Annual report pursuant to Section 13 and 15(d)

Derivative Instruments and Hedging Activities (Tables)

v2.4.0.8
Derivative Instruments and Hedging Activities (Tables)
12 Months Ended
Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table reflects the fair values of the Company’s derivative instruments for the periods presented (none of which were designated as hedging instruments under ASC 815):
 
 
Balance Sheet Presentation
 
Asset Fair Value
 
Liability Fair Value
 
Net Derivative Fair Value
Commodity
 
Classification
 
Line Description
 
12/31/13
 
12/31/12
 
12/31/13
 
12/31/12
 
12/31/13
 
12/31/12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as Hedging Instruments under ASC 815
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Natural gas
 
Current
 
Fair market value of derivatives
 
$
60

 
$

 
$

 
$
(125
)
 
$
60

 
$
(125
)
Natural gas
 
Non-current
 
Other long-term liabilities
 

 

 
(72
)
 
(116
)
 
(72
)
 
(116
)
Oil
 
Current
 
Fair market value of derivatives
 

 
1,674

 
(1,036
)
 

 
(1,036
)
 
1,674

Oil
 
Non-current
 
Other long-term assets
 

 
250

 

 

 

 
250

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Totals
 
 
 
$
60

 
$
1,924

 
$
(1,108
)
 
$
(241
)
 
$
(1,048
)
 
$
1,683

The following presents the impact of this presentation to the Company’s recognized assets and liabilities at December 31, 2013:
 
 
Presented without
 
 
 
As Presented with
 
 
Effects of Netting
 
Effects of Netting
 
Effects of Netting
Current assets: Fair value of hedging contracts
 
$
8

 
$
52

 
$
60

Long-term assets: Fair value of hedging contracts
 

 

 

Current liabilities: Fair value of hedging contracts
 
1,088

 
(52
)
 
1,036

Long-term liabilities: Fair value of hedging contracts
 
(72
)
 

 
(72
)
Schedule of Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance
Derivatives not designated as hedging instruments under ASC 815

For the periods indicated, the Company recorded the following related to its derivative instruments that were not designated as accounting hedges and are recorded in the Statement of Operations as gain or loss on derivative contracts:
 
For the year ended December 31,
 
2013
 
2012
 
2011
Natural gas derivatives
 
 
 
 
 
     Net (loss) gain on derivatives, settled
$
(147
)
 
$
34

 
$

     Net gain (loss) on derivatives, net of settlements
229

 
(241
)
 

          Subtotal gain (loss), net
$
82

 
$
(207
)
 
$

 
 
 
 
 
 
Oil derivatives
 
 
 
 
 
     Net gain, on derivatives, settled
$
1,518

 
$

 
$

     Net (loss) gain on derivatives, net of settlements
(2,960
)
 
1,924

 

          Subtotal (loss) gain, net
$
(1,442
)
 
$
1,924

 
$

 
 
 
 
 
 
Total (loss) gain on derivative instruments included in Statement of Operations
$
(1,360
)
 
$
1,717

 
$

Schedule of Derivatives Designated as Hedging Instruments, Gain (Loss) in Statement of Financial Performance
Derivatives designated as hedging instruments under ASC 815

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations as an increase (decrease) to oil and natural gas sales for the effective portion and as an increase (decrease) to other (income) expense for the ineffective portion and amounts excluded from effectiveness testing:
 
For the year ended December 31,
 
2013
 
2012
 
2011
Amount of gain (loss) reclassified from OCI into income (effective portion)
$

 
$
1,420

 
$
(375
)
Amount of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)

 

 

Schedule of Outstanding Oil and Natural Gas Derivative Contracts
Listed in the table below are the outstanding oil and natural gas derivative contracts as of December 31, 2013:
Commodity
 
Instrument
 
Average Notional Volumes per Month
 
Quantity Type
 
Put/Call Price
 
Fixed-Price Swap
 
Period
 
Designation under ASC 815
 
 
Natural gas
 
Call Option
 
38
 
MMBtu
 
$
4.75

 
n/a

 
Jan14 - Mar14
 
Not Designated
 
 
Natural gas
 
Swap
 
60
 
MMBtu
 
n/a

 
$
4.36

 
Jan14 - Mar14
 
Not Designated
 
 
Natural gas
 
Call Option
 
38
 
MMBtu
 
$
4.75

 
n/a

 
Jan14 - Dec14
 
Not Designated
 
(a)
Oil
 
Swap
 
30
 
Bbls
 
n/a

 
$
93.35

 
Jan14 - Dec14
 
Not Designated
 
 
Oil
 
Put Option
 
30
 
Bbls
 
$
70.00

 
n/a

 
Jan14 - Dec14
 
Not Designated
 
 
Oil
 
Swap
 
9
 
Bbls
 
n/a

 
$
94.58

 
Jan14 - Dec14
 
Not Designated
 
 
Natural gas
 
Swap
 
46
 
MMBtu
 
n/a

 
$
4.25

 
Apr14 - Dec14
 
Not Designated
 
 
Natural gas
 
Call Option
 
38
 
MMBtu
 
$
4.75

 
n/a

 
Apr14 - Dec14
 
Not Designated
 
 
Natural gas
 
Call Option
 
37
 
MMBtu
 
$
5.00

 
n/a

 
Jan15 - Dec15
 
Not Designated
 
 

(a)
The short natural gas call option, when combined with the Company’s long production position, represents a “covered call,” and creates a $4.75/MMbtu ceiling during the covered period.

Subsequent Event Activity:

Derivative contracts executed subsequent to December 31, 2013 include the following:
Commodity
 
Instrument
 
Average Notional Volumes per Month
 
Quantity Type
 
Put/Call Price
 
Fixed-Price Swap
 
Period
 
Designation under ASC 815
Oil
 
Swap
 
15
 
Bbls
 
n/a
 
$
94.15

 
Feb14 - Mar14
 
Not Designated
Oil
 
Swap
 
15
 
Bbls
 
n/a
 
$
92.80

 
Apr14 - Jun14
 
Not Designated
Oil
 
Swap
 
15
 
Bbls
 
n/a
 
$
90.40

 
Jul14 - Sep14
 
Not Designated
Oil
 
Swap
 
15
 
Bbls
 
n/a
 
$
88.64

 
Oct14 - Dec14
 
Not Designated