets forth QEP Resources' notional amounts and interest rates for its interest rate swaps outstanding as of June 30, 2012:

Notional amount		Type of Contract	Maturity	Fixed Rate Paid		Variable Rate Received
(in millions)
	$300.0	Swap	March 2017		1.07%	One month LIBOR

Fair values of Derivatives by Balance Sheet Location

The following table presents the balance sheet location of QEP's outstanding derivative contracts on a gross contract basis as opposed to the net contract basis presentation in the Condensed Consolidated Balance Sheets and the related fair values at the balance sheet dates.

		Gross asset derivative instruments fair value					Gross liability derivative instruments fair value
	Balance Sheet line item	June 30, 2012		December 31, 2011		Balance Sheet line item	June 30, 2012		December 31, 2011
		(in millions)					(in millions)
Current:
Commodity	Fair value of derivative contracts	$	272.2	$	284.1	Fair value of derivative contracts	$	4.0	$	11.7
Interest rate swaps	Fair value of derivative contracts		-		-	Fair value of derivative contracts		2.3		-
Long-term:
Commodity	Fair value of derivative contracts		77.5		123.5	Fair value of derivative contracts		1.7		-
Interest rate swaps	Fair value of derivative contracts		-		-	Fair value of derivative contracts		2.0		-
Total derivative instruments		$	349.7	$	407.6		$	10.0	$	11.7

Effects of Derivative Transactions

The effects and location of derivative transactions on the Condensed Consolidated Statements of Income are summarized in the following tables.

		Three Months Ended						Six Months Ended
Derivative instruments not designated as	Location of gain (loss)	June 30,						June 30,
cash flow hedges	recognized in earnings	2012			2011			2012			2011
		(in millions)
Realized gain (loss) on commodity derivative contracts
QEP Energy
Natural gas derivative contracts		$	111.9		$	(27.6	)	$	197.6		$	(58.8	)
Oil derivative contracts			2.2			-			(0.5	)		-
NGL derivative contracts			2.7			-			3.1			-
QEP Field Services
NGL derivative contracts			3.3			-			4.4			-
QEP Marketing
Natural gas derivative contracts			0.6			-			4.1			-
Total realized gain (loss) on commodity derivative contracts			120.7			(27.6	)		208.7			(58.8	)
Unrealized gain (loss) on commodity derivative contracts
QEP Energy
Natural gas derivative contracts			(78.4	)		27.6			53.9			58.8
Oil derivative contracts			38.6			-			27.1			-
NGL derivative contracts			4.9			-			7.8			-
QEP Field Services
NGL derivative contracts			1.5			-			4.5			-
QEP Marketing
Natural gas derivative contracts			(0.7	)		-			0.9			-
Total unrealized (loss) gain on commodity derivative contracts			(34.1	)		27.6			94.2			58.8
Total realized and unrealized gain on commodity derivative contracts	Realized and unrealized gains on derivative contracts	$	86.6		$	-		$	302.9		$	-

Unrealized gain (loss) on interest rate swaps
Unrealized loss on interest rate swaps	Realized and unrealized gains on derivative contracts	$	(4.3	)	$	-		$	(4.3	)	$	-

			Three Months Ended				Six Months Ended
	Location of gain (loss)		June 30,				June 30,
Derivative instruments classified as cash flow hedges	recognized in earnings		2012		2011		2012		2011
Commodity derivatives			(in millions)
Gain on derivative instruments for the effective portion of hedge recognized in AOCI	Accumulated other comprehensive income	$	-	$	61.3	$	-	$	61.5
Gain reclassified from AOCI into income for effective portion of hedge	Natural gas sales		-		64.4		-		137.5
Gain reclassified from AOCI into income for effective portion of hedge	Oil sales		-		0.1		-		0.1
Gain reclassified from AOCI into income for effective portion of hedge	Marketing purchases		-		0.5		-		3.9
Gain recognized in income for the ineffective portion of hedges	Interest and other income		-		0.3		-		0.1

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References+ Details

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References+ Details