Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2013

Location and Fair Value Amounts of Derivative Instruments Reported in Balance Sheet

The following tables disclose the location and fair value amounts of derivative instruments reported in our balance sheet at March 31, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at March 31, 2013
(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	$	18.7	Current liabilities: Fair value of hedging contracts	($	5.4	)
	Long-term assets: Fair value of hedging contracts		6.8	Long-term liabilities: Fair value of hedging contracts		(3.0	)
		$	25.5		($	8.4	)

Fair Value of Derivative Instruments at December 31, 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	$	39.7	Current liabilities: Fair value of hedging contracts	($	0.1	)
	Long-term assets: Fair value of hedging contracts		9.2	Long-term liabilities: Fair value of hedging contracts		(1.5	)
		$	48.9		($	1.6	)

Effect of Derivative Instruments in Statement of Operations

The following table discloses the effect of derivative instruments in the statement of operations for the three-month periods ended March 31, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended March 31, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives (a)						Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (b)						Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013			2012			Location	2013		2012			Location	2013			2012
Commodity contracts	($	12.9	)	($	22.7	)	Operating revenue—oil/gas production	$	5.4	($	0.6	)	Derivative income (expense), net	($	1.2	)	($	0.5	)
Total	($	12.9	)	($	22.7	)		$	5.4	($	0.6	)		($	1.2	)	($	0.5	)

(a) Net of related tax effect of ($7.4) million and ($12.8) million for the three months ended March 31, 2013 and 2012, respectively.

(b) Net of related tax effect of ($3.1) million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively. For the three months ended March 31, 2013, effective hedging contracts increased oil revenue by $4.5 million and increased gas revenue by $4.0 million. For the three months ended March 31, 2012, effective hedging contracts decreased oil revenue by $5.8 million and increased gas revenue by $4.8 million.

Impact of Rights of Offset Associated with Recognized Assets and Liabilities

The following presents the potential impact of the rights of offset associated with our recognized assets and liabilities at March 31, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	18.7		($	5.7	)	$	13.0
Long-term assets: Fair value of hedging contracts		6.8			(2.0	)		4.8
Current liabilities: Fair value of hedging contracts		(5.4	)		4.7			(0.7	)
Long-term liabilities: Fair value of hedging contracts		(3.0	)		3.0			—

Hedging Positions

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of May 2, 2013:

	Fixed-Price Swaps NYMEX (except where noted)
	Natural Gas					Oil
	Daily Volume (MMBtus/d)			Swap Price ($)		Daily  Volume (Bbls/d)			Swap Price ($)
2013		10,000			4.000		2,000	(a)		92.35
2013		10,000	(b)		4.050		1,000			92.80
2013		20,000	(a)		4.450		2,000	(c)		94.05
2013		10,000			5.270		1,000			94.45
2013		10,000			5.320		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	(d)		107.30
2014		10,000			4.000		1,000			90.06
2014		10,000			4.040		1,000			93.55
2014		10,000			4.105		1,000			94.00
2014		10,000			4.190		1,000			98.00
2014		10,000			4.250		1,000			98.30
2014		10,000			4.350		1,000			99.65
2014							1,000	(d)		103.30
2015		10,000			4.005		1,000			90.00
2015		10,000			4.220
2015		10,000			4.255

(a) July through December

(b) April through December

(c) January through June

(d) Brent oil contract