This excerpt taken from the DVN 10-K filed Feb 28, 2007.
Oil and Natural Gas Marketing
The spot market for oil and gas is subject to volatility as supply and demand factors fluctuate. We may periodically enter into financial hedging arrangements, fixed-price contracts or firm delivery commitments with a portion of our oil and gas production. These activities are intended to support targeted price levels and to manage our exposure to price fluctuations. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Our oil production is sold under both long-term (one year or more) and short-term (less than one year) agreements at prices negotiated with third parties. All of our oil production is sold at variable or market-sensitive prices.
Natural Gas Marketing
Our gas production is also sold under both long-term and short-term agreements at prices negotiated with third parties. Although exact percentages vary daily, as of February 2007, approximately 75% of our natural gas production was sold under short-term contracts at variable or market-sensitive prices. These market-sensitive sales are referred to as spot market sales. Another 23% of our production was committed under various long-term contracts which dedicate the natural gas to a purchaser for an extended period of time but still at market sensitive prices. Our remaining gas production was sold under long-term fixed price contracts.