DERIVATIVES

The Company enters into commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices and the associated impact on cash flows. All contracts are entered into for other-than-trading purposes. The Company’s derivatives include swaps, collar, and put arrangements for oil and gas, and none of the derivative instruments qualify as having hedging relationships.

In a typical commodity swap agreement, if the agreed upon published third-party index price is lower than the swap fixed price, the Company receives the difference between the index price and the agreed upon swap fixed price. If the index price is higher than the swap fixed price, the Company pays the difference.

A cashless collar arrangement establishes a floor and ceiling price on future oil and gas production. When the settlement price is above the ceiling price, the Company pays the difference between the settlement price and the ceiling price. When the settlement price is below the floor price, the Company receives the difference between the settlement price and floor price. In the event that the settlement price is between the ceiling and the floor, no payment or receipt occurs.

A basis swap arrangement guarantees a price differential from a specified delivery point. The Company receives the difference between the price differential and the stated terms, if the price differential is greater than the stated terms. The Company pays the difference between the price differential and the stated terms, if the stated terms are greater than the price differential.

A put option provides the Company the right, but not the obligation, to sell a specified underlying security at a designated price within a specified time frame.

As of December 31, 2018, the Company had entered into the following commodity derivative contracts:



	Crude Oil (NYMEX WTI)		Natural Gas (NYMEX Henry Hub)		Natural Gas (CIG Basis)		Natural Gas (CIG)
	Bbls/day	Weighted Avg. Price per Bbl	MMBtu/day	Weighted Avg. Price per MMBtu	MMBtu/day	Weighted Avg. Price per MMBtu	MMBtu/day	Weighted Avg. Price per MMBtu
1Q19
Cashless Collar	4,000	$50.88/$63.83	7,600	$2.75/$3.22	—	—	—	—
Swap	4,000	$59.16	1,500	$3.13	7,600	$0.67	10,000	$2.17
Put	500	$55.00	—	—	—	—	—	—
2Q19
Cashless Collar	5,330	$54.42/$67.57	2,505	$2.75/$3.22	—	—	—	—
Swap	3,500	$57.84	—	—	—	—	16,703	$2.11
Put	500	$55.00	—	—	—	—	—	—
3Q19
Cashless Collar	3,000	$59.17/$75.72	—	—	—	—	—	—
Swap	5,000	$59.92	—	—	—	—	20,000	$2.10
Put	500	$55.00	—	—	—	—	—	—
4Q19
Cashless Collar	3,000	$59.17/$75.72	—	—	—	—	—	—
Swap	5,000	$59.92	—	—	—	—	20,000	$2.10
Put	500	$55.00	—	—	—	—	—	—
1Q20
Swap	3,000	$63.48	—	—	—	—	—	—

As of the filing date of this report, the Company had entered into the following commodity derivative contracts:



	Crude Oil (NYMEX WTI)		Natural Gas (NYMEX Henry Hub)		Natural Gas (CIG Basis)		Natural Gas (CIG)
	Bbls/day	Weighted Avg. Price per Bbl	MMBtu/day	Weighted Avg. Price per MMBtu	MMBtu/day	Weighted Avg. Price per MMBtu	MMBtu/day	Weighted Avg. Price per MMBtu
1Q19
Cashless Collar	4,656	$51.46/$65.40	7,600	$2.75/$3.22	—	—	—	—
Swap	4,000	$59.16	1,500	$3.13	7,600	$0.67	11,639	$2.20
Put	172	$55.00	—	—	—	—	—	—
2Q19
Cashless Collar	6,330	$54.51/$68.74	2,505	$2.75/$3.22	—	—	—	—
Swap	3,500	$57.84	—	—	—	—	19,203	$2.15
Put	—	—	—	—	—	—	—	—
3Q19
Cashless Collar	4,000	$58.13/$75.54	—	—	—	—	—	—
Swap	5,000	$59.92	—	—	—	—	22,500	$2.13
Put	—	—	—	—	—	—	—	—
4Q19
Cashless Collar	4,000	$58.13/$75.54	—	—	—	—	—	—
Swap	5,000	$59.92	—	—	—	—	22,500	$2.13
Put	—	—	—	—	—	—	—	—
1Q20
Swap	3,000	$63.48	—	—	—	—	2,500	$2.40
Collar	2,000	$55.00/$62.00	—	—	—	—	—	—

Derivative Assets and Liabilities Fair Value

The Company’s commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets and liabilities. The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as of December 31, 2018 and 2017 (in thousands):



		Successor
		As of December 31,
		2018			2017
	Balance Sheet Location	Fair Value			Fair Value
Derivative Assets:
Commodity contracts	Current assets	$	34,408		$	488
Commodity contracts	Noncurrent assets	3,864			6
Derivative Liabilities:
Commodity contracts	Current liabilities	(183		)	(11,423		)
Commodity contracts	Long-term liabilities	—			(2,972		)
Total derivative assets (liabilities), net		$	38,089		$	(13,901	)

The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations (in thousands):



	Successor						Predecessor
	Year Ended December 31, 2018			April 29, 2017 through December 31, 2017			January 1, 2017 through April 28, 2017		Year Ended December 31, 2016
Derivative cash settlement gain (loss):
Oil contracts	$	(17,700	)	$	(1,486	)	$	—	$	18,333
Gas contracts	(460		)	22			—		—
Total derivative cash settlement gain (loss)⁽¹⁾	$	(18,160	)	$	(1,464	)	$	—	$	18,333

Change in fair value gain (loss)	48,431			(13,901		)	$	—	$	(29,567	)

Total derivative gain (loss)⁽¹⁾	$	30,271		$	(15,365	)	$	—	$	(11,234	)

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(1)	Total derivative gain (loss) and the derivative cash settlement gain (loss) for each of the periods presented above is reported in the derivative (gain) loss and derivative cash settlements line items on the accompanying statements of cash flows within the net cash provided by operating activities.