Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis

The following presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis for the periods presented:



(in thousands)	Level 1		Level 2		Level 3			Total fair value
As of September 30, 2014:
Commodity derivatives	$	—	$	21,753	$	—		$	21,753
Deferred premiums	—		—		(11,055		)	(11,055		)
Total	$	—	$	21,753	$	(11,055	)	$	10,698



(in thousands)	Level 1		Level 2		Level 3			Total fair value
As of December 31, 2013:
Commodity derivatives	$	—	$	94,741	$	—		$	94,741
Deferred premiums	—		—		(12,684		)	(12,684		)
Total	$	—	$	94,741	$	(12,684	)	$	82,057

Actual cash payments required for deferred premium contracts

The following table presents actual cash payments required for deferred premium contracts in place as of September 30, 2014, and for the calendar years following:



(in thousands)
Remaining 2014	$	1,820
2015	5,166
2016	358
2017	3,651
2018	339
Total	$	11,334

Summary of changes in assets (liability) classified as Level 3 measurements

A summary of the changes in assets classified as Level 3 measurements for the periods presented are as follows:



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2014			2013			2014			2013
Balance of Level 3 at beginning of period	$	(9,025	)	$	(19,742	)	$	(12,684	)	$	(24,709	)
Change in net present value of deferred premiums for derivatives	(50		)	(102		)	(170		)	(384		)
Total purchases and settlements:
Purchases	(3,800		)	—			(3,800		)	—
Settlements⁽¹⁾	1,820			4,881			5,599			10,130
Balance of Level 3 at end of period	$	(11,055	)	$	(14,963	)	$	(11,055	)	$	(14,963	)

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(1)	The settlement amounts for each of the three and nine months ended September 30, 2013 include $2.2 million in deferred premiums, which were settled net with the early terminated contracts from which they derive. There were no comparable amounts during the three or nine months ended September 30, 2014.