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Derivative Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2013
Derivative Instruments and Hedging Activities |
Derivative Instruments and Hedging Activities | 6. Derivative Instruments and Hedging Activities The Company periodically enters into commodity derivative instruments to hedge its exposure to price fluctuations on natural gas and crude oil production. The Company's credit agreement restricts the ability of the Company to enter into commodity hedges other than to hedge or mitigate risks to which the Company has actual or projected exposure or as permitted under the Company's risk management policies and where such derivatives do not subject the Company to material speculative risks. All of the Company's derivatives are used for risk management purposes and are not held for trading purposes. As of December 31, 2013, the Company had the following outstanding commodity derivatives designated as hedging instruments:
|  |  |  |  |  | Collars |  | Swaps |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
|  |  |  |  |  | Floor |  | Ceiling |  |  |
Type of Contract |  | Volume |  | Contract Period |  | Range |  | Weighted- Average |  | Range |  | Weighted- Average |  | Weighted- Average |
Natural gas |  |  | 336.8Bcf |  | Jan. 2014 - Dec. 2014 |  | $3.60 - $4.37 |  | $ | 4.13 |  | $4.22 - $4.80 |  | $ | 4.51 |  |  |  |
Natural gas |  |  | 35.5Bcf |  | Jan. 2014 - Dec. 2014 |  |  |  |  |  |  |  |  |  |  |  | $ | 4.12 |
In the above table, natural gas prices are stated per Mcf. The change in fair value of derivatives designated as hedges that is effective is recorded in accumulated other comprehensive income in stockholders' equity in the Consolidated Balance Sheet. The ineffective portion of the change in the fair value of derivatives designated as hedges, and the change in fair value of derivatives not designated as hedges, are recorded currently in earnings as a component of natural gas revenue and crude oil and condensate revenue in the Consolidated Statement of Operations. The following tables reflect the fair value of derivative instruments on the Company's consolidated financial statements: Effect of Derivative Instruments on the Consolidated Balance Sheet
|  |  |  | Fair Values of Derivative Instruments |
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|  |  |  | Derivative Assets |  | Derivative Liabilities |
|  |  |  | December 31, |  | December 31, |
|  | Balance Sheet Location |
(In thousands) |  | 2013 |  | 2012 |  | 2013 |  | 2012 |
Commodity contracts |  | Derivative instruments (current assets) |  | $ | 3,019 |  | $ | 50,824 |  | $ | — |  | $ | — |
Commodity contracts |  | Derivative instruments (current liabilites) |  |  | — |  |  | — |  |  | 13,912 |  |  | 192 |
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|  |  |  | $ | 3,019 |  | $ | 50,824 |  | $ | 13,912 |  | $ | 192 |
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At December 31, 2013 and 2012, unrealized losses of $10.9 million ($6.6 million, net of tax) and $50.6 million ($30.7 million, net of tax), respectively, were recorded in accumulated other comprehensive income / (loss) in the Consolidated Balance Sheet. Based upon estimates at December 31, 2013, the Company expects to reclassify $6.6 million in after-tax losses associated with its commodity hedges from accumulated other comprehensive income / (loss) to the Consolidated Statement of Operations over the next 12 months. Offsetting of Derivative Assets and Liabilities in the Consolidated Balance Sheet
|  | Year Ended December 31, |
--- | --- | --- | ---
(In thousands) |  | 2013 |  | 2012 |
Derivative Assets |  |  |  |  |  |  |
Gross amounts of recognized assets |  | $ | 13,792 |  | $ | 54,454 |
Gross amounts offset in the statement of financial position |  |  | (10,773 | ) |  | (3,630 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net amounts of assets presented in the statement of financial position |  |  | 3,019 |  |  | 50,824 |
Gross amounts of financial instruments not offset in the statement of financial position |  |  | 373 |  |  | 1,892 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net amount |  | $ | 3,392 |  | $ | 52,716 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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Derivative Liabilities |  |  |  |  |  |  |
Gross amounts of recognized liabilities |  | $ | 24,685 |  | $ | 3,822 |
Gross amounts offset in the statement of financial position |  |  | (10,773 | ) |  | (3,630 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net amounts of liabilities presented in the statement of financial position |  |  | 13,912 |  |  | 192 |
Gross amounts of financial instruments not offset in the statement of financial position |  |  | — |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net amount |  | $ | 13,912 |  | $ | 192 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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Effect of Derivative Instruments on the Consolidated Statement of Operations Derivatives Designated as Hedging Instruments
|  | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) |
--- | --- | --- | ---
|  | Year Ended December 31, |
(In thousands) |  | 2013 |  | 2012 |  | 2011 |
Commodity contracts |  | $ | (4,523 | ) | $ | 88,705 |  | $ | 267,667 |
|  | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |
--- | --- | --- | ---
|  | Year Ended December 31, |
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (In thousands) |
| 2013 |  | 2012 |  | 2011 |
Natural gas revenues |  | $ | 52,733 |  | $ | 225,108 |  | $ | 84,937 |
Crude oil and condensate revenues |  |  | 4,269 |  |  | 11,218 |  |  | 1,403 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 57,002 |  | $ | 236,326 |  | $ | 86,340 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
For the years ended December 31, 2013, 2012 and 2011, respectively, there was no ineffectiveness recorded in the Company's Consolidated Statement of Operations related to its derivative instruments designated as hedges. Derivatives Not Designated as Hedging Instruments
|  |  |  | Year Ended December 31, |
--- | --- | --- | --- | --- | ---
|  | Location of Gain (Loss) Recognized in Income on Derivative |
(In thousands) |  | 2013 |  | 2012 |  | 2011 |
Commodity contracts |  | Natural gas revenues |  | $ | — |  | $ | (494 | ) | $ | (965 | )
Additional Disclosures about Derivative Instruments and Hedging Activities The use of derivative instruments involves the risk that the counterparties will be unable to meet their obligation under the agreement. The Company enters into derivative contracts with multiple counterparties in order to limit its exposure to individual counterparties. The Company also has netting arrangements with all of its counterparties that allow it to offset assets and liabilities from separate derivative contracts with that counterparty. Certain counterparties to the Company's derivative instruments are also lenders under its credit facility. The Company's credit facility and derivative instruments contain certain cross default and acceleration provisions that may require immediate payment of its derivative liabilities in certain situations.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708773-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624258-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80748-113994 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41620-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624177-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5580258-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 + Details
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