© Reuters. FILE PHOTO: The logo of U.S. oil and gas company EOG Resources is seen in its office in Chongqing, China December 15, 2017. Picture taken December 15, 2017. REUTERS/Chen Aizhu
(Reuters) – Shale oil and gas producer EOG Resources Inc (NYSE:) paid $847 million during the third quarter to settle wrong-way bets on energy prices, the company said in a regulatory filing on Tuesday.
Russia’s invasion of Ukraine sent energy prices soaring since February, although they cooled off from decade highs towards the end of September.
oil averaged roughly $91.65 a barrel in the third quarter ended Sept. 30, below the $108 average in the second quarter. prices remained strong, however, with an average of near $8 per million British Thermal Units (mmBTU) in the third quarter compared with around $7.60 in the second.
To protect themselves from volatility, oil and gas producers often enter ‘hedging contracts’ which guarantee sales at a fixed price in the future. Producers who lock in sales at lower prices or purchases at higher than current prices, lose to settle the differences.
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