Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Measurements

6. Fair Value Measurements

The Company’s derivative instruments are measured at fair value on a recurring basis. U.S. GAAP establishes a fair value hierarchy that has three levels based on the reliability of the inputs used to determine the fair value. These levels include: Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s natural gas derivative instruments are included within the Level 2 fair value hierarchy. The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value:

	Fair value as of September 30, 2015
	Level 1		Level 2			Level 3		Total
Assets	$	—	$	—		$	—	$	—
Liabilities:
Derivative instruments		—		(11,730	)		—		(11,730	)
Total fair value	$	—	$	(11,730	)	$	—	$	(11,730	)