12 unchanged sentences
Due to our improved liquidity and leverage position as compared to historical levels, the percentage of our expected production that we hedge has decreased.
−Removed: For the three and six months ended June 30, 2023 and 2024, substantially all of our production was unhedged.
+Added: For the three and nine months ended September 30, 2023 and 2024, substantially all of our production was unhedged.
Our financial hedging activities may include commodity fixed price swaps, basis swaps, collars or other similar instruments related to the price risk associated with our production.
These contracts are financial instruments and do not require or allow for physical delivery of the hedged commodity.
−Removed: As of June 30, 2024, our commodity derivatives included fixed swaps, basis differential
−Removed: swaps, call options and embedded put options at index-based pricing for a portion of our production.
+Added: As of September 30, 2024, our commodity derivatives included fixed swaps, basis differential swaps, call options and embedded put options at index-based pricing for a portion of our production.
See Note 11—Derivative Instruments to our unaudited condensed consolidated financial statements for more information.
2 unchanged sentences
These contracts are financial instruments and do not require or allow for physical delivery of the hedged commodity.
−Removed: Under the Prior Credit Facility, we are permitted to hedge up to 75% of our projected production for the next 60 months.
−Removed: 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 derivative instruments that settled during the six months ended June 30, 2024, our revenues would have decreased by $75 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, 2024.
+Added: Based on our production and our derivative instruments that settled during the nine months ended September 30, 2024, our revenues would have decreased by $113 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 September 30, 2024.
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.
2 unchanged sentences
therefore, all mark to market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations and comprehensive income.
−Removed: We present total gains or losses on commodity derivatives (for both settled derivatives and derivative positions which remain open) within operating revenues as “Commodity derivative fair value gains.”
+Added: We present total gains or losses on commodity derivatives (for both settled derivatives and derivative positions which remain open) within operating revenues as commodity derivative fair value gains (losses) in the unaudited condensed consolidated statements of operations and comprehensive income (loss).
Mark-to-market adjustments of derivative instruments cause earnings volatility but have no cash flow impact relative to changes in market prices until the derivative contracts are settled or monetized prior to settlement.
1 unchanged sentence
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, 2023 and June 30, 2024, the estimated fair value of our commodity derivative instruments was a net liability $37 million and $41 million, respectively, comprised of current and noncurrent assets and liabilities.
+Added: As of December 31, 2023 and September 30, 2024, the estimated fair value of our commodity derivative instruments was a net liability $37 million and $27 million, respectively, comprised of current and noncurrent assets and liabilities.
Counterparty and Customer Credit Risk
Our principal exposures to credit risk are through receivables resulting from the following:
−Removed: the sale of our natural gas, NGLs and oil production ($363 million as of June 30, 2024), which we market to energy companies, end users and refineries, and commodity derivative contracts ($6 million as of June 30, 2024).
+Added: the sale of our natural gas, NGLs and oil production ($319 million as of September 30, 2024), which we market to energy companies, end users and refineries, and commodity derivative contracts ($7 million as of September 30, 2024).
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.
4 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 deems to be competent and competitive market makers.
+Added: To minimize the credit risk in derivative
+Added: 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: As of June 30, 2024, we have commodity hedges in place with four different counterparties, three of which are lenders under the Prior Credit Facility.
−Removed: We did not have any derivative assets with bank counterparties under our Prior Credit Facility as of June 30, 2024.
−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 June 30, 2024.
−Removed: We believe that all of the counterparties to our derivative instruments are acceptable credit risks as of June 30, 2024.
−Removed: Other than as provided by the Prior Credit Facility, we are not required to provide credit support or collateral to any of our counterparties under our
−Removed: derivative contracts, nor are they required to provide credit support to us.
−Removed: As of June 30, 2024, we did not have any past-due receivables from, or payables to, any of the counterparties to our derivative contracts.
+Added: As of September 30, 2024, we have commodity hedges in place with four different counterparties, three of which are lenders under the Unsecured Credit Facility.
+Added: We had derivative assets of $3 million with bank counterparties under our Unsecured Credit Facility as of September 30, 2024.
+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 September 30, 2024.
+Added: We believe that all of the counterparties to our derivative instruments are acceptable credit risks as of September 30, 2024.
+Added: 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.
+Added: As of September 30, 2024, 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 Prior Credit Facility for borrowings during the six months ended June 30, 2024 was 7.71%.
−Removed: We estimate that a 1.0% increase in the applicable average interest rates for the six months ended June 30, 2024 would have resulted in an estimated $2 million increase in interest expense.
+Added: The average annualized interest rate incurred on the Credit Facility for borrowings during the nine months ended September 30, 2024 was 7.70%.
+Added: We estimate that a 1.0% increase in the applicable average interest rates for the nine months ended September 30, 2024 would have resulted in an estimated $3 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.