Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following fair value hierarchy tables present information about Energen’s assets and liabilities measured at fair value on a recurring basis:



	September 30, 2018
(in thousands)	Level 2			Level 3			Total
Assets:
Derivative instruments	$	(4,645	)	$	8,871		$	4,226
Total assets	(4,645		)	8,871			4,226
Liabilities:
Derivative instruments	167,065			5,707			172,772
Noncurrent derivative instruments	30,787			26,670			57,457
Total liabilities	197,852			32,377			230,229
Net derivative liability	$	(202,497	)	$	(23,506	)	$	(226,003	)



	December 31, 2017
(in thousands)	Level 2			Level 3			Total
Liabilities:
Derivative instruments	$	43,241		$	28,138		$	71,379
Noncurrent derivative instruments	7,736			1,150			8,886
Total liabilities	50,977			29,288			80,265
Net derivative liability	$	(50,977	)	$	(29,288	)	$	(80,265	)

Schedule of Changes in Fair Value of Derivative Commodity Instruments

The table below sets forth a summary of changes in the fair value of Energen’s Level 3 derivative commodity instruments as follows:



	Three months ended
	September 30,
(in thousands)	2018			2017
Balance at beginning of period	$	90,303		$	7,645
Realized gains (losses)	22,603			(1,548		)
Unrealized losses relating to instruments held at the reporting date*	(109,528		)	(24,112		)
Settlements during period	(26,884		)	398
Balance at end of period	$	(23,506	)	$	(17,617	)



	Nine months ended
	September 30,
(in thousands)	2018			2017
Balance at beginning of period	$	(29,288	)	$	(8,852	)
Realized gains (losses)	21,618			(4,588		)
Unrealized gains (losses) relating to instruments held at the reporting date*	10,064			(7,616		)
Settlements during period	(25,900		)	3,439
Balance at end of period	$	(23,506	)	$	(17,617	)

*Includes $88.8 million and $13.0 million in losses related to open contracts held at the reporting date for the three months and nine months ended September 30, 2018, respectively. Includes $23.0 million and $14.2 million in losses related to open contracts held at the reporting date for the three months and nine months ended September 30, 2017, respectively.

Quantitative Information About Level 3 Fair Value Measurements of Derivative Commodity Instruments

The table below sets forth quantitative information about Energen’s Level 3 fair value measurements of derivative commodity instruments as follows:



(in thousands, except price data)	Fair Value as of September 30, 2018			Valuation Technique*	Unobservable Input*	Range
Oil Basis - WTI/WTI
2018	$	24,790		Discounted Cash Flow	Forward Basis	($9.50) - ($9.23) Bbl
2019	$	7,417		Discounted Cash Flow	Forward Basis	($6.76) - ($5.83) Bbl
2020	$	(11,350	)	Discounted Cash Flow	Forward Basis	($0.53) - ($0.26) Bbl
Natural Gas Liquids
2018	$	(17,870	)	Discounted Cash Flow	Forward Basis	$1.00 - $1.01 Gal
2019	$	(26,493	)	Discounted Cash Flow	Forward Basis	$0.89 Gal

*Discounted cash flow represents an income approach in calculating fair value including the referenced unobservable input and a discount reflecting credit quality of the counterparty.