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Derivatives
 3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
The Company has two types of derivative instruments as of March 31, 2020: (i) sales volumes commodity derivatives ("Commodity") and (ii) contingent consideration derivative ("Contingent consideration"). For further discussion, see Note 10.a for fair value measurement on a recurring basis. See Note 18.b for discussion of the derivatives entered into subsequent to March 31, 2020.
a.    Commodity
Due to the inherent volatility in oil, NGL and natural gas prices and differences in the prices of oil, NGL and natural gas between where the Company produces and where the Company sells such commodities, the Company engages in commodity derivative transactions, such as puts, swaps, collars and basis swaps to hedge price risk associated with a portion of the Company's anticipated sales volumes. By removing a portion of the price volatility associated with future sales volumes, the Company expects to mitigate, but not eliminate, the potential effects of variability in cash flows from operations. See Notes 2.f and 9 in the 2019 Annual Report for discussion of the Company's significant accounting policies for derivatives and information on the transaction types and settlement indexes, respectively. The Brent ICE to WTI NYMEX basis swaps, which the Company entered into in the first quarter of 2020, are settled based on the differential between the basis swaps' fixed
differential as compared to the differential between the arithmetic average of each day's index prices for the first nearby month on the pricing dates in each calculation period, for only days when both indices settle, with the index prices being (i) the ICE Brent Crude Oil Futures Contract except for the last day of trading for the applicable expiring Brent Crude Oil Futures Contract whereby the second nearby month of the Brent Crude Oil Futures Contract settlement price will be used and (ii) the NYMEX West Texas Intermediate Light Sweet Crude Oil Futures Contract.
In regards to the Company's basis swaps, when the settlement basis differential is below the fixed basis differential, the counterparty pays the Company an amount equal to the difference between the fixed basis differential and the settlement basis differential multiplied by the hedged contract volume. When the settlement basis differential is above the fixed basis differential, the Company pays the counterparty an amount equal to the difference between the settlement basis differential and the fixed basis differential multiplied by the hedged contract volume.
During the three months ended March 31, 2020, the Company completed a hedge restructuring by early terminating collars and entering into new swaps.
The following table details the commodity derivatives that were terminated:
 
 
Aggregate volumes (Bbl)
 
Floor price ($/Bbl)
 
Ceiling price ($/Bbl)
 
Contract period
WTI NYMEX - Collars
 
912,500

 
$
45.00

 
$
71.00

 
January 2021 - December 2021

b.    Contingent consideration
See Note 3.b for discussion of the circumstances surrounding the contingent consideration and Note 10.a for the associated fair value as of March 31, 2020. At each quarterly reporting period, the Company remeasures the contingent consideration with the changes in fair value recognized in earnings.

















c.    Open commodity derivative positions
The following table summarizes open commodity derivative positions as of March 31, 2020, for commodity derivatives that were entered into through March 31, 2020, for the settlement periods presented:
 
 
Remaining year 2020
 
Year 2021
Oil:
 
 
 
 

WTI NYMEX - Swaps:
 
 

 
 

Volume (Bbl)
 
5,390,000

 
—

Weighted-average price ($/Bbl)
 
$
59.50

 
$
—

Brent ICE:
 
 

 
 

Swaps:
 
 
 
 
Volume (Bbl)
 
1,787,500

 
1,825,000

Weighted-average price ($/Bbl)
 
$
63.07

 
$
60.13

Collars:
 
 

 
 

Volume (Bbl)
 
—

 
584,000

Weighted-average floor price ($/Bbl)
 
$
—

 
$
45.00

Weighted-average ceiling price ($/Bbl)
 
$
—

 
$
59.50

Total Brent ICE:
 
 
 
 
Total volume (Bbl)
 
1,787,500

 
2,409,000

Weighted-average floor price ($/Bbl)
 
$
63.07

 
$
56.46

Weighted-average ceiling price ($/Bbl)
 
$
63.07

 
$
59.98

Total oil volume (Bbl)
 
7,177,500

 
2,409,000

Brent ICE to WTI NYMEX - Basis Swaps
 
 
 
 
Volume (Bbl)
 
2,695,000

 
—

Weighted-average differential ($/Bbl)
 
$
5.09

 
$
—

NGL - Mont Belvieu OPIS:
 
 
 
 
Purity Ethane - Swaps:
 
 
 
 
Volume (Bbl)
 
275,000

 
912,500

Weighted-average price ($/Bbl)
 
$
13.60

 
$
12.01

Non-TET Propane - Swaps:
 
 
 
 
Volume (Bbl)
 
935,000

 
730,000

Weighted-average price ($/Bbl)
 
$
26.58

 
$
25.52

Non-TET Normal Butane - Swaps:
 
 
 
 
Volume (Bbl)
 
330,000

 
255,500

Weighted-average price ($/Bbl)
 
$
28.69

 
$
27.72

Non-TET Isobutane - Swaps:
 
 
 
 
Volume (Bbl)
 
82,500

 
67,525

Weighted-average price ($/Bbl)
 
$
29.99

 
$
28.79

Non-TET Natural Gasoline - Swaps:
 
 
 
 
Volume (Bbl)
 
302,500

 
237,250

Weighted-average price ($/Bbl)
 
$
45.15

 
$
44.31

Total NGL volume (Bbl)
 
1,925,000

 
2,202,775

Natural gas:
 
 

 
 

Henry Hub NYMEX - Swaps:
 
 

 
 

Volume (MMBtu)
 
17,875,000

 
27,922,500

Weighted-average price ($/MMBtu)
 
$
2.72

 
$
2.53

Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
 
 

 
 

Volume (MMBtu)
 
31,625,000

 
23,360,000

Weighted-average differential ($/MMBtu)
 
$
(0.82
)
 
$
(0.47
)