The Company utilizes commodity price swaps, basis swaps, swaptions and collars (purchased put options and written call options) to (i) reduce the effects of volatility in price changes on the crude oil commodities it produces and sells, (ii) reduce commodity price risk and (iii) provide a base level of cash flow in order to assure it can execute at least a portion of its capital spending.

All derivative instruments are recorded on the Company’s balance sheet as either assets or liabilities measured at their fair value (see Note 10). The Company has not designated any derivative instruments as hedges for accounting purposes and does not enter into such instruments for speculative trading purposes. If a derivative does not qualify as a hedge or is not designated as a hedge, the changes in the fair value are recognized in the revenues section of the Company’s condensed statements of operations as a gain or loss on derivative instruments. Mark-to-market gains and losses represent changes in fair values of

derivatives that have not been settled. The Company’s cash flow is only impacted when the actual settlements under the derivative contracts result in making or receiving a payment to or from the counterparty. These cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

The following table presents cash settlements on matured or liquidated derivative instruments and non-cash gains and losses on open derivative instruments for the periods presented. Cash receipts and payments below reflect proceeds received upon early liquidation of derivative positions and gains or losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price of matured contracts. Non-cash gains and losses below represent the change in fair value of derivative instruments which continue to be held at period-end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured or were liquidated during the period.


	Three Months Ended March 31,
(In thousands)	2019		2018
Cash Received (Paid) on Settled Derivatives	$	12,546	$	(8,130)
Non-Cash Mark-to-Market Loss on Derivatives	(152,169)		(12,141)
Gain (Loss) on Derivative Instruments, Net	$	(139,623)	$	(20,271)

The Company has master netting agreements on individual commodity contracts with certain counterparties and therefore the current asset and liability are netted on the balance sheet and the non-current asset and liability are netted on the balance sheet for contracts with these counterparties.

As of March 31, 2019, the Company had a total volume on open commodity price swaps of 14.8 million barrels at a weighted average price of approximately $60.50 per barrel. The following table reflects the weighted average price of open commodity price swap derivative contracts as of March 31, 2019, by year with associated volumes.

In addition to the open commodity price swap contracts the Company has entered into basis swap contracts. Basis swaps fix the price differential between a published index price and the applicable local index price under which the Company’s production is sold. The following table reflects open commodity basis swap contracts as of March 31, 2019.

The following table sets forth the amounts, on a gross basis, and classification of the Company’s outstanding derivative financial instruments at March 31, 2019 and December 31, 2018, respectively. Certain amounts may be presented on a net basis on the condensed financial statements when such amounts are with the same counterparty and subject to a master netting arrangement.


Type of Crude Oil Contract	Balance Sheet Location	March 31, 2019 Estimated Fair Value		December 31, 2018 Estimated Fair Value
Derivative Assets:		(In thousands)
Swap Price Contracts	Current Assets	$	17,973	$	108,514
Basis Swap Contracts	Current Assets	606		$	7,356
Swap Price Contracts	Noncurrent Assets	17,839		$	61,843

Total Derivative Assets		$	36,417	$	177,713

Derivative Liabilities:
Swap Price Contracts	Current Liabilities	$	(5,882)	$	—

Swap Price Contracts	Noncurrent Liabilities	(4,991)		—

Total Derivative Liabilities		$	(10,873)	$	—

The use of derivative transactions involves the risk that the counterparties will be unable to meet the financial terms of such transactions. When the Company has netting arrangements with its counterparties that provide for offsetting payables against receivables from separate derivative instruments these assets and liabilities are netted on the balance sheet. The tables presented below provide reconciliation between the gross assets and liabilities and the amounts reflected on the balance sheet. The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.


	Estimated Fair Value at March 31, 2019
(In thousands)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:
Current Assets	$	31,558	$	(12,980)	$	18,578
Noncurrent Assets	25,950		(8,111)		17,839
Total Derivative Assets	$	57,508	$	(21,091)	$	36,417

Offsetting of Derivative Liabilities:
Current Liabilities	$	(18,862)	$	12,980	$	(5,882)
Noncurrent Liabilities	(13,102)		8,111		(4,991)
Total Derivative Liabilities	$	(31,964)	$	21,091	$	(10,873)


	Estimated Fair Value at December 31, 2018
(In thousands)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:
Current Assets	$	116,620	$	(750)	$	115,870
Non-Current Assets	61,857		(14)		61,843
Total Derivative Assets	$	178,477	$	(764)	$	177,713

Offsetting of Derivative Liabilities:
Current Liabilities	$	(750)	$	750	$	—
Non-Current Liabilities	(14)		14		—
Total Derivative Liabilities	$	(764)	$	764	$	—