DERIVATIVES (Tables)

12 Months Ended

Dec. 31, 2013

DERIVATIVES

Summary of derivative commodity contracts in place

Settlement Period	Derivative Instrument	Total Volumes (Bbls/MMBtu per day)		Average Fixed Price		Average Short Floor Price		Average Floor Price		Average Ceiling Price		Fair Market Value of Asset (Liability)
Oil
1Q 2014	Swap		3,133	$	96.97							$	(403,499	)
2Q 2014	Swap		4,126	$	96.20								(288,370	)
3Q 2014	Swap		3,870	$	93.04								(518,444	)
4Q 2014	Swap		3,870	$	93.04								205,179
1Q 2014	Collar		5,617					$	86.33	$	97.09		(1,338,410	)
2Q 2014	Collar		4,846					$	86.55	$	96.72		(1,252,787	)
3Q 2014	Collar		4,326					$	86.16	$	96.57		(615,971	)
4Q 2014	Collar		4,326					$	86.16	$	96.57		(68,724	)
2014	3-Way Collar		1,000			$	60.00	$	85.00	$	99.50		(303,314	)
2015	3-Way Collar		4,500			$	66.67	$	83.33	$	94.12		(782,385	)
												$	(5,366,725	)
Gas
2014	3-Way Collar		15,000			$	3.50	$	4.00	$	4.75	$	122,173
2015	3-Way Collar		15,000			$	3.50	$	4.00	$	4.75		(127,895	)
												$	(5,722	)
Total												$	(5,372,447	)

Summary of economic derivatives in place, which settle monthly

Settlement Period	Derivative Instrument	Total Volumes (Bbls/MMBtu per day)		Average Fixed Price		Average Short Floor Price		Average Floor Price		Average Ceiling Price
Oil
1Q 2014	Swap		3,133	$	96.97
2Q 2014	Swap		4,126	$	96.20
3Q 2014	Swap		3,870	$	93.04
4Q 2014	Swap		3,870	$	93.04
1Q 2014	Collar		5,617					$	86.33	$	97.09
2Q 2014	Collar		4,846					$	86.55	$	96.72
3Q 2014	Collar		4,326					$	86.16	$	96.57
4Q 2014	Collar		4,326					$	86.16	$	96.57
1Q 2014	3-Way collar		1,000			$	60.00	$	85.00	$	99.50
2Q - 4Q 2014	3-Way Collar		2,000			$	65.00	$	87.68	$	99.75
2015	3-Way Collar		4,500			$	66.67	$	83.33	$	94.12
Gas
1Q 2014	3-Way Collar		22,500			$	3.56	$	4.13	$	4.78
2Q - 4Q 2014	3-Way Collar		30,000			$	3.63	$	4.21	$	4.81
2015	3-Way Collar		15,000			$	3.50	$	4.00	$	4.75

Summary of all the Company's derivative positions reported on the accompanying balance sheets

	As of December 31, 2013
	Balance Sheet Location	Fair Value
Derivative Assets
Commodity contracts	Current assets	$	857,863
Commodity contracts	Noncurrent assets		292,691
Derivative Liabilities
Commodity contracts	Current liabilities		(5,320,030	)
Commodity contracts	Long-term liabilities		(1,202,971	)
Total net derivative liability		$	(5,372,447	)

	As of December 31, 2012
	Balance Sheet Location	Fair Value
Derivative Assets
Commodity contracts	Current assets	$	2,178,064
Commodity contracts	Noncurrent assets		—
Derivative Liabilities
Commodity contracts	Current liabilities		(5,200,202	)
Commodity contracts	Long-term liabilities		(1,208,106	)
Total net derivative liability		$	(4,230,244	)

Summary of the components of the derivative gain (loss) presented on the accompanying statements of operations and comprehensive income

	For the Years Ended December 31,
	2013			2012			2011
Derivative cash settlement gain (loss):
Oil contracts	$	(11,755,140	)	$	(1,491,948	)	$	(3,694,974	)
Gas contracts		425,291			766,566			670,838
Total derivative cash settlement (loss)(1)	$	(11,329,849	)	$	(725,382	)	$	(3,024,136	)
Change in fair value gain (loss):
Oil contracts	$	(1,142,203	)	$	1,649,687		$	225,393
Gas contracts		—			—			—
Total change in fair value gain (loss)	$	(1,142,203	)	$	1,649,687		$	225,393
Total derivative gain (loss)(2)	$	(12,472,052	)	$	924,305		$	(2,798,743	)

(1)

Derivative cash settlement gain (loss) is reported in the derivative cash settlements line item on the accompanying statements of cash flows within the net cash used in investing activities.

(2)

Total derivative gain (loss) is reported in the derivative gain (loss) line item on the accompanying statements of cash flows within the net cash provided by operating activities.