EOG Resources, Inc. (EOG, Financial) has released a Form 8-K report detailing its financial commodity derivative contracts and market conditions for the third quarter of 2024. The company aims to enhance the certainty of future revenues and cash flows through strategic financial management.
In the third quarter, EOG received net cash of $61 million from settlements of its financial commodity derivative contracts. These contracts include financial price swaps, options, swaptions, collars, and basis swaps, all accounted for using the mark-to-market accounting method. Additionally, EOG has a 10-year natural gas sales agreement linked to Brent crude oil prices, also accounted for using the mark-to-market method, with deliveries expected to commence in January 2027.
During the quarter ended September 30, 2024, the U.S. New York Mercantile Exchange (NYMEX) reported an average price of $75.16 per barrel for West Texas Intermediate crude oil and $2.16 per million British thermal units for natural gas at Henry Hub. EOG's actual realizations for crude oil and natural gas differed from these NYMEX prices due to factors such as delivery location, quality, and revenue adjustments. The company's realizations for natural gas liquids (NGLs) were influenced by the components extracted, including ethane, propane, butane, and natural gasoline, and their respective market pricing.
EOG's report also includes forward-looking statements regarding its future financial position, operations, and business strategy. These statements cover a range of topics, including commodity prices, production levels, capital expenditures, and environmental, social, and governance (ESG) initiatives. The company emphasizes the inherent uncertainties in these projections, influenced by factors such as market demand, regulatory changes, and geopolitical conditions.
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