|
Derivative Activities(Tables)
|
9 Months Ended |
|
Sep. 30, 2013
|
| Derivative Volumes Hedged and Average Hedge Prices |
The following table sets forth our derivative volumes by year as of September 30, 2013:
|
Period
|
|
Contract Type
|
|
Volume Hedged
|
|
Weighted
Average Hedge Price
|
|
Natural Gas
|
|
|
|
|
|
|
|
2013
|
|
Collars
|
|
280,000 Mmbtu/day
|
|
$ 4.59–$ 5.05
|
|
2014
|
|
Collars
|
|
447,500 Mmbtu/day
|
|
$ 3.84–$ 4.48
|
|
2015
|
|
Collars
|
|
145,000 Mmbtu/day
|
|
$ 4.07–$ 4.56
|
|
2013
|
|
Swaps
|
|
293,370 Mmbtu/day
|
|
$ | 3.82 |
|
2014
|
|
Swaps
|
|
30,000 Mmbtu/day
|
|
$ | 4.17 |
|
2015
|
|
Swaps
|
|
7,500 Mmbtu/day
|
|
$ | 4.16 |
|
|
|
|
|
|
|
|
|
Crude Oil
|
|
|
|
|
|
|
|
2013
|
|
Collars
|
|
3,000 bbls/day
|
|
$ 90.60–$ 100.00
|
|
2014
|
|
Collars
|
|
2,000 bbls/day
|
|
$ 85.55–$ 100.00
|
|
2013
|
|
Swaps
|
|
6,825 bbls/day
|
|
$ | 96.79 |
|
2014
|
|
Swaps
|
|
7,000 bbls/day
|
|
$ | 94.14 |
|
2015
|
|
Swaps
|
|
2,000 bbls day
|
|
$ | 90.20 |
|
|
|
|
|
|
|
|
|
NGLs (Natural Gasoline)
|
|
|
|
|
|
|
|
2013
|
|
Sold Swaps
|
|
8,000 bbls/day
|
|
$ | 89.64 |
|
2013
|
|
Re-purchased Swaps
|
|
1,500 bbls/day
|
|
$ | 76.30 |
|
|
|
|
|
|
|
|
|
NGLs (Propane)
|
|
|
|
|
|
|
|
2013
|
|
Swaps
|
|
11,000 bbls/day
|
|
$ | 37.87 |
|
2014
|
|
Swaps
|
|
7,000 bbls/day
|
|
$ | 40.38 |
|
|
|
|
|
|
|
|
|
NGLs (Normal butane)
|
|
|
|
|
|
|
|
2013
|
|
Swaps
|
|
2,000 bbls/day
|
|
$ | 55.44 |
|
2014
|
|
Swaps
|
|
2,000 bbls/day
|
|
$ | 54.60 |
|
| Derivative Fair Value Income |
The following table presents information about the components of derivative fair value (loss) income for the three months and the nine months ended September 30, 2013 and 2012 (in thousands):
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of derivatives that did not qualify or were not designated for hedge accounting (a)
|
$ | |
(34,219
|
)
|
|
$ | |
(53,646
|
)
|
|
$ | |
28,350 |
|
|
$ | |
30,075 |
|
|
Realized gain (loss) on settlement–natural gas (a) (b)
|
|
5,815 |
|
|
|
— |
|
|
|
(17,913
|
)
|
|
|
— |
|
|
Realized (loss) gain on settlement–oil (a) (b)
|
|
(8,005
|
)
|
|
|
1,955 |
|
|
|
(8,218
|
)
|
|
|
(1,899
|
)
|
|
Realized (loss) gain on settlement–NGLs (a) (b)
|
|
(3,907
|
)
|
|
|
14,682 |
|
|
|
(1,759
|
)
|
|
|
20,442 |
|
|
Hedge ineffectiveness
|
|
–realized
|
|
(854
|
)
|
|
|
988 |
|
|
|
(445
|
)
|
|
|
3,451 |
|
|
|
|
–unrealized
|
|
815 |
|
|
|
(4,707
|
)
|
|
|
(2,485
|
)
|
|
|
(5,061
|
)
|
|
Derivative fair value (loss) income
|
$ | |
(40,355
|
)
|
|
$ | |
(40,728
|
)
|
|
$ | |
(2,470
|
)
|
|
$ | |
47,008 |
|
(a) Derivatives that did not qualify or were not designated for hedge accounting. Change in fair value of derivatives line also includes gains of $3.1 million in third quarter 2013 and gains of $25.5 million in the first nine months 2013 related to discontinuance of hedge accounting.
(b) These amounts represent the realized gains and losses on settled derivatives that did not qualify or were not designated for hedge accounting, which before settlement are included in the category in this same table referred to as change in fair value of derivatives that did not qualify or were not designated for hedge accounting.
|
| Schedule of Derivative Off setting Assets and Liabilities Table Text Block |
The tables below provide additional information relating to our master netting arrangements with our derivative counterparties (in thousands):
|
|
|
|
September 30, 2013
|
|
|
|
|
|
Gross Amounts of
Recognized Assets
|
|
|
Gross Amounts
Offset in the
Balance Sheet
|
|
|
Net Amounts of
Assets Presented in the
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
Natural gas
|
|
–swaps
|
$ | |
10,965 |
|
|
$ | |
(2,046
|
)
|
|
$ | |
8,919 |
|
|
|
|
–collars
|
|
71,699 |
|
|
|
(1,720
|
)
|
|
|
69,979 |
|
|
Crude oil
|
|
–swaps
|
|
2,962 |
|
|
|
(7,766
|
)
|
|
|
(4,804
|
)
|
|
|
|
–collars
|
|
137 |
|
|
|
(1,803
|
)
|
|
|
(1,666
|
)
|
|
NGLs
|
|
–C5 swaps
|
|
3,374 |
|
|
|
(1,461
|
)
|
|
|
1,913 |
|
|
|
|
–C3 swaps
|
|
7 |
|
|
|
(552
|
)
|
|
|
(545
|
)
|
|
|
|
–C4 swaps
|
|
406 |
|
|
|
(135
|
)
|
|
|
271 |
|
|
|
|
|
$ | |
89,550 |
|
|
$ | |
(15,483
|
)
|
|
$ | |
74,067 |
|
|
|
|
|
September 30, 2013
|
|
|
|
|
|
Gross Amounts of
Recognized (Liabilities)
|
|
|
Gross Amounts
Offset in the
Balance Sheet
|
|
|
Net Amounts of
(Liabilities) Presented in the
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative (liabilities):
|
|
|
|
|
|
|
|
|
|
Natural gas
|
|
–swaps
|
$ | |
(1,219
|
)
|
|
$ | |
2,046 |
|
|
$ | |
827 |
|
|
|
|
–collars
|
|
(1,720
|
)
|
|
|
1,720 |
|
|
|
— |
|
|
Crude oil
|
|
–swaps
|
|
(7,766
|
)
|
|
|
7,766 |
|
|
|
— |
|
|
|
|
–collars
|
|
(1,803
|
)
|
|
|
1,803 |
|
|
|
— |
|
|
NGLs
|
|
–C5 swaps
|
|
(9
|
)
|
|
|
1,461 |
|
|
|
1,452 |
|
|
|
|
–C3 swaps
|
|
(10,469
|
)
|
|
|
552 |
|
|
|
(9,917
|
)
|
|
|
|
–C4 swaps
|
|
(571
|
)
|
|
|
135 |
|
|
|
(436
|
)
|
|
|
|
|
$ | |
(23,557
|
)
|
|
$ | |
15,483 |
|
|
$ | |
(8,074
|
)
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
Gross Amounts of
Recognized Assets
|
|
|
Gross Amounts
Offset in the
Balance Sheet
|
|
|
Net Amounts of
Assets Presented in the
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
Natural gas
|
|
–swaps
|
$ | |
10,746 |
|
|
$ | |
(3,242
|
)
|
|
$ | |
7,504 |
|
|
|
|
–collars
|
|
128,410 |
|
|
|
(6,155
|
)
|
|
|
122,255 |
|
|
|
|
–basis swaps
|
|
993 |
|
|
|
— |
|
|
|
993 |
|
|
Crude oil
|
|
–swaps
|
|
9,650 |
|
|
|
— |
|
|
|
9,650 |
|
|
|
|
–collars
|
|
2,222 |
|
|
|
— |
|
|
|
2,222 |
|
|
NGLs
|
|
–C5 swaps
|
|
13,055 |
|
|
|
(2,412
|
)
|
|
|
10,643 |
|
|
|
|
|
$ | |
165,076 |
|
|
$ | |
(11,809
|
)
|
|
$ | |
153,267 |
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
Gross Amounts of
Recognized (Liabilities)
|
|
Gross Amounts
Offset in the
Balance Sheet
|
|
|
Net Amounts of
(Liabilities) Presented in the
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative (liabilities):
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
|
|
–swaps
|
$ | |
(3,242
|
)
|
|
$ | |
(221
|
)
|
|
$ | |
(3,463
|
)
|
|
|
|
–collars
|
|
(9,618
|
)
|
|
|
9,618 |
|
|
|
— |
|
|
NGLs
|
|
–C5 swaps
|
|
(137
|
)
|
|
|
2,412 |
|
|
|
2,275 |
|
|
|
|
–C3 swaps
|
|
(6,746
|
)
|
|
|
— |
|
|
|
(6,746
|
)
|
|
|
|
|
$ | |
(19,743
|
)
|
|
$ | |
11,809 |
|
|
$ | |
(7,934
|
)
|
|
| Fair Value of Derivative Contracts by Consolidated Balance Sheets |
The table below provides data about the fair value of our derivative contracts. Derivative assets and liabilities shown below are presented as gross assets and liabilities, without regard to master netting arrangements, which are considered in the presentation of derivative assets and liabilities in the accompanying consolidated balance sheets (in thousands):
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
|
|
Assets
|
|
|
(Liabilities)
|
|
|
|
|
|
Assets
|
|
|
(Liabilities)
|
|
|
|
|
|
|
Carrying
Value
|
|
|
Carrying
Value
|
|
|
Net
Carrying
Value
|
|
|
Carrying
Value
|
|
|
Carrying
Value
|
|
|
Net
Carrying
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives that qualified for cash flow hedge accounting (before discontinuance of hedge accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps (a)
|
$ | |
7,091 |
|
|
$ | |
(3,960
|
)
|
|
$ | |
3,131 |
|
|
$ | |
22,236 |
|
|
$ | |
(3,242
|
)
|
|
$ | |
18,994 |
|
|
Collars (a)
|
|
38,685 |
|
|
|
(10,356
|
)
|
|
|
28,329 |
|
|
|
129,878 |
|
|
|
(9,721
|
)
|
|
|
120,157 |
|
|
|
$ | |
45,776 |
|
|
$ | |
(14,316
|
)
|
|
$ | |
31,460 |
|
|
$ | |
152,114 |
|
|
$ | |
(12,963
|
)
|
|
$ | |
139,151 |
|
|
Derivatives that did not qualify or were not designated for hedge accounting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold swaps (a)
|
$ | |
16,159 |
|
|
$ | |
(23,072
|
)
|
|
$ | |
(6,913
|
)
|
|
$ | |
7,316 |
|
|
$ | |
(8,904
|
)
|
|
$ | |
(1,588
|
)
|
|
Re-purchased swaps (a)
|
|
1,462 |
|
|
|
— |
|
|
|
1,462 |
|
|
|
5,920 |
|
|
|
— |
|
|
|
5,920 |
|
|
Collars (a)
|
|
42,943 |
|
|
|
(2,959
|
)
|
|
|
39,984 |
|
|
|
857 |
|
|
|
— |
|
|
|
857 |
|
|
Basis swaps (a)
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
993 |
|
|
|
— |
|
|
|
993 |
|
|
|
$ | |
60,564 |
|
|
$ | |
(26,031
|
)
|
|
$ | |
34,533 |
|
|
$ | |
15,086 |
|
|
$ | |
(8,904
|
)
|
|
$ | |
6,182 |
|
(a) Included in unrealized derivatives in the accompanying consolidated balance sheets. See additional discussion above regarding the discontinuance of hedge accounting.
|
| Effects of Cash Flow Hedges and Other Hedges on Accumulated Other Comprehensive Income |
The effects of our cash flow hedges (or those derivatives that previously qualified for hedge accounting) on accumulated other comprehensive income in the accompanying consolidated balance sheets is summarized below (in thousands):
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
Change in Hedge
Derivative Fair Value
|
|
|
Realized Gain (Loss)
Reclassified from OCI
into Revenue (a)
|
|
|
Change in Hedge
Derivative Fair Value
|
|
|
Realized Gain (Loss)
Reclassified from OCI
into Revenue (a)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps
|
$ | |
— |
|
|
$ | |
(33,311
|
)
|
|
$ | |
2,765 |
|
|
$ | |
18,204 |
|
|
$ | | |
125 |
|
|
$ | |
22,525 |
|
|
$ | | |
14,687 |
|
|
$ | | |
69,851 |
|
|
Put options
|
|
— |
|
|
|
(994
|
)
|
|
|
— |
|
|
|
(682
|
)
|
|
|
— |
|
|
|
(1,908
|
)
|
|
|
— |
|
|
|
(998
|
)
|
|
Collars
|
|
— |
|
|
|
(51,344
|
)
|
|
|
25,357 |
|
|
|
43,945 |
|
|
|
(7,015
|
)
|
|
|
32,704 |
|
|
|
83,630 |
|
|
|
128,823 |
|
|
Income taxes
|
|
— |
|
|
|
33,403 |
|
|
|
(10,967
|
)
|
|
|
(23,972
|
)
|
|
|
2,687 |
|
|
|
(21,780
|
)
|
|
|
(38,343
|
)
|
|
|
(76,805
|
)
|
|
|
$ | |
— |
|
|
$ | |
(52,246
|
)
|
|
$ | |
17,155 |
|
|
$ | |
37,495 |
|
|
$ | | |
(4,203
|
)
|
|
$ | |
31,541 |
|
|
$ | | |
59,974 |
|
|
$ | | |
120,871 |
|
(a) For realized gains upon derivative contract settlement, the reduction in AOCI is offset by an increase in revenues, NGLs and oil sales. For realized losses upon derivative contract settlement, the increase in AOCI is offset by a decrease in revenues. See additional discussion above regarding the discontinuance of hedge accounting.
|
| Effects of Non-Hedge Derivatives on Consolidated Statements of Operations |
The effects of our non-hedge derivatives (or those derivatives that do not qualify for hedge accounting) and the ineffective portion of our hedge derivatives on our consolidated statements of operations is summarized below (in thousands):
|
|
Three Months Ended September 30,
|
|
|
|
Gain (Loss) Recognized in
Income (Non‑hedge Derivatives)
|
|
|
Gain (Loss) Recognized in
Income (Ineffective Portion)
|
|
|
Derivative Fair Value
Income (Loss)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps
|
$ | |
(48,277
|
)
|
|
$ | |
(45,998
|
)
|
|
$ | |
(39
|
)
|
|
$ | |
(1,556
|
)
|
|
$ | |
(48,316
|
)
|
|
$ | |
(47,554
|
)
|
|
Re-purchased swaps
|
|
1,595 |
|
|
|
12,822 |
|
|
|
— |
|
|
|
— |
|
|
|
1,595 |
|
|
|
12,822 |
|
|
Collars
|
|
6,366 |
|
|
|
(1,714
|
)
|
|
|
— |
|
|
|
(2,163
|
)
|
|
|
6,366 |
|
|
|
(3,877
|
)
|
|
Call options
|
|
— |
|
|
|
(2,119
|
)
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,119
|
)
|
|
Total
|
$ | |
(40,316
|
)
|
|
$ | |
(37,009
|
)
|
|
$ | |
(39
|
)
|
|
$ | |
(3,719
|
)
|
|
$ | |
(40,355
|
)
|
|
$ | |
(40,728
|
)
|
|
|
Nine Months Ended September 30,
|
|
|
|
Gain (Loss) Recognized in
Income (Non‑hedge Derivatives)
|
|
|
Gain (Loss) Recognized in
Income (Ineffective Portion)
|
|
|
Derivative Fair Value
Income (Loss)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps
|
$ | |
(26,350
|
)
|
|
$ | |
30,330 |
|
|
$ | |
(2,034
|
)
|
|
$ | |
(890
|
)
|
|
$ | |
(28,384
|
)
|
|
$ | |
29,440 |
|
|
Re-purchased swaps
|
|
1,117 |
|
|
|
4,078 |
|
|
|
— |
|
|
|
— |
|
|
|
1,117 |
|
|
|
4,078 |
|
|
Collars
|
|
25,783 |
|
|
|
3,381 |
|
|
|
(896
|
)
|
|
|
(720
|
)
|
|
|
24,887 |
|
|
|
2,661 |
|
|
Call options
|
|
— |
|
|
|
10,829 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,829 |
|
|
Basis swaps
|
|
(90
|
)
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
(90
|
)
|
|
|
— |
|
|
Total
|
$ | |
460 |
|
|
$ | |
48,618 |
|
|
$ | |
(2,930
|
)
|
|
$ | |
(1,610
|
)
|
|
$ | |
(2,470
|
)
|
|
$ | |
47,008 |
|
|