(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, primarily through the purchase of commodity price swaps and collars as well as basis swaps.

During the three months ended March 31, 2019 and 2018, the Company recorded losses of $4.0 million and $6.4 million, respectively, on its commodity derivatives. The Company collected cash payments of $1.1 million and $1.0 million for settled derivative contracts during the three months ended March 31, 2019 and 2018, respectively.

At March 31, 2019, there were $1.0 million receivables for settled derivatives while at December 31, 2018 we had $0.7 million in receivables for settled derivatives which were included on the accompanying condensed consolidated balance sheet in “Accounts receivable, net” and were subsequently collected in April 2019 and January 2019, respectively. At March 31, 2019 and December 31, 2018, we also had $0.2 million and $2.2 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 April 2019 and January 2019, respectively.

The fair values of our swap contracts are computed using observable market data while our collar contracts are valued using a Black-Scholes pricing model and are periodically verified against quotes from brokers. At March 31, 2019, there was $8.3 million and $4.0 million in current unsettled derivative assets and long-term unsettled derivative assets, respectively, and $4.6 million and $2.2 million in current and long-term unsettled derivative liabilities, respectively. At December 31, 2018, there was $15.3 million and $4.3 million in current and long-term unsettled derivative assets, respectively, and $2.8 million and $3.7 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 $5.6 million net fair value asset at March 31, 2019 and a $13.0 million net fair value asset at December 31, 2018. For further discussion, related to the fair value of the Company's derivatives, refer to Note 9 of these notes to condensed consolidated financial statements.

The following tables summarize the weighted average prices as well as future production volumes for our future derivative contracts in place as of March 31, 2019:



Oil Derivative Swaps (NYMEX WTI Settlements)	Total Volumes (Bbls)	Weighted Average Price
2019 Contracts
2Q19	157,450	$	57.30
3Q19	176,500	$	57.98
4Q19	172,500	$	58.07

2020 Contracts
1Q20	149,300	$	57.32
2Q20	100,350	$	56.38
3Q20	97,200	$	56.49
4Q20	72,000	$	52.29

2021 Contracts
1Q21	56,175	$	55.23



Natural Gas Derivative Contracts (NYMEX Henry Hub Settlements)	Total Volumes (MMBtu)	Weighted Average Price		Weighted Average Collar Floor		Weighted Average Collar Call Price
2019 Contracts
2Q19	12,130,000	$	2.80
3Q19	12,680,000	$	2.81
4Q19	11,486,000	$	2.89

2020 Contracts
1Q20	6,280,000	$	2.87
2Q20	3,688,000	$	2.76
3Q20	3,585,000	$	2.76
4Q20	3,362,000	$	2.77

Collar Contracts
2019 Contracts
2Q19	300,000			$	2.90	$	3.15

2021 Contracts
1Q21	4,354,800			$	2.50	$	3.52



NGL Contracts	Total Volumes (Bbls)	Weighted Average Price
2019 Contracts
2Q19	180,000	$	27.93
3Q19	180,000	$	27.93
4Q19	180,000	$	27.93



Natural Gas Basis Derivative Swap (East Texas Houston Ship Channel vs NYMEX Settlements)	Total Volumes (MMBtu)	Weighted Average Price
2019 Contracts
2Q19	14,477,500	$	0.05
3Q19	14,625,000	$	0.04
4Q19	14,625,000	$	(0.02	)

2020 Contracts
1Q20	11,739,000	$	(0.03	)
2Q20	11,739,000	$	(0.04	)
3Q20	11,868,000	$	(0.03	)
4Q20	11,868,000	$	(0.04	)

2021 Contracts
1Q21	7,200,000	$	(0.003	)
2Q21	7,280,000	$	(0.003	)
3Q21	7,360,000	$	(0.003	)
4Q21	7,360,000	$	(0.003	)



Oil Basis Contracts (Argus Cushing (WTI) and LLS Settlements)	Total Volumes (Bbls)	Weighted Average Price
2019 Contracts
2Q19	45,000	$	4.65
3Q19	45,000	$	4.65
4Q19	45,000	$	4.65