Excellent paper from Sempra Energy Trading on hedge strategies.
Bottom line - The swaps we see in BBEP or others are essentially forward sales of the commodity at an agreed upon price.
Similar effect to a put purchase, but no commissions involved in the transaction. The unrealized gains/losses reported are the difference between the preagreed swap price and the market price at expiration of the contract.
As Ruth previously stated, an opportunity loss as opposed to an actual cash loss. CJ