DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The table below sets forth Forest’s outstanding commodity swaps as of June 30, 2012.



Commodity Swaps
	Natural Gas (NYMEX HH)			Oil (NYMEX WTI)			NGL (OPIS Refined Products)
Remaining Term	Bbtu Per Day	Weighted Average Hedged Price per MMBtu		Barrels Per Day	Weighted Average Hedged Price per Bbl		Barrels Per Day	Weighted Average Hedged Price per Bbl
July 2012 - December 2012⁽¹⁾	155	$	4.63	4,500	$	97.26	2,000	$	45.22
Calendar 2013	160	3.98		—	—		—	—

____________________________________________

(1)

50 Bbtu per day of 2012 gas swaps with a weighted average hedged price per MMBtu of $5.30 are layered with a written put of $3.53 and a call spread of $4.00 to $4.50. Together with the put and call spread, Forest will receive the $5.30 swap price on 50 Bbtu per day except as follows: Forest will receive (i) NYMEX HH plus $1.77 when NYMEX HH is below $3.53; (ii) $5.30 plus the value of the call spread when NYMEX HH is between $4.00 and $4.50; and (iii) $5.80 when NYMEX HH is $4.50 or above.

Schedule of outstanding commodity options

The table below sets forth key provisions of the outstanding options as of June 30, 2012. (As of July 25, 2012, none of the options in the table have been exercised by the counterparties.)



Commodity Options
		Natural Gas (NYMEX HH)			Oil (NYMEX WTI)
Underlying Term	Option Expiration	Underlying Bbtu Per Day	Underlying Hedged Price per MMBtu		Underlying Barrels Per Day	Underlying Hedged Price per Bbl
Gas Swaptions:
Calendar 2013	December 2012	30	$	4.02	—	$	—
Calendar 2013	December 2012	10	4.01		—	—
Oil Swaptions:
Calendar 2013	December 2012	—	—		2,000	100.00
Calendar 2013	December 2012	—	—		3,000	95.00
Calendar 2014	December 2013	—	—		2,000	110.00
Calendar 2014	December 2013	—	—		1,000	109.00
Calendar 2014	December 2013	—	—		2,000	100.00
Oil Put Options:
Monthly July - Dec 2012	Monthly July - Dec 2012	—	—		5,000	75.00

Schedule of outstanding fixed-to-floating interest rate swaps

The table below sets forth Forest’s outstanding fixed-to-floating interest rate swaps as of June 30, 2012.



Interest Rate Swaps
Remaining Term	Notional Amount (In Thousands)		Weighted Average Floating Rate	Weighted Average Fixed Rate
July 2012 - February 2014	$	500,000	1 month LIBOR + 5.89%	8.50	%

Summary of location and fair value amounts of derivative instruments reported in the Condensed Consolidated Balance Sheets

The table below summarizes the location and fair value amounts of Forest’s derivative instruments reported in the Condensed Consolidated Balance Sheets as of the dates indicated. These derivative instruments are not designated as hedging instruments for accounting purposes. For financial reporting purposes, Forest does not offset asset and liability fair value amounts recognized for derivative instruments with the same counterparty under its master netting arrangements. See Note 7 to the Condensed Consolidated Financial Statements for more information on the fair values of Forest’s derivative instruments.



	June 30, 2012		December 31, 2011
	(In Thousands)
Current assets:
Commodity derivatives:
Derivative instruments	$	74,699	$	79,487
Interest rate derivatives:
Derivative instruments	10,846		10,134
Total current assets	$	85,545	$	89,621
Long-term assets:
Commodity derivatives:
Derivative instruments	$	8,831	$	—
Interest rate derivatives:
Derivative instruments	6,561		10,422
Total long-term assets	$	15,392	$	10,422
Current liabilities:
Commodity derivatives:
Derivative instruments	$	16,670	$	28,944
Long-term liabilities:
Commodity derivatives:
Derivative instruments	$	7,745	$	—

Summary of the amount of derivative instrument gains and losses reported in the condensed consolidated statements of operations

The table below summarizes the amount of derivative instrument gains and losses reported in the Condensed Consolidated Statements of Operations as net realized and unrealized (gains) losses on derivative instruments for the periods indicated. These derivative instruments are not designated as hedging instruments for accounting purposes.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(In Thousands)
Commodity derivatives:
Realized gains	$	(31,067	)	$	(2,271	)	$	(52,395	)	$	(12,839	)
Unrealized (gains) losses	(2,126		)	(30,586		)	(8,572		)	15,772
Interest rate derivatives:
Realized gains	(2,837		)	(2,872		)	(5,721		)	(5,842		)
Unrealized losses (gains)	2,015			(5,188		)	3,149			(1,762		)
Realized and unrealized gains on derivative instruments, net	$	(34,015	)	$	(40,917	)	$	(63,539	)	$	(4,671	)

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References+ Details

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References+ Details