Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.3.0.814
Fair Value Measurements
9 Months Ended
Sep. 30, 2015
Fair Value Measurements [Abstract]  
Fair Value Measurements

Note 7 - Fair Value Measurements

 

The fair value hierarchy included in GAAP gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable, and these valuations have the lowest priority.

 

Fair Value of Financial Instruments

 

Cash, cash equivalents, and restricted investments. The carrying amounts for these instruments approximate fair value due to the short-term nature or maturity of the instruments.

 

Debt. The Company’s debt is recorded at the carrying amount in the consolidated balance sheet. The carrying amount of floating-rate debt approximated fair value because the interest rates were variable and reflective of market rates.

 

Assets and liabilities measured at fair value on a recurring basis

 

Certain assets and liabilities are reported at fair value on a recurring basis in the consolidated balance sheet. The following methods and assumptions were used to estimate fair value:

 

Commodity derivative instruments. The fair value of commodity derivative instruments is derived using an income approach valuation model that utilizes market-corroborated inputs that are observable over the term of the derivative contract. The Company’s fair value calculations also incorporate an estimate of the counterparties’ default risk for derivative assets and an estimate of the Company’s default risk for derivative liabilities. The Company believes that the majority of the inputs used to calculate the commodity derivative instruments fall within Level 2 of the fair value hierarchy based on the wide availability of quoted market prices for similar commodity derivative contracts. See Note 6 for additional information regarding the Company’s derivative instruments.

 

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Presentation as of September 30, 2015

 

Classification

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

Fair value of derivatives

 

Current assets

 

$

 

$

16,763 

 

$

 

$

16,763 

Other assets, net

 

Long-term assets

 

 

 

 

2,203 

 

 

 

 

2,203 

  Total net assets

 

 

 

$

 

$

18,966 

 

$

 

$

18,966 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Presentation as of December 31, 2014

 

Classification

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

Fair value of derivatives

 

Current assets

 

$

 

$

27,850 

 

$

 

$

27,850 

Fair value of derivatives

 

Current liabilities

 

 

 

 

(1,249)

 

 

 

 

(1,249)

  Total net assets

 

 

 

$

 

$

26,601 

 

$

 

$

26,601