Fair Value Measurements and Disclosures (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Our fixed-price swaps, basis swaps and physical purchases are included in Level 2 and our crude oil and natural gas collars, natural gas calls and physical sales are included in Level 3. The following table presents, for each applicable level within the fair value hierarchy, our derivative assets and liabilities, including both current and non-current portions, measured at fair value on a recurring basis:



	June 30, 2013						December 31, 2012
	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets:
Commodity-based derivative contracts	$	21,711	$	4,338	$	26,049	$	42,788	$	15,734	$	58,522
Basis protection derivative contracts	642		17		659		387		16		403
Total assets	22,353		4,355		26,708		43,175		15,750		58,925
Liabilities:
Commodity-based derivative contracts	7,497		451		7,948		9,839		2,081		11,920
Basis protection derivative contracts	2,229		—		2,229		16,656		—		16,656
Total liabilities	9,726		451		10,177		26,495		2,081		28,576
Net asset	$	12,627	$	3,904	$	16,531	$	16,680	$	13,669	$	30,349

Fair Value Assets and Liabilities Unobservable Input Reconciliation

The following table presents a reconciliation of our Level 3 assets measured at fair value:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)

Fair value, net asset, beginning of period	$	7,663		$	19,644		$	13,669		$	22,107
Changes in fair value included in statement of operations line item:
Commodity price risk management gain, net	2,834			13,737			103			15,153
Sales from natural gas marketing	22			(4		)	6			39
Changes in fair value included in balance sheet line item:
Accounts payable affiliates (1)	—			(94		)	—			(146		)
Settlements included in statement of operations line items:
Commodity price risk management loss, net	(2,246		)	(4,661		)	(5,479		)	(8,458		)
Sales from natural gas marketing	(3		)	(22		)	(29		)	(95		)
Income from discontinued operations, net of tax	(4,366		)	—			(4,366		)	—
Fair value, net asset end of period	$	3,904		$	28,600		$	3,904		$	28,600

Changes in unrealized gains (losses) relating to assets (liabilities) still held
as of year-end, included in statement of operations line item:
Commodity price risk management gain, net	$	(1,717	)	$	10,449		$	(3,652	)	$	8,661
Sales from natural gas marketing	22			(13		)	10			1
Total	$	(1,695	)	$	10,436		$	(3,642	)	$	8,662

__________


(1)	Represents the change in fair value related to derivative instruments entered into by us and designated to our affiliated partnerships.

Concentration of Risk

The following table presents the counterparties that expose us to credit risk as of June 30, 2013 with regard to our derivative assets:



Counterparty Name	Fair Value of Derivative Assets As of June 30, 2013
	(in thousands)

JPMorgan Chase Bank, N.A. (1)	$	9,730
Wells Fargo Bank, N.A. (1)	3,671
Natixis (1)	2,924
Bank of Nova Scotia (1)	2,680
Other lenders in our revolving credit facility	6,754
Various (2)	949
Total	$	26,708

__________

(1)Major lender in our revolving credit facility. See Note 7, Long-Term Debt.

(2)Represents a total of 23 counterparties.

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

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