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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities [Abstract]

Location and fair value amounts of derivative instruments reported in balance sheet


Fair Value of Derivative Instruments at June 30, 2012
(in millions)
		Asset Derivatives						Liability Derivatives
Description		Balance Sheet Location		Fair Value				Balance Sheet Location		Fair Value
Commodity contracts		Current assets: Fair value of hedging contracts		$	61.2			Current liabilities: Fair value of hedging contracts			($—	)
		Long-term assets: Fair value of hedging contracts			42.0			Long-term liabilities: Fair value of hedging contracts			(0.4	)

				$	103.2						($0.4	)


Fair Value of Derivative Instruments at December 31, 2011
(in millions)
		Asset Derivatives						Liability Derivatives
Description		Balance Sheet Location		Fair Value				Balance Sheet Location		Fair Value
Commodity contracts		Current assets: Fair value of hedging contracts		$	25.2			Current liabilities: Fair value of hedging contracts		($	11.1	)
		Long-term assets: Fair value of hedging contracts			22.5			Long-term liabilities: Fair value of hedging contracts			(0.8	)

				$	47.7					($	11.9	)

Effect of Derivative Instruments in the statement of operations


The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended June 30, 2012 and 2011 (in millions)
Derivatives in Cash Flow Hedging Relationships		Amount of Gain (Loss) Recognized in OCI on Derivatives (a)								Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (b)										Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
		2012				2011				Location		2012				2011				Location		2012				2011
Commodity contracts		$	63.2			$	36.1			Operating revenue - oil/gas production		$	9.4			($	10.5	)		Derivative income, net		$	5.4			$	1.4

Total		$	63.2			$	36.1					$	9.4			($	10.5	)				$	5.4			$	1.4

(a)	Net of related tax effect of $38.1 million and $20.8 million for the three months ended June 30, 2012 and 2011, respectively.

(b)

For the three months ended June 30, 2012, effective hedging contracts increased oil revenue by $2.9 million and increased gas revenue by $6.5 million. For the three months ended June 30, 2011, effective hedging contracts decreased oil revenue by $14.3 million and increased gas revenue by $3.8 million.


The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended June 30, 2012 and 2011 (in millions)
Derivatives in Cash Flow Hedging Relationships		Amount of Gain (Loss) Recognized in OCI on Derivatives (a)								Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (b)										Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
		2012				2011				Location		2012				2011				Location		2012				2011
Commodity contracts		$	41.1			$	3.6			Operating revenue - oil/gas production		$	8.4			($	14.4	)		Derivative income (expense), net		$	4.9			($	0.8	)

Total		$	41.1			$	3.6					$	8.4			($	14.4	)				$	4.9			($	0.8	)

(a)	Net of related tax effect of $23.7 million and $2.1 million for the six months ended June 30, 2012 and 2011, respectively.

(b)	For the six months ended June 30, 2012, effective hedging contracts decreased oil revenue by $2.9 million and increased gas revenue by $11.3 million. For the six months ended June 30, 2011, effective hedging contracts decreased oil revenue by $22.8 million and increased gas revenue by $8.4 million.

Hedging Positions


		Fixed-Price Swaps NYMEX (except where noted)
		Natural Gas								Oil
		Daily Volume (MMBtus/d)				Swap Price ($)				Daily Volume (Bbls/d)				Swap Price ($)
2012			10,000				5.035				1,000				90.30
2012			10,000				5.040				1,000				90.41
2012			10,000				5.050				1,000				90.45
2012											1,000				95.50
2012											2,000				97.60
2012											1,000				98.15
2012											1,000				100.00
2012											1,000				101.55
2012											1,000				104.25
2012											1,000	†			111.02

2013			10,000				5.270				1,000				92.80
2013			10,000				5.320				1,000				94.45
2013											1,000				94.60
2013											1,000				97.15
2013											1,000				101.53
2013											1,000				103.00
2013											1,000				103.15
2013											1,000				104.25
2013											1,000				104.47
2013											1,000				104.50
2013											1,000	†			107.30

2014			10,000				4.000				1,000				90.06
2014											1,000				98.00
2014											1,000				98.30
2014											1,000				99.65
2014											1,000	†			103.30

2015			10,000				4.005

†	Brent oil contract

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

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