The Company has entered into commodity price derivative agreements including fixed swap contracts and costless collar contracts. These instruments are intended to reduce the Company’s exposure to short-term fluctuations in the price of oil and natural gas. Fixed swap contracts set a fixed price and provide payments to the Company if the index price is below the fixed price, or require payments by the Company if the index price is above the fixed price. Collar contracts set a fixed floor price and a fixed ceiling price and provide payments to the Company if the index price falls below the floor or require payments by the Company if the index price rises above the ceiling. These contracts cover only a portion of the Company’s natural gas and oil production and provide only partial price protection against declines in natural gas and oil prices. These derivative instruments may expose the Company to risk of financial loss and limit the benefit of future increases in prices. The Company’s derivative contracts are currently with Bank of Oklahoma and Koch Supply and Trading LP. The derivative contracts with Bank of Oklahoma are secured under the credit facility with Bank of Oklahoma. The derivative contracts with Koch are unsecured. The derivative instruments have settled or will settle based on the prices below.

	Production volume
Contract period	covered per month	Index	Contract price
Natural gas costless collars
April - October 2020	100,000 Mmbtu	NYMEX Henry Hub	$2.20 floor / $2.59 ceiling
Natural gas fixed price swaps
July 2019 - March 2020	100,000 Mmbtu	NYMEX Henry Hub	$2.982
January - December 2020	80,000 Mmbtu	NYMEX Henry Hub	$2.750
April - October 2020	100,000 Mmbtu	NYMEX Henry Hub	$2.405
November 2020 - March 2021	100,000 Mmbtu	NYMEX Henry Hub	$2.661
Oil costless collars
July 2019 - June 2020	2,000 Bbls	NYMEX WTI	$65.00 floor / $76.15 ceiling
January - June 2020	2,000 Bbls	NYMEX WTI	$60.00 floor / $67.00 ceiling
January - December 2020	2,000 Bbls	NYMEX WTI	$55.00 floor / $62.00 ceiling
Oil fixed price swaps
January - December 2020	2,000 Bbls	NYMEX WTI	$55.28
January - December 2020	2,000 Bbls	NYMEX WTI	$58.65
January - December 2020	2,000 Bbls	NYMEX WTI	$60.00
January - December 2020	2,000 Bbls	NYMEX WTI	$58.05
July - December 2020	2,000 Bbls	NYMEX WTI	$58.10

The Company has elected not to complete all of the documentation requirements necessary to permit these derivative contracts to be accounted for as cash flow hedges. The Company’s fair value of derivative contracts was a net asset of $774,477 as of December 31, 2019, and a net asset of $2,494,144 as of September 30, 2019. Net cash received related to derivative contracts settled during the three-month period ended December 31, 2019, was $901,773 compared to net cash paid of $1,699,401 in the same period in the prior year.

The fair value amounts recognized for the Company’s derivative contracts executed with the same counterparty under a master netting arrangement may be offset. The Company has the choice to offset or not, but that choice must be applied consistently. A master netting arrangement exists if the reporting entity has multiple contracts with a single counterparty that are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. Offsetting the fair values recognized for the derivative contracts outstanding with a single counterparty results in the net fair value of the transactions being reported as an asset or a liability in the Condensed Balance Sheets.

The following table summarizes and reconciles the Company's derivative contracts’ fair values at a gross level back to net fair value presentation on the Company's Condensed Balance Sheets at December 31, 2019, and September 30, 2019. The Company has offset all amounts subject to master netting agreements in the Company's Condensed Balance Sheets at December 31, 2019, and September 30, 2019.

	December 31, 2019								September 30, 2019
	Fair Value (a)								Fair Value (a)
	Commodity Contracts								Commodity Contracts
	Current Assets			Current Liabilities			Non-Current Assets		Current Assets		Non-Current Assets
Gross amounts recognized	$	883,167		$	(109,061	)	$	371	$	2,256,639	$	237,505
Offsetting adjustments		(109,061	)		109,061			-		-		-
Net presentation on Condensed Balance Sheets	$	774,106		$	-		$	371	$	2,256,639	$	237,505

(a) See Fair Value Measurements section for further disclosures regarding fair value of financial instruments.

The fair value of derivative assets and derivative liabilities is adjusted for credit risk. The impact of credit risk was immaterial for all periods presented.