Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table illustrates our derivative positions for calendar years 2014, 2015 and 2016 as of November 3, 2014:


	Fixed-Price Swaps (NYMEX, except where noted)
	Natural Gas					Oil
	Daily Volume (MMBtus/d)			Swap Price ($)		Daily Volume (Bbls/d)			Swap Price ($)
2014		10,000			4.000		1,000			90.06
2014		10,000			4.040		1,000	(a)		90.25
2014		10,000			4.105		1,000			92.25
2014		10,000			4.190		1,000			93.55
2014		10,000	(b)		4.250		1,000			94.00
2014		10,000			4.250		1,000			98.00
2014		10,000			4.350		1,000			98.30
2014							2,000	(c)		98.85
2014							1,000			99.65
2014							1,000	(d)		103.30
2015		10,000			4.005		1,000			89.00
2015		10,000			4.120		1,000			90.00
2015		10,000			4.150		1,000			90.25
2015		10,000			4.165		1,000			90.40
2015		10,000			4.220		1,000			91.05
2015		10,000			4.255		1,000			93.28
2015							1,000			93.37
2015							1,000			94.85
2015							1,000			95.00
2016		10,000			4.110		1,000			90.00
2016		10,000			4.120

(a)	October through December

(b)	February through December

(c)	January through June

(d)	Brent crude oil contract

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

The following tables disclose the location and fair value amounts of derivatives qualifying as hedging instruments, as reported in our balance sheet, at September 30, 2014 and December 31, 2013:


Fair Value of Derivatives Qualifying as Hedging Instruments at September 30, 2014
(In millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of derivative contracts	$	15.4	Current liabilities: Fair value of derivative contracts	$	0.2
	Long-term assets: Fair value of derivative contracts		6.3	Long-term liabilities: Fair value of derivative contracts		—

		$	21.7		$	0.2


Fair Value of Derivatives Qualifying as Hedging Instruments at December 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 derivative contracts	$	4.5	Current liabilities: Fair value of derivative contracts	$	7.8
	Long-term assets: Fair value of derivative contracts		1.4	Long-term liabilities: Fair value of derivative contracts		0.5

		$	5.9		$	8.3

Before Tax Effect of Derivative Instruments in Statement of Operations

The following tables disclose the before tax effect of derivatives qualifying as hedging instruments, as reported in the statement of operations, for the three and nine month periods ended September 30, 2014 and 2013:


Effect of Derivatives Qualifying as Hedging Instruments on the Statement of Operations for the Three Months Ended September 30, 2014 and 2013 (In millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives					Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)							Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2014		2013			Location	2014			2013			Location	2014		2013
Commodity contracts	$	47.1	($	30.8	)	Operating revenue—oil/gas production	($	1.3	)	($	2.1	)	Derivative (expense) income, net	$	2.1	($	1.7	)

Total	$	47.1	($	30.8	)		($	1.3	)	($	2.1	)		$	2.1	($	1.7	)

(a)

For the three months ended September 30, 2014, effective hedging contracts decreased oil revenue by $1.3 million and had a minimal effect on gas revenue. For the three months ended September 30, 2013, effective hedging contracts decreased oil revenue by $7.5 million and increased gas revenue by $5.4 million.


Effect of Derivatives Qualifying as Hedging Instruments on the Statement of Operations for the Nine Months Ended September 30, 2014 and 2013 (In millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives					Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)						Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2014		2013			Location	2014			2013		Location	2014		2013
Commodity contracts	$	3.7	($	20.9	)	Operating revenue—oil/gas production	($	17.6	)	$	13.8	Derivative (expense) income, net	$	0.5	($	1.5	)

Total	$	3.7	($	20.9	)		($	17.6	)	$	13.8		$	0.5	($	1.5	)

(a)

For the nine months ended September 30, 2014, effective hedging contracts decreased oil revenue by $10.0 million and decreased gas revenue by $7.6 million. For the nine months ended September 30, 2013, effective hedging contracts increased oil revenue by $2.4 million and increased gas revenue by $11.4 million.

Location and Fair Value Amounts of Derivative Instruments Not Qualifying as Hedging Instruments Reported in Balance Sheet

The following table discloses the location and fair value amounts of our derivatives not qualifying as hedging instruments, as reported in our balance sheet, at September 30, 2014. All of our derivatives at December 31, 2013 qualified as hedging instruments.


Fair Value of Derivatives Not Qualifying as Hedging Instruments at September 30, 2014 (In millions)
Description	Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of derivative contracts	$	1.2
	Long-term assets: Fair value of derivative contracts		0.2

		$	1.4

Gains or Losses Related to Changes in Fair Value and Cash Settlements on Derivatives Not Qualifying as Hedging Instruments

Gains or losses related to changes in fair value and cash settlements for derivatives not qualifying as hedging instruments are recorded as derivative income (expense) in the statement of operations. The following table discloses the before tax effect of our derivatives not qualifying as hedging instruments on the statement of operations for the three and nine month periods ended September 30, 2014:


Amount of Gain Recognized in Derivative Income (In millions)
Description	Three Months Ended September 30, 2014		Nine Months Ended September 30, 2014
Commodity contracts:
Cash settlements	$	0.7	$	0.7
Change in fair value		3.0		1.5

Total gains on non-qualifying hedges	$	3.7	$	2.2

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 September 30, 2014 (in millions):


	As Presented Without Netting			Effects of Netting			With Effects of Netting
Current assets: Fair value of derivative contracts	$	16.6		($	0.2	)	$	16.4
Long-term assets: Fair value of derivative contracts		6.5			—			6.5
Current liabilities: Fair value of derivative contracts		(0.2	)		0.2			—
Long-term liabilities: Fair value of derivative contracts		—			—			—