EOG Resources, Inc. (EOG, Financial) has released a report detailing its financial commodity derivative contracts and market realizations for the fourth quarter of 2024. The company aims to enhance the certainty of future revenues and cash flows through strategic financial instruments such as price swaps, options, swaptions, collars, and basis swap contracts. These are collectively referred to as Financial Commodity Derivative Contracts and are accounted for using the mark-to-market accounting method.
During the fourth quarter of 2024, EOG received net cash of $19 million from settlements of these contracts. However, no cash was received from the Brent-linked Sales Agreement, as deliveries are anticipated to commence in January 2027. The report highlights that the average price for West Texas Intermediate crude oil was $70.28 per barrel, while natural gas at Henry Hub averaged $2.79 per million British thermal units. EOG’s actual realizations for crude oil and natural gas differed from these averages due to factors such as delivery location, quality, and revenue adjustments.
The company also noted that its realizations for natural gas liquids (NGLs) are influenced by the components extracted, including ethane, propane, butane, and natural gasoline, and the respective market pricing for each component. EOG’s forward-looking statements emphasize its strategic goals, including increasing reserves, production, and returns, while managing costs and capital expenditures effectively.
Value investors and stakeholders are encouraged to consider EOG’s strategic financial management and market performance as part of their investment analysis. For more detailed insights and updates, visit GuruFocus.com.
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