DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2012

DERIVATIVE FINANCIAL INSTRUMENTS [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

DERIVATIVE FINANCIAL INSTRUMENTS

As of March 31, 2012, we had derivative instruments in place for a portion of our anticipated production through 2015 for a total of 72,997 BBtu of natural gas and 3,134 MBbls of crude oil.

The following table presents the location and fair value amounts of our derivative instruments on the balance sheets. These derivative instruments were comprised of commodity floors, collars and swaps, basis protection swaps and physical sales and purchases.

			Fair Value
Derivatives instruments not designated as hedges (1):		Balance sheet line item	March 31, 2012		December 31, 2011
			(in thousands)
Derivative assets:	Current
	Commodity contracts
	Related to natural gas and crude oil sales	Fair value of derivatives	$	64,099	$	51,220
	Related to affiliated partnerships (2)	Fair value of derivatives	8,959		8,018
	Related to natural gas marketing	Fair value of derivatives	1,691		1,528
	Basis protection contracts
	Related to natural gas marketing	Fair value of derivatives	29		43
			74,778		60,809
	Non Current
	Commodity contracts
	Related to natural gas and crude oil sales	Fair value of derivatives	31,514		34,938
	Related to affiliated partnerships (2)	Fair value of derivatives	5,207		6,134
	Related to natural gas marketing	Fair value of derivatives	11		103
	Basis protection contracts
	Related to natural gas marketing	Fair value of derivatives	19		—
			36,751		41,175
Total derivative assets			$	111,529	$	101,984
Derivative liabilities:	Current
	Commodity contracts
	Related to natural gas and crude oil sales	Fair value of derivatives	$	10,492	$	7,498
	Related to affiliated partnerships (3)	Fair value of derivatives	276		211
	Related to natural gas marketing	Fair value of derivatives	1,585		1,384
	Basis protection contracts
	Related to natural gas and crude oil sales	Fair value of derivatives	15,166		15,762
	Related to affiliated partnerships (3)	Fair value of derivatives	2,992		3,116
	Related to natural gas marketing	Fair value of derivatives	2		3
			30,513		27,974
	Non Current
	Commodity contracts
	Related to natural gas and crude oil sales	Fair value of derivatives	13,378		4,357
	Related to affiliated partnerships (3)	Fair value of derivatives	123		113
	Related to natural gas marketing	Fair value of derivatives	7		93
	Basis protection contracts
	Related to natural gas and crude oil sales	Fair value of derivatives	10,281		13,820
	Related to affiliated partnerships (3)	Fair value of derivatives	2,024		2,723
	Related to natural gas marketing	Fair value of derivatives	2		—
			25,815		21,106
Total derivative liabilities			$	56,328	$	49,080

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(1) As of March 31, 2012, and December 31, 2011, none of our derivative instruments were designated as hedges.

(2) Represents derivative positions designated to our affiliated partnerships; accordingly, our accompanying balance sheets include a corresponding payable to our affiliated partnerships representing their proportionate share of the derivative assets.

(3) Represents derivative positions designated to our affiliated partnerships; accordingly, our accompanying balance sheets include a corresponding receivable from our affiliated partnerships representing their proportionate share of the derivative liabilities.

The following table presents the impact of our derivative instruments on our statements of operations.

	Three Months Ended March 31,
	2012									2011
Statement of operations line item	Reclassification of Realized Gains (Losses) Included in Prior Periods Unrealized			Realized and Unrealized Gains (Losses) For the Current Period			Total			Reclassification of Realized Gains (Losses) Included in Prior Periods Unrealized			Realized and Unrealized Gains (Losses) For the Current Period			Total
	(in thousands)
Commodity price risk management gain, net
Realized gains	$	8,628		$	1,299		$	9,927		$	3,322		$	466		$	3,788
Unrealized gains (losses)	(8,628		)	10,202			1,574			(3,322		)	(24,348		)	(27,670		)
Total commodity price risk management gain (loss), net	$	—		$	11,501		$	11,501		$	—		$	(23,882	)	$	(23,882	)
Sales from natural gas marketing
Realized gains	$	684		$	109		$	793		$	1,007		$	135		$	1,142
Unrealized gains (losses)	(684		)	759			75			(1,007		)	(10		)	(1,017		)
Total sales from natural gas marketing	$	—		$	868		$	868		$	—		$	125		$	125
Cost of natural gas marketing
Realized losses	$	(591	)	$	(154	)	$	(745	)	$	(770	)	$	(190	)	$	(960	)
Unrealized gains (losses)	591			(707		)	(116		)	770			172			942
Total cost of natural gas marketing	$	—		$	(861	)	$	(861	)	$	—		$	(18	)	$	(18	)

Derivative Counterparties. A significant portion of our liquidity is concentrated in derivative instruments that enable us to manage a portion of our exposure to price volatility from producing natural gas and crude oil. These arrangements expose us to credit risk of nonperformance by our counterparties. We primarily use financial institutions, who are also major lenders in our credit facility agreement, as counterparties to our derivative contracts. To date, we have had no counterparty default losses. We have evaluated the credit risk of our derivative assets from our counterparties using relevant credit market default rates, giving consideration to amounts outstanding for each counterparty and the duration of each outstanding derivative position. Based on our evaluation, the impact of the nonperformance of our counterparties on the fair value of our derivative instruments is not significant.

The following table presents the counterparties that expose us to credit risk as of March 31, 2012, with regard to our derivative assets.

Counterparty Name	Fair Value of Derivative Assets As of March 31, 2012
	(in thousands)
JPMorgan Chase Bank, N.A. (1)	$	55,769
Crèdit Agricole CIB (1)	19,441
Wells Fargo Bank, N.A. (1)	20,099
Other lenders in our credit facility	16,135
Various (2)	85
Total	$	111,529

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(1)Major lender in our credit facility, see Note 7.

(2)Represents a total of 10 counterparties.