Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)

v2.4.0.8
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)
6 Months Ended
Jun. 30, 2014
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT [Abstract]  
Open Commodity Swap Contracts
The following table reflects open commodity swap contracts as of June 30, 2014, the associated volumes and the corresponding fixed price.

Settlement Period
 
Oil (Barrels)
   
Fixed Price
 
Swaps-Crude Oil
           
07/01/14 – 12/31/14
    120,000       91.65  
07/01/14 – 12/31/14
    232,500       88.55  
07/01/14 – 12/31/14
    232,500       88.60  
07/01/14 – 12/31/14
    232,500       88.40  
07/01/14 – 12/31/14
    232,500       88.50  
07/01/14 – 12/31/14
    60,000       91.35  
07/01/14 – 12/31/14
    60,000       90.00  
07/01/14 – 12/31/14
    120,000       90.15  
07/01/14 – 12/31/14
    120,000       91.00  
07/01/14 – 12/31/14
    60,000       93.00  
07/01/14 – 12/31/14
    120,000       90.00  
07/01/14 – 12/31/14
    120,000       90.00  
07/01/14 – 12/31/14
    120,000       93.50  
07/01/14 – 12/31/14
    30,000       90.58  
07/01/14 – 06/30/15
    420,000       89.15  
01/01/15 – 06/30/15
    60,000       90.50  
01/01/15 – 06/30/15
    180,000       88.55  
01/01/15 – 06/30/15
    180,000       88.00  
01/01/15 – 06/30/15
    60,000       90.75  
01/01/15 – 06/30/15
    60,000       90.25  
01/01/15 – 06/30/15
    90,000       89.00  
01/01/15 – 06/30/15
    90,000       89.00  
01/01/15 – 12/31/15
    720,000       89.00  
01/01/15 – 12/31/15
    360,000       89.00  
01/01/15 – 12/31/15
    360,000       89.02  
01/01/15 – 12/31/15
    180,000       89.00  
01/01/15 – 12/31/15
    180,000       89.00  
07/01/15 – 12/31/15(1)
    180,000       90.75  
07/01/15 – 12/31/15(1)
    180,000       91.00  
07/01/15 – 12/31/15(1)
    180,000       91.25  
07/01/15 – 06/30/16
    360,000       89.00  
07/01/15 – 06/30/16
    360,000       90.00  
07/01/15 – 06/30/16
    360,000       91.00  
01/01/16 – 06/30/16
    180,000       90.00  
01/01/16 – 06/30/16
    90,000       90.00  
01/01/16 – 06/30/16
    90,000       90.00  
_________________
 
(1)
The Company has entered into crude oil derivative contracts that give counterparties the option to extend certain current derivative contracts for an additional six-month period.  Options covering a notional volume of 90,000 barrels per month are exercisable on or about December 31, 2015.  If the counterparties exercise all such options, the notional volume of the Company’s existing crude oil derivative contracts will increase by 90,000 barrels per month at an average price of $91.00 per barrel for each month during the period January 1, 2016 through June 30, 2016.
Schedule of weighted average price of open commodity derivative contracts
The following table reflects the weighted average price of open commodity swap derivative contracts as of June 30, 2014, by year with associated volumes.

Weighted Average Price
Of Open Commodity Swap Contracts
 
Year
 
Volumes (Bbl)
   
Weighted
Average Price
 
2014
    1,920,000     $ 89.79  
2015
    3,960,000       89.43  
2016
    900,000       90.00  
Open costless collar futures agreements
In addition to the open commodity swap contracts, the Company has entered into costless collar contracts.  The costless collars are used to establish floor and ceiling prices on anticipated crude oil production.  There were no premiums paid or received by the Company related to the costless collar contracts.  The following table reflects open costless collar contracts as of June 30, 2014.

Term
 
Oil (Barrels)
   
Floor/Ceiling Price
 
Basis
Costless Collars – Crude Oil
             
07/01/14 – 12/31/14
    120,000     $ 90.00/$99.05  
NYMEX
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, 2014 and December 31, 2013, respectively.  Certain amounts may be presented on a net basis on the financial statements when such amounts are with the same counterparty and subject to a master netting arrangement:

Type of Contract
 
Balance Sheet Location
 
June 30, 2014
Estimated
Fair Value
   
December 31, 2013 Estimated
Fair Value
 
Derivative Assets:
               
Swap Contracts
 
Current Assets
  $ -     $ 62,890  
Swap Contracts
 
Non-Current Assets
    -       1,745,405  
Total Derivative Assets
      $ -     $ 1,808,295  
                     
Derivative Liabilities:
                   
Swap Contracts
 
Current Liabilities
  $ (44,452,095 )   $ (19,111,820 )
Swap Contracts
 
Non-Current Liabilities
    (12,389,078 )     (637,208 )
Costless Collars
 
Current Liabilities
    (657,912 )     (7,826 )
Swaption Contracts
 
Non-Current Liabilities
    (3,616,689 )     -  
Total Derivative Liabilities
      $ (61,115,774 )   $ (19,756,854 )
Reconciliation between gross assets and liabilities and the amounts reflected on balance sheet
The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.
   
Estimated Fair Value at June 30, 2014
 
   
Gross Amounts of Recognized Assets
   
Gross Amounts Offset in the Balance Sheet
   
Net Amounts of Assets Presented in the Balance Sheet
 
                   
Offsetting of Derivative Assets:
       
Current Assets
  $ -     $ -     $ -  
Non-Current Assets
    -       -       -  
Total Derivative Assets
  $ -     $ -     $ -  
                         
Offsetting of Derivative Liabilities:
         
Current Liabilities
  $ (45,110,007 )   $ -     $ (45,110,007 )
Non-Current Liabilities
    (16,005,767 )     -       (16,005,767 )
Total Derivative Liabilities
  $ (61,115,774 )   $ -     $ (61,115,774 )
                         

   
Estimated Fair Value at December 31, 2013
 
   
Gross Amounts of Recognized Assets
   
Gross Amounts Offset in the Balance Sheet
   
Net Amounts of Assets Presented in the Balance Sheet
 
                   
Offsetting of Derivative Assets:
       
Current Assets
  $ 629,178     $ (566,288 )   $ 62,890  
Non-Current Assets
    2,589,079       (843,674 )     1,745,405  
Total Derivative Assets
  $ 3,218,257     $ (1,409,962 )   $ 1,808,295  
                         
Offsetting of Derivative Liabilities:
         
Current Liabilities
  $ (19,685,934 )   $ 566,288     $ (19,119,646 )
Non-Current Liabilities
    (1,480,882 )     843,674       (637,208 )
Total Derivative Liabilities
  $ (21,166,816 )   $ 1,409,962     $ (19,756,854 )