Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company periodically enters into commodity derivatives to manage its exposure to price fluctuations on natural gas and crude oil production. All of the Company’s derivatives are used for risk management purposes and are not held for trading purposes. The Company also has netting arrangements with each of its counterparties that allow it to offset assets and liabilities from separate derivative contracts with that counterparty.

Through March 31, 2014, the Company elected to designate its commodity derivatives as cash flow hedges for accounting purposes. Effective April 1, 2014, the Company elected to discontinue hedge accounting for its commodity derivatives on a prospective basis. As a result of discontinuing hedge accounting, the unrealized loss included in accumulated other comprehensive income (loss) as of April 1, 2014 of $73.4 million ($44.2 million net of tax) was frozen and reclassified into natural gas and crude oil and condensate revenues in the Condensed Consolidated Statement of Operations throughout the remainder of 2014 as the underlying hedged transactions occurred. As ofJune 30, 2015andDecember 31, 2014, there werenogains or losses deferred in accumulated other comprehensive income (loss) associated with the Company's commodity derivatives.

As of June 30, 2015, the Company had the following outstanding commodity derivatives:

				Collars						Swaps
				Floor			Ceiling
Type of Contract	Volume		Contract Period	Range	Weighted-Average		Range	Weighted- Average		Weighted- Average
Natural gas	35.7	Bcf	Jul. 2015 - Dec. 2015	$3.86 - $3.91	$	3.87	$4.27 - $4.43	$	4.35
Natural gas	35.7	Bcf	Jul. 2015 - Dec. 2015							$	3.92
Natural gas	17.9	Bcf	Jul. 2015 - Oct. 2015							$	3.36

In the table above, natural gas prices are stated per Mcf.

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet

		Fair Values of Derivative Instruments
		Derivative Assets				Derivative Liabilities
(In thousands)	Balance Sheet Location	June 30, 2015		December 31, 2014		June 30, 2015		December 31, 2014
Commodity contracts	Derivative instruments (current assets)	$	76,178	$	137,603	$	—	$	—

Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet

(In thousands)	June 30, 2015		December 31, 2014
Derivative Assets
Gross amounts of recognized assets	$	76,178	$	137,603
Gross amounts offset in the statement of financial position	—		—
Net amounts of assets presented in the statement of financial position	76,178		137,603
Gross amounts of financial instruments not offset in the statement of financial position	—		2,338
Net amount	$	76,178	$	139,941

Effect of Derivative Instruments on Accumulated Other Comprehensive Income (Loss)

The amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivatives (effective portion) is as follows:

	Three Months Ended   June 30,				Six Months Ended   June 30,
(In thousands)	2015		2014		2015		2014
Commodity contracts	$	—	$	—	$	—	$	(133,310	)

The amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) is as follows:

	Three Months Ended   June 30,					Six Months Ended   June 30,
(In thousands)	2015		2014			2015		2014
Natural gas revenues	$	—	$	(22,320	)	$	—	$	(92,877	)
Crude oil and condensate revenues	—		(636		)	—		(854		)
	$	—	$	(22,956	)	$	—	$	(93,731	)

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

	Three Months Ended   June 30,						Six Months Ended   June 30,
(In thousands)	2015			2014			2015			2014
Derivatives Designated as Hedges
Cash received (paid) on settlement of derivative instruments
Natural gas	$	—		$	—		$	—		$	(70,557	)
Crude oil and condensate	—			—			—			(218		)
	$	—		$	—		$	—		$	(70,775	)
Derivatives Not Designated as Hedges
Cash received (paid) on settlement of derivative instruments
Natural gas	$	—		$	(22,320	)	$	—		$	(22,320	)
Crude oil and condensate	—			(636		)	—			(636		)
Gain (loss) on derivative instruments	51,045			(15,262		)	88,730			(15,262		)
Non-cash gain (loss) on derivative instruments
Gain (loss) on derivative instruments	(57,864		)	12,933			(61,426		)	12,933
	$	(6,819	)	$	(25,285	)	$	27,304		$	(25,285	)
	$	(6,819	)	$	(25,285	)	$	27,304		$	(96,060	)

For the three and six months ended June 30, 2014, there was no ineffectiveness recorded in the Condensed Consolidated Statement of Operations related to derivative instruments designated as cash flow hedges. In addition, the Company has not incurred any losses related to non-performance risk of its counterparties and does not anticipate any material impact on its financial results due to non-performance by third parties.