(8) Price-Risk Management Activities

Derivatives are recorded on the balance sheet at fair value with changes in fair value recognized in earnings. The changes in the fair value of our derivatives are recognized in "Net gain (loss) on commodity derivatives" on the accompanying condensed consolidated statements of operations. We have a price-risk management policy to use derivative instruments to protect against declines in oil and natural gas prices, mainly through the purchase of commodity price swaps and collars as well as basis swaps.

During the three months ended June 30, 2018 and 2017, the Company recorded losses of $10.8 million and gains of $5.1 million, respectively, on its commodity derivatives. During the six months ended June 30, 2018 and 2017, the Company recorded losses of $17.1 million and gains of $16.1 million, respectively, on its commodity derivatives. The Company made net cash payments of $1.9 million and $2.6 million for settled derivative contracts during the six months ended June 30, 2018 and 2017, respectively.

At June 30, 2018 and December 31, 2017, we had less than $0.1 million and $2.2 million, respectively, in receivables for settled derivatives which were included on the accompanying condensed consolidated balance sheet in “Accounts receivable, net” and were subsequently collected in July 2018 and January 2018, respectively. At June 30, 2018 and December 31, 2017, we also had $1.6 million and $0.4 million, respectively, in payables for settled derivatives which were included on the accompanying condensed consolidated balance sheet in "Accounts payable and accrued liabilities" and were subsequently paid in July 2018 and January 2018, respectively.

The fair values of our derivatives are computed using commonly accepted industry-standard models and are periodically verified against quotes from brokers. At June 30, 2018, there was $1.8 million and $3.3 million in current and long-term unsettled derivative assets and $11.7 million and $5.4 million in current and long-term unsettled derivative liabilities, respectively. At December 31, 2017, there was $5.1 million and $2.6 million in current and long-term unsettled derivative assets and $5.1 million and $2.8 million in current and long-term unsettled derivative liabilities, respectively.

The Company uses an International Swap and Derivatives Association master agreement for our derivative contracts. This is an industry standardized contract containing the general conditions of our derivative transactions including provisions relating to netting derivative settlement payments under certain circumstances (such as default). For reporting purposes, the Company has elected to not offset the asset and liability fair value amounts of its derivatives on the accompanying balance sheets. Under the right of set-off, there was a $12.1 million net fair value liability at June 30, 2018 and a $0.1 million net fair value liability at December 31, 2017. For further discussion, related to the fair value of the Company's derivatives, refer to Note 9 of these condensed consolidated financial statements.

The following tables summarize the weighted average prices as well as future production volumes for our unsettled derivative contracts in place as of June 30, 2018:



Oil Derivative Swaps (NYMEX WTI Settlements)	Total Volumes (Bbls)	Weighted Average Price
2018 Contracts
3Q18	130,400	$	52.40
4Q18	122,800	$	52.23

2019 Contracts
1Q19	107,700	$	52.77
2Q19	103,200	$	52.72
3Q19	99,000	$	52.79
4Q19	95,000	$	52.73

2020 Contracts
1Q20	81,300	$	52.42
2Q20	77,850	$	52.38
3Q20	74,700	$	52.34
4Q20	72,000	$	52.29



Natural Gas Derivative Contracts (NYMEX Henry Hub Settlements)	Total Volumes (MMBtu)	Weighted Average Price
2018 Contracts
3Q18	7,666,000	$	2.88
4Q18	12,121,000	$	2.96

2019 Contracts
1Q19	7,516,000	$	3.08
2Q19	6,060,000	$	2.83
3Q19	5,550,000	$	2.84
4Q19	5,966,000	$	2.84

2020 Contracts
1Q20	5,370,000	$	2.83
2Q20	3,688,000	$	2.76
3Q20	3,585,000	$	2.76
4Q20	3,362,000	$	2.77



Natural Gas Basis Derivative Swap (East Texas Houston Ship Channel vs NYMEX Settlements)	Total Volumes (MMBtu)	Weighted Average Price
2018 Contracts
3Q18	7,595,000	$	(0.01	)
4Q18	11,850,000	$	(0.07	)

2019 Contracts
1Q19	11,310,000	$	(0.08	)
2Q19	11,975,000	$	0.04
3Q19	12,095,000	$	0.03
4Q19	12,095,000	$	(0.04	)

2020 Contracts
1Q20	1,820,000	$	(0.10	)
2Q20	1,820,000	$	(0.09	)
3Q20	1,840,000	$	(0.07	)
4Q20	1,840,000	$	(0.11	)

NGL Contracts

Total Volumes (Bbls)

Weighted Average Price