13 unchanged sentences
These contracts may include commodity price swaps whereby we will receive a fixed price and pay a variable market price to the contract counterparty, collars that set a floor and ceiling price for the hedged production, or basis differential swaps.
−Removed: These contracts are financial instruments, and do not require or allow for physical
−Removed: delivery of the hedged commodity.
−Removed: As of December 31, 2020, our commodity derivatives included fixed price swaps and basis differential swaps at index-based pricing.
−Removed: As of December 31, 2020, we had in place natural gas swaps covering portions of our projected production through 2024.
+Added: These contracts are financial instruments and do not require or allow for physical delivery of the hedged commodity.
+Added: As of December 31, 2021, our commodity derivatives included fixed price swaps, swaptions and basis differential swaps at index-based pricing.
+Added: As of December 31, 2021, we had in place natural gas swaps, basis swaps and a swaption covering portions of our projected production through 2024.
Our commodity hedge position as of December 31, 2021 is summarized in Note 12—Derivative Instruments to our consolidated financial statements.
−Removed: Under the Credit Facility, we are permitted to hedge up to 75% of our projected production for the next 60 months.
+Added: Under the New Credit Facility, we are permitted to hedge up to 75% of our projected production for the next 60 months.
We may enter into hedge contracts with a term greater than 60 months, and for no longer than 72 months, for up to 65% of our estimated production.
8 unchanged sentences
Our cash flows are only impacted when the associated derivative contracts are settled or monetized by making or receiving payments to or from the counterparty.
−Removed: As of December 31, 2020, the estimated fair value of our commodity derivative instruments was a net asset of $22 million, comprised of current and noncurrent assets and liabilities.
+Added: As of December 31, 2021, the estimated fair value of our commodity derivative instruments was a net liability of $727 million, comprised of current and noncurrent assets and liabilities.
As of December 31, 2020, the estimated fair value of our commodity derivative instruments was a net asset of $22 million, comprised of current and noncurrent assets and current liabilities.
6 unchanged sentences
Credit risk is the potential failure of a counterparty to perform under the terms of a derivative contract.
−Removed: When the fair value of a derivative contract is positive, the counterparty is expected to owe us, which creates credit risk.
+Added: When the fair value of a derivative contract is positive, the counterparty is expected to owe us, which
+Added: creates credit risk.
To minimize the credit risk in derivative instruments, it is our policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions that management deems to be competent and competitive market makers.
The creditworthiness of our counterparties is subject to periodic review.
−Removed: We have commodity hedges in place with 17 different counterparties, 13 of which are lenders under the Credit Facility.
−Removed: The fair value of our commodity net derivative contracts of approximately $22 million as of December 31, 2020 included the following net derivative assets by bank counterparty:
−Removed: Morgan Stanley - $35 million;
−Removed: Canadian Imperial Bank of Commerce - $25 million;
−Removed: Scotiabank - $14 million;
−Removed: Natixis - $5 million;
−Removed: DNB Capital - $2 million;
−Removed: and Truist $1 million.
+Added: We have commodity hedges in place with 10 different counterparties, 6 of which are lenders under the New Credit Facility.
+Added: As of December 31, 2021, we did not have any derivative assets with bank counterparties under our New Credit Facility.
The estimated fair value of our commodity derivative assets has been risk adjusted using a discount rate based upon the counterparties’ respective published credit default swap rates (if available, or if not available, a discount rate based on the applicable Reuters bond rating) as of December 31, 2021 for each of the European and American banks.
7 unchanged sentences
Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which has a floating interest rate.
−Removed: The average annual interest rate incurred on the Credit Facility during the year ended December 31, 2020 was approximately 3.24%.
+Added: As of December 31, 2021, we had no outstanding borrowings on our Credit Facility.
+Added: The average annualized interest rate incurred on the Credit Facility for borrowings during the year ended December 31, 2021 was approximately 4.6%.
We estimate that a 1.0% increase in the applicable average interest rates for the year ended December 31, 2021 would have resulted in an estimated $2 million increase in interest expense.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.