Chesapeake Energy 2013 Annual Report Download - page 73

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65
Weighted Average Price Fair Value
Volume Fixed Call Put Differential Asset
(Liability)
(mmbbl) ($ per bbl) ($ in millions)
Oil:
Swaps:
Short-term ................ 24.6 93.92 — — — $ (50)
Long-term................. 0.7 89.47 — — — —
Call Options (sold):
Short-term ................ 13.4 — 96.11 — — (66)
Long-term................. 48.9 — 100.26 — — (180)
Call Options (bought)(b):
Short-term ................ (10.9)— 98.97 — — (14)
Long-term................. (8.9) — 113.54 — — (5)
Basis Protection Swaps:
Short-term................ 0.4 —— — 6.00 1
Total Oil ...................................................................................................... $ (314)
Total Natural Gas and Oil .......................................................................... $ (551)
___________________________________________
(a) Included in the fair value are deferred premiums of $40 million, $82 million and $85 million which will be included
in natural gas, oil and NGL sales as realized gains (losses) in 2014, 2015 and 2016, respectively.
(b) Included in the fair value are deferred premiums of $46 million and $13 million which will be included in natural
gas, oil and NGL sales as realized gains (losses) in 2014 and 2015, respectively.
In addition to the open derivative positions disclosed above, as of December 31, 2013, we had $58 million of net
derivative gains related to settled contracts for future production periods that will be recorded within natural gas, oil
and NGL sales as realized gains (losses) on derivatives as they are transferred from either accumulated other
comprehensive income or unrealized gains (losses) on derivatives in the month of related production based on the
terms specified in the original contract as noted below.
December 31,
2013
($ in millions)
2014 ............................................................................................................................................. $ (174)
2015 ............................................................................................................................................. 216
2016 – 2022 ................................................................................................................................. 16
Total ....................................................................................................................................... $ 58
The table below reconciles the changes in fair value of our natural gas and oil derivatives during each of the
years ended December 31, 2013, 2012 and 2011. Of the $551 million fair value liability as of December 31, 2013, $200
million related to contracts maturing in the next 12 months and $351 million related to contracts maturing after 12
months. All open derivative instruments as of December 31, 2013 are expected to mature by December 31, 2022.
December 31,
2013
($ in millions)
Fair value of contracts outstanding, as of January 1 ...................................................................... $ (924)
Change in fair value of contracts ............................................................................................... 218
Fair value of new contracts when entered into .......................................................................... (48)
Contracts realized or otherwise settled ...................................................................................... 203
Fair value of contracts when closed .......................................................................................... —
Fair value of contracts outstanding, as of December 31 ................................................................ $ (551)