Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2012

Net derivative liabilities measured at fair value on a recurring basis



(in millions)	Total		Level 1		Level 2		Level 3
Commodity derivative liability, net
March 31, 2012	$	63.5	$	—	$	63.5	$	—
December 31, 2011	$	22.7	$	—	$	22.7	$	—

Changes in Level 3 fair value measurements



	Three Months Ended March 31,
(in millions)	2012		2011
Fair value liability, beginning of period	$	—	$	101.8
Transfers out of Level 3(1)	—		(101.8		)
Realized and unrealized (gain) loss included in earnings	—		—
Settlements	—		—
Fair value liability, end of period	$	—	$	—
Total unrealized (gain) loss included in earnings related to financial assets and liabilities still on the Condensed Balance Sheets at March 30, 2012 and 2011	$	—	$	—

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(1)	During the first quarter of 2011, the inputs used to value oil collars, natural gas collars and natural gas basis swaps were directly or indirectly observable, and these instruments were transferred to level 2.

Schedule of fair values and carrying amounts of debt instruments



March 31, 2012	Carrying Amount		Estimated Fair Value
(in millions)			Level 1		Level 2		Level 3		Total
Cash and cash equivalents(1)	$	44	$	44	$	—	$	—	$	44
Senior secured revolving credit facility(2)	—		—		—		—		—
8.25% Senior subordinated notes due 2016	200		209		—		—		209
10.25% Senior notes due 2014(3)	355		409		—		—		409
6.75% Senior notes due 2020	300		319		—		—		319
6.375% Senior notes due 2022	600		618		—		—		618
	$	1,499	$	1,599	$	—	$	—	$	1,599

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(1)	Consists primarily of money market mutual funds.

(2)

The Company's secured revolving credit facility can be repaid at any time without penalty. Interest is generally fixed for 30-day increments at the prime rate or LIBOR plus a stipulated margin for the amount utilized and at a stipulated percentage as a commitment fee for the portion not utilized. The Company uses a market approach to ensure the terms of its credit facility are in line with market rates for similar credit facilities, which are considered to be level 2 inputs.


(3)	Carrying amount does not include unamortized discount of $6.0 million.



December 31, 2011
(in millions)	Carrying Amount		Estimated Fair Value
Senior secured revolving credit facility	532		532
8.25% Senior subordinated notes due 2016	200		209
10.25% Senior notes due 2014(1)	355		402
6.75% Senior notes due 2020	300		302
	$	1,387	$	1,445

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(1)	Carrying amount does not include unamortized discount of $6.6 million.

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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