SWN » Topics » Hedge Position

These excerpts taken from the SWN 10-K filed Feb 26, 2009.

Hedge Position


At December 31, 2008, the Company had outstanding natural gas price swaps on total notional volumes of 77.3 Bcf in 2009 and 36.0 Bcf in 2010 for which the Company will receive fixed prices ranging from $7.29 to $14.27 per MMBtu. At December 31, 2008, the Company also had outstanding fair value hedges on total notional volumes of 0.7 Bcf in 2009 and 0.2 in 2010 for which the Company will pay an average fixed price of $9.10 per MMBtu.  At December 31, 2008, the Company had outstanding fixed price basis differential swaps on 50.0 Bcf of 2009, 32.0 Bcf of 2010 and 7.2 Bcf of 2011 gas production that did not qualify for hedge treatment.  


At December 31, 2008, the Company had collars in place on notional volumes of 59.0 Bcf in 2009 and 14.0 Bcf in 2010. The 59.0 Bcf in 2009 had an average floor and ceiling price of $8.71 and $11.69 per MMBtu, respectively. The 14.0 Bcf in 2010 had an average floor and ceiling price of $8.29 and $10.57 per MMBtu, respectively.  The Company’s price risk management activities reduced revenues by $40.5 million in 2008 and increased revenues by $70.7 million in 2007 and $8.7 million in 2006.


The primary market risks related to the Company’s derivative contracts are the volatility in commodity prices, basis differentials and interest rates. However, these market risks are offset by the gain or loss recognized upon the related sale or purchase of the natural gas or sale of oil that is hedged, and payment of variable rate interest. Credit risk relates to the risk of loss as a result of non-performance by the Company’s counterparties. The Company utilizes counterparties for its derivative instruments that it believes are credit-worthy entities at the time the transactions are entered into and continually monitors the credit ratings of these counterparties. Additionally, the Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. However, the recent events in the financial markets demonstrate there can be no assurance that a counterparty financial institution will be able to meet its obligations to the Company. The Company has not incurred any credit-related losses in 2008 associated with its derivative activities and believes that its counterparties will continue to be able to meet their obligations under these transactions.


Hedge Position




At December 31, 2008,
the Company had outstanding natural gas price swaps on total notional volumes of
77.3 Bcf in 2009 and 36.0 Bcf in 2010 for which the Company will receive fixed
prices ranging from $7.29 to $14.27 per MMBtu. At December 31, 2008, the Company
also had outstanding fair value hedges on total notional volumes of 0.7 Bcf in
2009 and 0.2 in 2010 for which the Company will pay an average fixed price of
$9.10 per MMBtu.  At December 31, 2008, the Company had outstanding fixed
price basis differential swaps on 50.0 Bcf of 2009, 32.0 Bcf of 2010 and 7.2 Bcf
of 2011 gas production that did not qualify for hedge treatment.  




At December 31, 2008,
the Company had collars in place on notional volumes of 59.0 Bcf in 2009 and
14.0 Bcf in 2010. The 59.0 Bcf in 2009 had an average floor and ceiling price of
$8.71 and $11.69 per MMBtu, respectively. The 14.0 Bcf in 2010 had an average
floor and ceiling price of $8.29 and $10.57 per MMBtu, respectively.  The
Company’s price risk management activities reduced revenues by $40.5 million in
2008 and increased revenues by $70.7 million in 2007 and $8.7 million in
2006.




The primary market risks
related to the Company’s derivative contracts are the volatility in commodity
prices, basis differentials and interest rates. However, these market risks are
offset by the gain or loss recognized upon the related sale or purchase of the
natural gas or sale of oil that is hedged, and payment of variable rate
interest. Credit risk relates to the risk of loss as a result of non-performance
by the Company’s counterparties. The Company utilizes counterparties for its
derivative instruments that it believes are credit-worthy entities at the time
the transactions are entered into and continually monitors the credit ratings of
these counterparties. Additionally, the Company performs both quantitative and
qualitative assessments of these counterparties based on their credit ratings
and credit default swap rates where applicable. However, the recent events in
the financial markets demonstrate there can be no assurance that a counterparty
financial institution will be able to meet its obligations to the Company. The
Company has not incurred any credit-related losses in 2008 associated with its
derivative activities and believes that its counterparties will continue to be
able to meet their obligations under these transactions.




These excerpts taken from the SWN 10-K filed Feb 28, 2008.

Hedge Position


At December 31, 2007, the Company had outstanding natural gas price swaps on total notional volumes of 55.7 Bcf in 2008 and 56.0 Bcf in 2009 for which the Company will receive fixed prices ranging from $7.29 to $9.98 per MMBtu. At December 31, 2007, the Company also had outstanding natural gas price swaps on total notional volumes of 0.7 Bcf in 2008 for which the Company will pay an average fixed price of $7.37 per Mcf.  At December 31, 2007, the Company had outstanding fixed price basis differential swaps on 66.8 Bcf of 2008 and 2009 gas production that did not qualify for hedge treatment.  


At December 31, 2007, the Company had collars in place on notional volumes of 48.0 Bcf in 2008, and 23.0 Bcf in 2009. The 48.0 Bcf in 2008 had an average floor and ceiling price of $7.92 and $11.60 per MMBtu, respectively. The 23.0 Bcf in 2009 had an average floor and ceiling price of $8.09 and $10.91 per MMBtu, respectively.  The Company’s price risk management activities increased revenues by $70.7 million in 2007, $8.7 million in 2006 and reduced revenues by $77.2 million in 2005.




79 SWN


Table of Contents

 


The primary market risks related to the Company’s derivative contracts are the volatility in commodity prices, basis differentials and interest rates. However, these market risks are offset by the gain or loss recognized upon the related sale or purchase of the natural gas or sale of oil that is hedged, and payment of variable rate interest. Credit risk relates to the risk of loss as a result of non-performance by the Company’s counterparties. The counterparties are primarily major investment and commercial banks which management believes present minimal credit risks. The credit quality of each counterparty and the level of financial exposure the Company has to each counterparty are periodically reviewed to ensure limited credit risk exposure.


Hedge Position




At December 31, 2007, the Company had outstanding natural gas price swaps on total notional volumes of 55.7 Bcf in 2008 and 56.0 Bcf in 2009 for which the Company will receive fixed prices ranging from $7.29 to $9.98 per MMBtu. At December 31, 2007, the Company also had outstanding natural gas price swaps on total notional volumes of 0.7 Bcf in 2008 for which the Company will pay an average fixed price of $7.37 per Mcf.  At December 31, 2007, the Company had outstanding fixed price basis differential swaps on 66.8 Bcf of 2008 and 2009 gas production that did not qualify for hedge treatment.  




At December 31, 2007, the Company had collars in place on notional volumes of 48.0 Bcf in 2008, and 23.0 Bcf in 2009. The 48.0 Bcf in 2008 had an average floor and ceiling price of $7.92 and $11.60 per MMBtu, respectively. The 23.0 Bcf in 2009 had an average floor and ceiling price of $8.09 and $10.91 per MMBtu, respectively.  The Company’s price risk management activities increased revenues by $70.7 million in 2007, $8.7 million in 2006 and reduced revenues by $77.2 million in 2005.








79 SWN




Table of Contents


 




The primary market risks related to the Company’s derivative contracts are the volatility in commodity prices, basis differentials and interest rates. However, these market risks are offset by the gain or loss recognized upon the related sale or purchase of the natural gas or sale of oil that is hedged, and payment of variable rate interest. Credit risk relates to the risk of loss as a result of non-performance by the Company’s counterparties. The counterparties are primarily major investment and commercial banks which management believes present minimal credit risks. The credit quality of each counterparty and the level of financial exposure the Company has to each counterparty are periodically reviewed to ensure limited credit risk exposure.




This excerpt taken from the SWN 10-K filed Mar 1, 2007.

Hedge Position


At December 31, 2006, the Company had outstanding natural gas price swaps on total notional volumes of 32.5 Bcf in 2007 and 13.0 Bcf in 2008 for which the Company will receive fixed prices ranging from $6.20 to $12.06 per MMBtu. At December 31, 2006, the Company also had outstanding natural gas price swaps on total notional volumes of 0.2 Bcf in 2007 for which the Company will pay an average fixed price of $7.61 per Mcf.  At December 31, 2006, the Company had outstanding fixed price basis differential swaps on 62.0 Bcf of 2007 and 2008 gas production that did not qualify for hedge treatment.  


At December 31, 2006, the Company had collars in place on notional volumes of 34.0 Bcf in 2007, and 22.0 Bcf in 2008. The 34.0 Bcf in 2007 had an average floor and ceiling price of $6.93 and $12.34 per MMBtu, respectively. The 22.0 Bcf in 2008 had an average floor and ceiling price of $7.92 and $13.15 per MMBtu, respectively.  The Company’s price risk management activities increased revenues by $8.7 million in 2006, and reduced revenues by $77.2 million in 2005 and $35.6 million in 2004.


The primary market risks related to the Company’s derivative contracts are the volatility in commodity prices, basis differentials and interest rates. However, these market risks are offset by the gain or loss recognized upon the related sale or purchase of the natural gas or sale of oil that is hedged, and payment of variable rate interest. Credit risk relates to the risk of loss as a result of non-performance by the Company’s counterparties. The counterparties are primarily major investment and commercial banks which management believes present minimal credit risks. The credit quality of each counterparty and the level of financial exposure the Company has to each counterparty are periodically reviewed to ensure limited credit risk exposure.



79 SWN


Table of Contents

 


"Hedge Position" elsewhere:

Energen (EGN)
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki