Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)

v3.19.2
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)
6 Months Ended
Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of non-cash gains or losses on derivative contracts
The following table presents cash settlements on matured or liquidated derivative instruments and non-cash gains and losses on open derivative instruments for the periods presented.  Cash receipts and payments below reflect proceeds received upon early liquidation of derivative positions and gains or losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price of matured contracts.  Non-cash gains and losses below represent the change in fair value of derivative instruments which continue to be held at period-end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured or were liquidated during the period.

  Three Months Ended
June 30,
Six Months Ended
June 30,
(In thousands) 2019 2018 2019 2018
Cash Received (Paid) on Settled Derivatives $ 4,734  $ (12,267) $ 17,280  $ (20,397)
Non-Cash Mark-to-Market Gain (Loss) on Derivatives 31,857  (29,936) (120,311) (42,077)
Gain (Loss) on Derivative Instruments, Net $ 36,591  $ (42,203) $ (103,031) $ (62,474)
Schedule of weighted average price of open commodity derivative contracts The following table reflects the weighted average price of open commodity price swap derivative contracts as of June 30, 2019, by year with associated volumes.
Year Volumes (Bbl) Weighted
Average Price ($)
2019  4,164,280  $ 62.96 
2020  7,848,330  59.31 
2021  2,906,350  57.96 
2022 and beyond  500,000  55.06 
Schedule of derivatives The following table reflects open commodity basis swap contracts as of June 30, 2019.
Settlement Period Total Volumes (Bbls) Weighted
Average Differential ($/Bbl)
07/01/19 – 12/31/19 1,840,000  $ (2.41)
Derivatives instruments balance sheet location
The following table sets forth the amounts, on a gross basis, and classification of the Company’s outstanding derivative financial instruments at June 30, 2019 and December 31, 2018, respectively.  Certain amounts may be presented on a net basis on the condensed financial statements when such amounts are with the same counterparty and subject to a master netting arrangement.
Type of Crude Oil Contract Balance Sheet Location June 30, 2019 Estimated Fair Value December 31, 2018 Estimated Fair Value
Derivative Assets:   (In thousands)
Swap Price Contracts Current Assets $ 32,411  $ 108,514 
Basis Swap Contracts Current Assets 120  7,356 
Swap Price Contracts Noncurrent Assets 26,610  61,843 
Total Derivative Assets   $ 59,141  $ 177,713 
Derivative Liabilities:      
Swap Price Contracts Current Liabilities $ (95) $ — 
Swap Price Contracts Noncurrent Liabilities (1,644) — 
Total Derivative Liabilities   $ (1,739) $ — 

The use of derivative transactions involves the risk that the counterparties will be unable to meet the financial terms of such transactions.  When the Company has netting arrangements with its counterparties that provide for offsetting payables against receivables from separate derivative instruments these assets and liabilities are netted on the balance sheet.  The tables presented below provide reconciliation between the gross assets and liabilities and the amounts reflected on the balance sheet.  The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.

  Estimated Fair Value at June 30, 2019
(In thousands) Gross Amounts of
Recognized Assets (Liabilities)
Gross Amounts Offset
in the Balance Sheet
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:  
Current Assets $ 44,830  $ (12,299) $ 32,531 
Noncurrent Assets 28,580  (1,970) 26,610 
Total Derivative Assets $ 73,410  $ (14,269) $ 59,141 
Offsetting of Derivative Liabilities:  
Current Liabilities $ (12,394) $ 12,299  $ (95)
Noncurrent Liabilities (3,614) 1,970  (1,644)
Total Derivative Liabilities $ (16,008) $ 14,269  $ (1,739)
  Estimated Fair Value at December 31, 2018
 (In thousands) Gross Amounts of
Recognized Assets (Liabilities)
Gross Amounts Offset
in the Balance Sheet
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:  
Current Assets $ 116,620  $ (750) $ 115,870 
Non-Current Assets 61,857  (14) 61,843 
Total Derivative Assets $ 178,477  $ (764) $ 177,713 
Offsetting of Derivative Liabilities:  
Current Liabilities $ (750) $ 750  $ — 
Non-Current Liabilities (14) 14  — 
Total Derivative Liabilities $ (764) $ 764  $ —