Commodity Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Fair Value and Classification of Derivative Instruments

The tables below summarize the fair values and classifications of the Partnership’s derivative instruments, as well as the gross recognized derivative assets, liabilities, and amounts offset in the consolidated balance sheets as of each date:

		June 30, 2020
Classification	Balance Sheet Location	Gross Fair Value		Effect of Counterparty Netting		Net Carrying Value on Balance Sheet
		(in thousands)
Assets:
Current asset	Commodity derivative assets	$	49,258	$	(3,736)	$	45,522
Long-term asset	Deferred charges and other long-term assets	610		(531)		79
Total assets		$	49,868	$	(4,267)	$	45,601
Liabilities:
Current liability	Commodity derivative liabilities	$	4,047	$	(3,736)	$	311
Long-term liability	Commodity derivative liabilities	5,269		(531)		4,738
Total liabilities		$	9,316	$	(4,267)	$	5,049

		December 31, 2019
Classification	Balance Sheet Location	Gross Fair Value		Effect of Counterparty Netting		Net Carrying Value on Balance Sheet
		(in thousands)
Assets:
Current asset	Commodity derivative assets	$	19,028	$	(4,238)	$	14,790
Long-term asset	Deferred charges and other long-term assets	713		(105)		608
Total assets		$	19,741	$	(4,343)	$	15,398
Liabilities:
Current liability	Commodity derivative liabilities	$	4,397	$	(4,238)	$	159
Long-term liability	Commodity derivative liabilities	123		(105)		18
Total liabilities		$	4,520	$	(4,343)	$	177

Changes in Fair Value of Company's Commodity Derivative Instruments

Changes in the fair values of the Partnership’s derivative instruments (both assets and liabilities) are presented on a net basis in the accompanying consolidated statements of operations and consolidated statements of cash flows and consist of the following for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
Derivatives not designated as hedging instruments	2020		2019		2020		2019
	(in thousands)
Beginning fair value of commodity derivative instruments	$	96,278	$	5,112	$	15,221	$	48,038
Gain (loss) on oil derivative instruments	(21,647)		7,905		56,164		(31,356)
Gain (loss) on natural gas derivative instruments	2,473		21,282		14,673		19,360
Net cash paid (received) on settlements of oil derivative instruments	(26,776)		1,745		(28,317)		(2,810)
Net cash paid (received) on settlements of natural gas derivative instruments	(9,776)		(4,676)		(17,189)		(1,864)
Net change in fair value of commodity derivative instruments	(55,726)		26,256		25,331		(16,670)
Ending fair value of commodity derivative instruments	$	40,552	$	31,368	$	40,552	$	31,368

Summary of Open Derivative Contracts

The Partnership had the following open derivative contracts for oil as of June 30, 2020:

		Weighted Average Price (Per Bbl)		Range (Per Bbl)
Period and Type of Contract	Volume (Bbl)			Low		High
Oil Swap Contracts:
2020
Second Quarter	210,000	$	57.32	$	54.92	$	58.65
Third Quarter	630,000	57.32		54.92		58.65
Fourth Quarter	630,000	57.32		54.92		58.65
2021
First Quarter	480,000	$	36.18	$	32.64	$	37.92
Second Quarter	480,000	36.18		32.64		37.92
Third Quarter	480,000	36.18		32.64		37.92
Fourth Quarter	480,000	36.18		32.64		37.92

		Weighted Average Floor Price (Per Bbl)		Weighted Average Ceiling Price (Per Bbl)
Period and Type of Contract	Volume (Bbl)
Oil Collar Contracts:
2020
Second Quarter	70,000	$	56.43	$	67.14
Third Quarter	210,000	56.43		67.14
Fourth Quarter	210,000	56.43		67.14

The Partnership had the following open derivative contracts for natural gas as of June 30, 2020:

		Weighted Average Price (Per MMBtu)		Range (Per MMBtu)
Period and Type of Contract	Volume (MMBtu)			Low		High
Natural Gas Swap Contracts:
2020
Third Quarter	10,120,000	$	2.69	$	2.55	$	2.74
Fourth Quarter	10,120,000	2.69		2.55		2.74
2021
First Quarter	7,200,000	$	2.60	$	2.52	$	2.72
Second Quarter	7,280,000	2.60		2.52		2.72
Third Quarter	7,360,000	2.60		2.52		2.72
Fourth Quarter	7,360,000	2.60		2.52		2.72