8 unchanged sentences
natural gas production and the prevailing worldwide price for oil.
−Removed: Pricing for natural gas, NGLs and oil has, historically, been volatile and unpredictable, and we expect this
−Removed: volatility to continue in the future.
+Added: Pricing for natural gas, NGLs and oil has, historically, been volatile and unpredictable, and we expect this volatility to continue in the future.
The prices we receive for our production depend on many factors outside of our control, including volatility in the differences between commodity prices at sales points and the applicable index price.
3 unchanged sentences
These contracts are financial instruments and do not require or allow for physical delivery of the hedged commodity.
−Removed: As of March 31, 2023, we had in place natural gas swaps and basis swaps, as well as a call option and embedded put option covering portions of our projected production.
+Added: As of June 30, 2023, we had in place natural gas swaps and basis swaps, as well as a call option and embedded put option covering portions of our projected production.
Substantially all of our derivative arrangements terminate by December 31, 2023.
−Removed: Our commodity hedge position as of March 31, 2023 is summarized in Note 11—Derivative Instruments to our unaudited condensed consolidated financial statements.
+Added: Our commodity hedge position as of June 30, 2023 is summarized in Note 11—Derivative Instruments to our unaudited condensed consolidated financial statements.
Under the 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.
−Removed: Based on our production and our fixed price swap contracts, call option and embedded put option that settled during the three months ended March 31, 2023, our revenues would have decreased by $36 million for each $0.10 decrease per MMBtu in natural gas prices and $1.00 decrease per Bbl in oil and NGLs prices, excluding the effects of changes in the fair value of our derivative positions which remain open as of March 31, 2023.
+Added: Based on our production and our fixed price swap contracts, call option and embedded put option that settled during the six months ended June 30, 2023, our revenues would have decreased by $73 million for each $0.10 decrease per MMBtu in natural gas prices and $1.00 decrease per Bbl in oil and NGLs prices, excluding the effects of changes in the fair value of our derivative positions which remain open as of June 30, 2023.
All derivative instruments, other than those that meet the normal purchase and normal sale scope exception or other derivative scope exceptions, are recorded at fair market value in accordance with GAAP and are included in our consolidated balance sheets as assets or liabilities.
6 unchanged sentences
Our cash flows are 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, 2022 and March 31, 2023, the estimated fair value of our commodity derivative instruments was a net liability$431 million and $89 million, respectively, comprised of current and noncurrent assets and liabilities.
+Added: As of December 31, 2022 and June 30, 2023, the estimated fair value of our commodity derivative instruments was a net liability $431 million and $84 million, respectively, comprised of current and noncurrent assets and liabilities.
Due to our improved liquidity and leverage position as compared to past levels, the percentage of our expected production that we hedge has decreased.
−Removed: For the three months ended March 31, 2022 and 2023, 36% and 2%, respectively, of our production was hedged through fixed price commodity swaps.
+Added: For the three and six months ended June 30, 2022, 34% and 35%, respectively, of our production was hedged through fixed price commodity swaps as compared to 1% and 2% for the three and six months ended
+Added: June 30, 2023, respectively.
Assuming our 2023 production is the same as our production in 2022, 1% of our production for 2023 will be hedged through fixed price commodity swaps.
1 unchanged sentence
Our principal exposures to credit risk are through receivables resulting from the following:
−Removed: the sale of our natural gas, NGLs and oil production ($364 million as of March 31, 2023), which we market to energy companies, end users and refineries, and commodity derivative contracts ($16 million as of March 31, 2023).
+Added: the sale of our natural gas, NGLs and oil production ($304 million as of June 30, 2023), which we market to energy companies, end users and refineries, and commodity derivative contracts ($11 million as of June 30, 2023).
We are subject to credit risk due to the concentration of our receivables from several significant customers for sales of natural gas, NGLs and oil.
−Removed: We generally do not require our customers to post collateral.
+Added: While we do at times require customers to post letters of credit or other credit support in connection with their obligations, we generally do not require our customers to post collateral.
The inability or failure of our significant customers to meet their obligations to us, or their insolvency or liquidation, may adversely affect our financial results.
2 unchanged sentences
When the fair value of a derivative contract is positive, the counterparty is expected to owe us, which creates credit risk.
−Removed: 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
−Removed: deems to be competent and competitive market makers.
+Added: 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.
We have commodity hedges in place with three different counterparties, one of which are lenders under the Credit Facility.
−Removed: As of March 31, 2023, substantially all of our derivative assets were with one counterparty that is not affiliated with our Credit Facility.
−Removed: 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 March 31, 2023 for each of the European and American banks.
+Added: As of June 30, 2023, substantially all of our derivative assets were with one counterparty that is not affiliated with our Credit Facility.
+Added: 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 June 30, 2023 for each of the European and American banks.
We believe that all of our counterparties currently are acceptable credit risks.
Other than as provided by the Credit Facility, we are not required to provide credit support or collateral to any of our counterparties under our derivative contracts, nor are they required to provide credit support to us.
−Removed: As of March 31, 2023, we did not have any past-due receivables from, or payables to, any of the counterparties to our derivative contracts.
+Added: As of June 30, 2023, we did not have any past-due receivables from, or payables to, any of the counterparties to our derivative contracts.
Interest Rate Risks
Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which has a floating interest rate.
−Removed: The average annualized interest rate incurred on the Credit Facility for borrowings during the three months ended March 31, 2023 was 6.78%.
−Removed: We estimate that a 1.0% increase in the applicable average interest rates for the three months ended March 31, 2023 would have resulted in an estimated $0.4 million increase in interest expense.
+Added: The average annualized interest rate incurred on the Credit Facility for borrowings during the six months ended June 30, 2023 was 7.17%.
+Added: We estimate that a 1.0% increase in the applicable average interest rates for the six months ended June 30, 2023 would have resulted in an estimated $1.1 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.