Earnings Per Share (Policies)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Earning Per Share

Because it is management’s stated intention to redeem the principal amount of our 1 ³⁄₄% Senior Convertible Notes due 2017 (the “2017 Convertible Notes”) (see Note 4 – Long-Term Debt) in cash, we have used the treasury method for determining dilution in the diluted earnings per share computation. For the three months ended March 31, 2015, there was no dilutive effect on the diluted earnings per share computation because we had a net loss for such period. For the three months ended March 31, 2014, the average price of our common stock was less than the effective conversion price for such notes, resulting in no dilutive effect on the diluted earnings per share computation for such period. For the three months ended March 31, 2015 and 2014, the average price of our common stock was less than the strike price of the Sold Warrants (as defined in Note 4 – Long-Term Debt) and therefore, such warrants were not dilutive for such periods. Based on the terms of the Purchased Call Options (as defined in Note 4 – Long-Term Debt), such call options are antidilutive and therefore, were not included in the calculation of diluted earnings per share.

Derivative Instruments and Hedging Activities

The nature of a derivative instrument must be evaluated to determine if it qualifies as a hedging instrument. If the instrument qualifies as a hedging instrument, it is recorded as either an asset or liability measured at fair value and subsequent changes in the derivative’s fair value are recognized in stockholders’ equity through other comprehensive income (loss), net of related taxes, to the extent the hedge is considered effective. Monthly settlements of effective hedges are reflected in revenue from oil and gas production and cash flows from operating activities. Instruments not qualifying as hedging instruments are recorded in our balance sheet at fair value, and changes in fair value are recognized in earnings through derivative expense (income). Monthly settlements of ineffective hedges and derivative instruments not qualifying as hedging instruments are recognized in earnings through derivative expense (income) and cash flows from operating activities.