Note 7 - Hedging Program and Derivatives

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

7.  Hedging Program and Derivatives

The derivative contracts we utilize are based on index prices that may and often differ from the actual oil and gas prices realized in our operations.  Our derivative contracts do not qualify for hedge accounting; therefore, fluctuations in the market value of the derivative contracts are recognized in earnings during the current period. There are no netting agreements relating to these derivative contracts and there is no policy to offset. 

The following table sets forth the summary position of our derivative contracts as of June 30, 2021:

	Oil - WTI
Contract Periods	Daily Volume (Bbl)		Swap Price (per Bbl)
Fixed Swaps
2021 July - December		750	$	52.50

Substantially all of our hedges were terminated in April 2021.

The following table illustrates the impact of derivative contracts on our balance sheet:

Fair Value of Derivative Contracts as of June 30, 2021
	Asset Derivatives			Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity price derivatives	Derivatives – current	$	-	Derivatives – current	$	3,006
Commodity price derivatives	Derivatives – long-term		-	Derivatives – long-term		-
		$	-		$	3,006

Fair Value of Derivative Contracts as December 31, 2020
	Asset Derivatives			Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity price derivatives	Derivatives – current	$	9,639	Derivatives – current	$	480
Commodity price derivatives	Derivatives – long-term		10,281	Derivatives – long-term		-
		$	19,920		$	480