Derivative Financial Instruments

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

At March 31, 2021, the Company had various costless collar and swap contracts open and in place to mitigate its exposure to oil and natural gas price volatility, each with a specific term (calculation period), notional quantity (volume hedged) and price floor and ceiling for the collars and fixed price for the swaps. At March 31, 2021, each contract was set to expire at

varying times during 2021 and 2022. The Company had no open contracts associated with natural gas liquids (“NGL”) prices at March 31, 2021.

The following is a summary of the Company’s open costless collar contracts for oil and natural gas at March 31, 2021.


Commodity	Calculation Period	Notional Quantity (Bbl or MMBtu)	Weighted Average Price Floor ($/Bbl or $/MMBtu)		Weighted Average Price Ceiling ($/Bbl or $/MMBtu)		Fair Value of Asset (Liability) (thousands)
Oil	04/01/2021 - 12/31/2021	7,110,000	$	42.06	$	55.15	(47,967)
Natural Gas	04/01/2021 - 12/31/2021	32,000,000	$	2.45	$	3.65	1,399
Natural Gas	01/01/2022 - 03/31/2022	3,000,000	$	2.60	$	4.22	141
Total open costless collar contracts							$	(46,427)

The following is a summary of the Company’s open swap contracts for oil at March 31, 2021.


Commodity	Calculation Period	Notional Quantity (Bbl)	Fixed Price ($/Bbl)		Fair Value of Asset (Liability) (thousands)
Oil	04/01/2021 - 12/31/2021	1,530,000	$	35.26	(34,697)
Total open swap contracts					$	(34,697)

The following is a summary of the Company’s open basis swap contracts for oil at March 31, 2021.


Commodity	Calculation Period	Notional Quantity (Bbl)	Fixed Price ($/Bbl)		Fair Value of Asset (Liability) (thousands)
Oil Basis	04/01/2021 - 12/31/2021	6,300,000	$	0.87	1,249
Oil Basis	01/01/2022 - 12/31/2022	5,520,000	$	0.95	563
Total open basis swap contracts					$	1,812

At March 31, 2021, the aggregate liability value for the Company’s open derivative financial instruments was $79.3 million.

The Company’s derivative financial instruments are subject to master netting arrangements, and the Company’s counterparties allow for cross-commodity master netting provided the settlement dates for the commodities are the same. The Company does not present different types of commodities with the same counterparty on a net basis in its interim unaudited condensed consolidated balance sheets.

The following table presents the gross asset and liability fair values of the Company’s commodity price derivative financial instruments and the location of these balances in the interim unaudited condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 (in thousands).


Derivative Instruments	Gross amounts recognized		Gross amounts netted in the condensed consolidated balance sheets		Net amounts presented in the condensed consolidated balance sheets
March 31, 2021
Current assets	$	377,949	$	(373,878)	$	4,071
Other assets	128,755		(128,333)		422
Current liabilities	(457,683)		373,878		(83,805)
Long-term liabilities	(128,333)		128,333		—
Total	$	(79,312)	$	—	$	(79,312)
December 31, 2020
Current assets	$	382,328	$	(375,601)	$	6,727
Other assets	150,194		(147,624)		2,570
Current liabilities	(420,787)		375,601		(45,186)
Long-term liabilities	(147,624)		147,624		—
Total	$	(35,889)	$	—	$	(35,889)

The following table summarizes the location and aggregate gain (loss) of all derivative financial instruments recorded in the interim unaudited condensed consolidated statements of operations for the periods presented (in thousands). These derivative financial instruments are not designated as hedging instruments.


		Three Months Ended March 31,
Type of Instrument	Location in Condensed Consolidated Statement of Operations	2021		2020
Derivative Instrument
Oil	Revenues: Realized (loss) gain on derivatives	$	(26,075)	$	10,867
Natural Gas	Revenues: Realized gain on derivatives	162		—

Realized (loss) gain on derivatives		(25,913)		10,867
Oil	Revenues: Unrealized (loss) gain on derivatives	(39,269)		136,430
Natural Gas	Revenues: Unrealized loss on derivatives	(4,154)		—

Unrealized (loss) gain on derivatives		(43,423)		136,430
Total		$	(69,336)	$	147,297