Quarterly report pursuant to Section 13 or 15(d)

Derivative Instruments (Tables)

v3.5.0.2
Derivative Instruments (Tables)
6 Months Ended
Jun. 30, 2016
Schedule of outstanding commodity derivatives

As of June 30, 2016, the Company’s fixed price natural gas and NGLs swap contracts under short positions from July 1, 2016 through December 31, 2022 were as follows (abbreviations in the table refer to the index to which the swap position is tied, as follows: TCO=Columbia Gas Transmission; NYMEX=Henry Hub; CGTLA=Columbia Gas Louisiana Onshore; CCG=Chicago City Gate; Mont Belvieu-TET=Mont Belvieu Propane):

 

 

 

 

 

 

 

 

 

 

 

Natural gas
MMbtu/day

 

Propane
Bbls/day

 

Weighted
average index
price

 

Three months ending September 30, 2016:

 

 

 

 

 

 

 

 

TCO ($/MMBtu)

 

60,000

 

 —

 

$

4.81

 

Dominion South ($/MMBtu)

 

272,500

 

 —

 

$

5.24

 

NYMEX ($/MMBtu)

 

1,110,000

 

 —

 

$

3.44

 

CGTLA ($/MMBtu)

 

170,000

 

 —

 

$

4.03

 

Mont Belvieu-TET ($/Gallon)

 

 —

 

30,000

 

$

0.58

 

Total

 

1,612,500

 

30,000

 

 

 

 

Three months ending December 31, 2016:

 

 

 

 

 

 

 

 

TCO ($/MMBtu)

 

60,000

 

 —

 

$

5.01

 

Dominion South ($/MMBtu)

 

272,500

 

 —

 

$

5.47

 

NYMEX ($/MMBtu)

 

1,110,000

 

 —

 

$

3.57

 

CGTLA ($/MMBtu)

 

170,000

 

 —

 

$

4.20

 

Mont Belvieu-TET ($/Gallon)

 

 —

 

30,000

 

$

0.61

 

Total

 

1,612,500

 

30,000

 

 

 

 

Year ending December 31, 2017:

 

 

 

 

 

 

 

 

NYMEX ($/MMBtu)

 

1,370,000

 

 —

 

$

3.39

 

CGTLA ($/MMBtu)

 

420,000

 

 —

 

$

4.27

 

CCG ($/MMBtu)

 

70,000

 

 —

 

$

4.57

 

Mont Belvieu-TET ($/Gallon)

 

 —

 

31,500

 

$

0.42

 

Total

 

1,860,000

 

31,500

 

 

 

 

Year ending December 31, 2018:

 

 

 

 

 

 

 

 

NYMEX ($/MMBtu)

 

2,002,500

 

 —

 

$

3.91

 

Mont Belvieu-TET ($/Gallon)

 

 —

 

2,000

 

$

0.65

 

Total

 

2,002,500

 

2,000

 

 

 

 

Year ending December 31, 2019:

 

 

 

 

 

 

 

 

NYMEX ($/MMBtu)

 

2,330,000

 

 

 

$

3.70

 

Year ending December 31, 2020:

 

 

 

 

 

 

 

 

NYMEX ($/MMBtu)

 

1,377,500

 

 

 

$

3.66

 

Year ending December 31, 2021:

 

 

 

 

 

 

 

 

NYMEX ($/MMBtu)

 

630,000

 

 

 

$

3.36

 

Year ending December 31, 2022:

 

 

 

 

 

 

 

 

NYMEX ($/MMBtu)

 

120,000

 

 

 

$

3.24

 

 

Summary of the fair values of derivative instruments, which are not designated as hedges for accounting purposes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

 

June 30, 2016

 

 

 

Balance sheet
location

    

Fair value

 

Balance sheet
location

 

Fair value

 

 

 

 

 

(In thousands)

 

 

 

(In thousands)

 

Asset derivatives not designated as hedges for accounting purposes:

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

Current assets

 

$

1,009,030

 

Current assets

 

$

429,920

 

Commodity contracts

 

Long-term assets

 

 

2,108,450

 

Long-term assets

 

 

1,673,907

 

 

 

 

 

 

 

 

 

 

 

 

 

Total asset derivatives

 

 

 

 

3,117,480

 

 

 

 

2,103,827

 

 

 

 

 

 

 

 

 

 

 

 

 

Liability derivatives not designated as hedges for accounting purposes:

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

Current liabilities

 

 

 —

 

Current liabilities

 

 

2,726

 

Commodity contracts

 

Long-term liabilities

 

 

 —

 

Long-term liabilities

 

 

5,179

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liability derivatives

 

 

 

 

 —

 

 

 

 

7,905

 

 

 

 

 

 

 

 

 

 

 

 

 

Net derivatives

 

 

 

$

3,117,480

 

 

 

$

2,095,922

 

 

Schedule of gross amounts of recognized derivative assets and liabilities, the amounts offset under netting arrangements with counterparties, and the resulting net amounts

The following table presents the gross amounts of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties, and the resulting net amounts presented in the consolidated balance sheets as of the dates presented, all at fair value (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

 

June 30, 2016

 

 

 

Gross
amounts on
balance sheet

 

Gross amounts
offset on
balance sheet

 

Net amounts

of assets on

balance sheet

 

Gross
amounts on
balance sheet

 

Gross amounts
offset on
balance sheet

 

Net amounts

of assets (liabilities) on

balance sheet

 

Commodity derivative assets

 

$

3,163,639

 

 

(46,159)

 

 

3,117,480

 

$

2,303,100

 

 

(199,273)

 

 

2,103,827

 

Commodity derivative liabilities

 

$

 —

 

 

 —

 

 

 —

 

$

(8,308)

 

 

403

 

 

(7,905)

 

 

Summary of derivative fair value gains (losses)

The following is a summary of derivative fair value gains and where such values are recorded in the condensed consolidated statements of operations for three and six months ended June 30, 2015 and 2016 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of
operations

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

location

 

2015

 

2016

 

2015

 

2016

 

Commodity derivative fair value gains (losses)

 

Revenue

 

$

(2,227)

 

 

(684,634)

 

$

757,327

 

 

(404,710)

 

 

TCOminusNYMEX  
Tabular disclosure of commodity derivatives basis differential positions which settle on the pricing index to basis differential of Columbia Gas (TCO) to the NYMEX Henry Hub natural gas price.

 

 

 

 

 

 

 

 

 

Natural gas
MMbtu/day

 

Hedged
Differential

 

 

 

 

 

 

 

 

Six months ending December 31, 2016:

 

290,000

 

$

(0.45)

 

 

 

 

 

 

 

 

Year ending December 31, 2017:

 

125,000

 

$

(0.49)

 

 

NYMEXminusTCO  
Tabular disclosure of commodity derivatives basis differential positions which settle on the pricing index to basis differential of NYMEX Henry Hub to the Columbia Gas (TCO) natural gas price

 

 

 

 

 

 

 

 

 

Natural gas
MMbtu/day

 

Hedged
Differential

 

 

 

 

 

 

 

 

Six months ending December 31, 2016:

 

170,000

 

$

0.34

 

 

 

 

 

 

 

 

Year ending December 31, 2017:

 

125,000

 

$

0.30