|
Derivative Commodity Instruments (Tables)
|
3 Months Ended |
|
Mar. 31, 2013
|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
|
| Schedule of Fair Values of Commodity Contracts by business Segment on Balance Sheet |
The following tables detail the fair values of commodity contracts by business segment on the balance sheets:
| | | | | | | | | | | | (in thousands) | March 31, 2013 | | Oil and Gas Operations | | Natural Gas Distribution |
Total | Derivative assets or (liabilities) designated as hedging instruments | | | | | Accounts receivable | $ | 51,277 |
| | $ | — |
| $ | 51,277 |
| Long-term asset derivative instruments | 25,921 |
| | — |
| 25,921 |
| Total derivative assets | 77,198 |
| | — |
| 77,198 |
| Accounts receivable | (36,245 | ) | * | — |
| (36,245 | ) | Long-term asset derivative instruments | (6,594 | ) | * | — |
| (6,594 | ) | Accounts payable | (11,983 | ) | | — |
| (11,983 | ) | Long-term liability derivative instruments | (7,275 | ) | | — |
| (7,275 | ) | Total derivative liabilities | (62,097 | ) | | — |
| (62,097 | ) | Total derivatives designated | 15,101 |
| | — |
| 15,101 |
| Derivative assets or (liabilities) not designated as hedging instruments | | | | | Accounts receivable | (4,342 | ) | * | — |
| (4,342 | ) | Long-term asset derivative instruments | 6,872 |
| | — |
| 6,872 |
| Total derivative assets | 2,530 |
| | — |
| 2,530 |
| Accounts payable | (20,816 | ) | | — |
| (20,816 | ) | Long-term liability derivative instruments | (1,074 | ) | | — |
| (1,074 | ) | Total derivative liabilities | (21,890 | ) | | — |
| (21,890 | ) | Total derivatives not designated | (19,360 | ) | | — |
| (19,360 | ) | Total derivatives | $ | (4,259 | ) | | $ | — |
| $ | (4,259 | ) |
| | | | | | | | | | | | (in thousands) | December 31, 2012 | | Oil and Gas Operations | | Natural Gas Distribution |
Total | Derivative assets or (liabilities) designated as hedging instruments | | | | | Accounts receivable | $ | 87,514 |
| | $ | — |
| $ | 87,514 |
| Long-term asset derivative instruments | 37,954 |
| | — |
| 37,954 |
| Total derivative assets | 125,468 |
| | — |
| 125,468 |
| Accounts receivable | (37,326 | ) | * | — |
| (37,326 | ) | Long-term asset derivative instruments | (6,810 | ) | * | — |
| (6,810 | ) | Long-term liability derivative instruments | (8,726 | ) | | — |
| (8,726 | ) | Total derivative liabilities | (52,862 | ) | | — |
| (52,862 | ) | Total derivatives designated | 72,606 |
| | — |
| 72,606 |
| Derivative assets or (liabilities) not designated as hedging instruments | | | | | Accounts receivable | 14,604 |
| | — |
| 14,604 |
| Long-term asset derivative instruments | 9,433 |
| | — |
| 9,433 |
| Total derivative assets | 24,037 |
| | — |
| 24,037 |
| Accounts payable | — |
| | (2,593 | ) | (2,593 | ) | Long-term liability derivative instruments | (874 | ) | | — |
| (874 | ) | Total derivative liabilities | (874 | ) | | (2,593 | ) | (3,467 | ) | Total derivatives not designated | 23,163 |
| | (2,593 | ) | 20,570 |
| Total derivatives | $ | 95,769 |
| | $ | (2,593 | ) | $ | 93,176 |
|
* Amounts classified in accordance with accounting guidance which permits offsetting fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement. |
| Schedule of Cash Flow Hedging Relationships on Financial Statements |
The following table details the effect of derivative commodity instruments in cash flow hedging relationships on the financial statements:
| | | | | | | | | (in thousands) | Location on Statement of Income | Three months
ended
March 31, 2013 | Three months
ended
March 31, 2012 | Loss recognized in OCI on derivatives (effective portion), net of tax of ($16.4) million and ($7.5) million | — | $ | (26,798 | ) | $ | (12,234 | ) | Gain reclassified from accumulated OCI into income (effective portion) | Operating revenues | $ | 17,824 |
| $ | 1,872 |
| Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing) | Operating revenues | $ | (534 | ) | $ | (2,666 | ) |
|
| Schedule of Derivatives Not Designated as Hedging Instruments on Income Statements |
The following table details the effect of open and closed derivative commodity instruments not designated as hedging instruments on the income statement:
| | | | | | | | | (in thousands) | Location on Statement of Income | Three months
ended
March 31, 2013 | Three months
ended
March 31, 2012 | Loss recognized in income on derivatives | Operating revenues | $ | (31,501 | ) | $ | (44,005 | ) |
|
| Schedule of Hedging Transactions |
Energen Resources entered into the following transactions for the remainder of 2013 and subsequent years:
| | | | | | Production Period | Total Hedged Volumes | Average Contract Price |
Description | Natural Gas | | | | 2013 | 9.4 | Bcf | $4.83 Mcf | NYMEX Swaps | | 24.4 | Bcf | $4.56 Mcf | Basin Specific Swaps - San Juan | | 3.4 | Bcf | $3.45 Mcf | Basin Specific Swaps - Permian | 2014 | 10.6 | Bcf | $4.55 Mcf | NYMEX Swaps | | 25.7 | Bcf | $4.72 Mcf | Basin Specific Swaps - San Juan | | 9.7 | Bcf | $3.81 Mcf | Basin Specific Swaps - Permian | Oil | | | | 2013 | 6,752 | MBbl | $90.99 Bbl | NYMEX Swaps | 2014 | 9,796 | MBbl | $92.64 Bbl | NYMEX Swaps | 2015 | 720 | MBbl | $90.10 Bbl | NYMEX Swaps | Oil Basis Differential | | | | 2013 | 2,701 | MBbl | $(3.02) Bbl | WTS/WTI Basis Swaps* | | 2,995 | MBbl | $(1.00) Bbl | WTI/WTI Basis Swaps** | Natural Gas Liquids | | | | 2013 | 33.9 | MMGal | $1.02 Gal | Liquids Swaps | *WTS - West Texas Sour/Midland, WTI - West Texas Intermediate/Cushing | | **WTI - West Texas Intermediate/Midland, WTI - West Texas Intermediate/Cushing | |
|
| Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis |
The following sets forth derivative assets and liabilities that were measured at fair value on a recurring basis:
| | | | | | | | | | | | March 31, 2013 | (in thousands) | Level 2* | Level 3* | Total | Current assets | $ | (12,452 | ) | $ | 23,142 |
| $ | 10,690 |
| Noncurrent assets | 12,194 |
| 14,005 |
| 26,199 |
| Current liabilities | (24,834 | ) | (7,965 | ) | (32,799 | ) | Noncurrent liabilities | (5,626 | ) | (2,723 | ) | (8,349 | ) | Net derivative asset (liability) | $ | (30,718 | ) | $ | 26,459 |
| $ | (4,259 | ) |
| | | | | | | | | | | | December 31, 2012 | (in thousands) | Level 2* | Level 3* | Total | Current assets | $ | (3,629 | ) | $ | 68,421 |
| $ | 64,792 |
| Noncurrent assets | 18,899 |
| 21,678 |
| 40,577 |
| Current liabilities | (2,593 | ) | — |
| (2,593 | ) | Noncurrent liabilities | (8,520 | ) | (1,080 | ) | (9,600 | ) | Net derivative asset | $ | 4,157 |
| $ | 89,019 |
| $ | 93,176 |
|
* Amounts classified in accordance with accounting guidance which permits offsetting fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement.
|
| Schedule of Changes in Fair Value of Derivative Instruments Classified as Level 3 |
The tables below set forth a summary of changes in the fair value of the Company’s Level 3 derivative commodity instruments as follows:
| | | | | | | | | Three months ended | Three months ended | (in thousands) | March 31, 2013 | March 31, 2012 | Balance at beginning of period | $ | 89,019 |
| $ | 65,801 |
| Realized gains | 27,107 |
| 13,181 |
| Unrealized gains (losses) relating to instruments held at the reporting date* | (63,482 | ) | 39,767 |
| Settlements during period | (26,185 | ) | (13,826 | ) | Balance at end of period | $ | 26,459 |
| $ | 104,923 |
|
|
| Schedule of Fair Value Inputs, Derivatives, Quantitative Information |
The tables below set forth quantitative information about the Company’s Level 3 fair value measurements of derivative commodity instruments as follows:
| | | | | | | | (in thousands) | Fair Value as of March 31, 2013 | Valuation Technique* | Unobservable Input* | Range | Natural Gas Basis - San Juan | | | | | 2013 | $ | 14,529 |
| Discounted Cash Flow | Forward Basis | ($0.14 - $0.16) Mcf | 2014 | $ | 16,066 |
| Discounted Cash Flow | Forward Basis | ($0.14 - $0.16) Mcf | Natural Gas Basis - Permian | | | | | 2013 | $ | (1,854 | ) | Discounted Cash Flow | Forward Basis | ($0.12) Mcf | 2014 | $ | (2,731 | ) | Discounted Cash Flow | Forward Basis | ($0.12 - $0.14) Mcf | Oil Basis - WTS/WTI | | | | | 2013 | $ | (6,209 | ) | Discounted Cash Flow | Forward Basis | ($0.66) Bbl | Oil Basis - WTI/WTI | | | | | 2013 | $ | (2,207 | ) | Discounted Cash Flow | Forward Basis | ($0.18 - $0.28) Bbl | Natural Gas Liquids | | | | | 2013 | $ | 8,865 |
| Discounted Cash Flow | Forward Price | $0.75 - $0.83 Gal |
*Discounted cash flow represents an income approach in calculating fair value including the referenced unobservable input and a discount reflecting credit quality of the counterparty. |
| Offsetting Assets and Liabilities |
The tables below set forth information about the offsetting of derivative assets and liabilities as follows:
| | | | | | | | | | | | | | | | | | | | | March 31, 2013 | | | | | Gross Amounts Not Offset in the Balance Sheets | | (in thousands) | Gross Amounts Recognized | Gross Amounts Offset in the Balance Sheets | Net Amount Presented in the Balance Sheets | Financial Instruments | Cash Collateral Received | Net Amount | Derivative assets | $ | 79,728 |
| $ | (42,839 | ) | $ | 36,889 |
| $ | — |
| $ | — |
| $ | 36,889 |
| Derivative liabilities | $ | 83,987 |
| $ | (42,839 | ) | $ | 41,148 |
| $ | — |
| $ | — |
| $ | 41,148 |
|
| | | | | | | | | | | | | | | | | | | | | December 31, 2012 | | | | | Gross Amounts Not Offset in the Balance Sheets | | (in thousands) | Gross Amounts Recognized | Gross Amounts Offset in the Balance Sheets | Net Amount Presented in the Balance Sheets | Financial Instruments | Cash Collateral Received | Net Amount | Derivative assets | $ | 149,504 |
| $ | (44,135 | ) | $ | 105,369 |
| $ | — |
| $ | — |
| $ | 105,369 |
| Derivative liabilities | $ | 56,328 |
| $ | (44,135 | ) | $ | 12,193 |
| $ | — |
| $ | — |
| $ | 12,193 |
|
|