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EOG sees Q3 non-cash loss of $293.4M on mark-to-market derivative contracts

In a regulatory filing the company said: With the objective of enhancing the certainty of future revenues, from time to time EOG Resources enters into New York Mercantile Exchange, NYMEX, related financial price swap, option, swaption, collar and basis swap contracts. EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method. In addition to financial transactions, from time to time EOG is a party to various physical commodity contracts for the sale of hydrocarbons that cover varying periods of time and have varying pricing provisions. The financial impact of these physical commodity contracts is included in revenues at the time of settlement, which in turn affects average realized hydrocarbon prices. For the third quarter of 2013, EOG anticipates a non-cash loss of $293.4M on the mark-to-market of its crude oil and natural gas derivative contracts. During the third quarter of 2013, net cash outflow related to settled crude oil and natural gas derivative contracts was $20.6M.