XML 28 R17.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Derivative Activities | 3 Months Ended
--- | ---
Mar. 31, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivative Activities | (12) DERIVATIVE ACTIVITIES We use commodity-based derivative contracts to manage exposure to commodity price fluctuations. We do not enter into these arrangements for speculative or trading purposes. We typically do not utilize complex derivatives, as we utilize commodity swaps or options to (1) reduce the effect of price volatility of the commodities we produce and sell and (2) support our annual capital budget and expenditure plans. The fair value of our derivative contracts, represented by the estimated amount that would be realized upon termination, based on a comparison of the contract price and a reference price, generally the New York Mercantile Exchange (“NYMEX”) for natural gas and crude oil or Mont Belvieu for NGLs, approximated a net asset of $8.8 million at March 31, 2017. These contracts expire monthly through December 2019. The following table sets forth our commodity-based derivative volumes by year as of March 31, 2017, excluding our basis and freight swaps which are discussed separately below:
Period |  | Contract Type |  | Volume Hedged |  | Weighted Average Hedge Price
Natural Gas |  |  |  |  |  |
2017 |  | Swaps (1) |  | 844,245 Mmbtu/day |  | $ 3.19
2018 |  | Swaps |  | 417,260 Mmbtu/day |  | $ 3.25
2017 |  | Collars (1) |  | 123,818 Mmbtu/day |  | $ 3.46–$ 4.12
2018 |  | Collars |  | 7,397 Mmbtu/day |  | $ 3.40–$ 3.75
2017 |  | Purchased Puts (1) |  | 178,909 Mmbtu/day |  | $ 3.49 (2)
2017 |  | Sold Calls |  | 9,041 Mmbtu/day |  | $ 3.75 (3)
Crude Oil |  |  |  |  |  |
2017 |  | Swaps (1) |  | 8,782 bbls/day |  | $ 56.00
2018 |  | Swaps |  | 3,500 bbls/day |  | $ 53.81
2019 |  | Swaps |  | 250 bbls/day |  | $ 51.00
NGLs (C2-Ethane) |  |  |  |  |  |
2017 |  | Swaps |  | 3,000 bbls/day |  | $ 0.27/gallon
2018 |  | Swaps |  | 124 bbls/day |  | $ 0.29/gallon
NGLs (C3-Propane) |  |  |  |  |  |
2017 |  | Swaps |  | 13,895 bbls/day |  | $ 0.57/gallon
2018 |  | Swaps |  | 7,199 bbls/day |  | $0.65/gallon
NGLs (NC4-Normal Butane) |  |  |  |  |  |
2017 |  | Swaps |  | 7,750 bbls/day |  | $ 0.74/gallon
2018 |  | Swaps |  | 4,250 bbls/day |  | $ 0.81/gallon
NGLs (C5-Natural Gasoline) |  |  |  |  |  |
2017 |  | Swaps |  | 5,250 bbls/day |  | $ 1.06/gallon
2018 |  | Swaps |  | 1,500 bbls/day |  | $ 1.19/gallon
(1) Includes derivative instruments assumed in connection with the MRD Merger. (2) Weighted average deferred premium is ($0.32). (3) Weighted average deferred premium is $0.31. Every derivative instrument is required to be recorded on the balance sheet as either an asset or a liability measured at its fair value. If the derivative does not qualify as a hedge or is not designated as a hedge, changes in fair value of these non-hedge derivatives are recognized in earnings as derivative fair value income or loss. Basis Swap Contracts In addition to the swaps above, at March 31, 2017, we had natural gas basis swap contracts which lock in the differential between NYMEX and certain of our physical pricing indices primarily in Appalachia. These contracts settle monthly through October 2018 and include a total volume of 68,830,000 Mmbtu. The fair value of these contracts was a loss of $20.4 million on March 31, 2017. At March 31, 2017, we also had propane spread swap contracts which lock in the differential between Mont Belvieu and international propane indices. The contracts settle monthly through December 2018 and include a total volume of 1,641,000 barrels in 2017 and 750,000 barrels in 2018. The fair value of these contracts was a gain of $491,000 on March 31, 2017. Freight Swap Contracts In connection with our international propane spread swaps, at March 31, 2017, we had freight swap contracts which lock in the freight rate for a specific trade route on the Baltic Exchange. These contracts settle monthly in fourth quarter 2017 through December 2018 and cover 5,000 metric tons per month with a fair value gain of $116,000 on March 31, 2017. Derivative Assets and Liabilities The combined fair value of derivatives included in the accompanying consolidated balance sheets as of March 31, 2017 and December 31, 2016 is summarized below. The assets and liabilities are netted where derivatives with both gain and loss positions are held by a single counterparty and we have master netting arrangements. The tables below provide additional information relating to our master netting arrangements with our derivative counterparties (in thousands):
|  |  | March 31, 2017 |
|  |  | Gross Amounts of Recognized Assets |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of Assets Presented in the Balance Sheet |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | 28,756 |  |  | $ | (19,019 | ) |  | $ | 9,737 |
| –basis swaps |  |  | 905 |  |  |  | (3,330 | ) |  |  | (2,425 | )
| –collars |  |  | 9,650 |  |  |  | (1,435 | ) |  |  | 8,215 |
| –puts |  |  | 19,563 |  |  |  | (4,609 | ) |  |  | 14,954 |
| –calls |  |  | — |  |  |  | (531 | ) |  |  | (531 | )
Crude oil | –swaps |  |  | 14,026 |  |  |  | (1,532 | ) |  |  | 12,494 |
NGLs | –C2 ethane swaps |  |  | 507 |  |  |  | (251 | ) |  |  | 256 |
| –C3 propane swaps |  |  | 4,531 |  |  |  | (4,892 | ) |  |  | (361 | )
| –C3 propane spread swaps |  |  | 11,812 |  |  |  | (11,812 | ) |  |  | — |
| –NC4 butane swaps |  |  | 6,970 |  |  |  | (3,258 | ) |  |  | 3,712 |
| –C5 natural gasoline swaps |  |  | 2,405 |  |  |  | (2,211 | ) |  |  | 194 |
Freight | –swaps |  |  | 116 |  |  |  | (116 | ) |  |  | — |
|  |  | $ | 99,241 |  |  | $ | (52,996 | ) |  | $ | 46,245 |
|  |  | March 31, 2017 |
|  |  | Gross Amounts of Recognized (Liabilities) |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of (Liabilities) Presented in the Balance Sheet |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | (55,204 | ) |  | $ | 19,019 |  |  | $ | (36,185 | )
| –basis swaps |  |  | (21,287 | ) |  |  | 3,330 |  |  |  | (17,957 | )
| –collars |  |  | — |  |  |  | 1,435 |  |  |  | 1,435 |
| –puts |  |  | — |  |  |  | 4,609 |  |  |  | 4,609 |
| –calls |  |  | (531 | ) |  |  | 531 |  |  |  | — |
Crude oil | –swaps |  |  | (1,308 | ) |  |  | 1,532 |  |  |  | 224 |
NGLs | –C2 ethane swaps |  |  | (137 | ) |  |  | 251 |  |  |  | 114 |
| –C3 propane swaps |  |  | (12,164 | ) |  |  | 4,892 |  |  |  | (7,272 | )
| –C3 propane spread swaps |  |  | (11,321 | ) |  |  | 11,812 |  |  |  | 491 |
| –NC4 butane swaps |  |  | (3,395 | ) |  |  | 3,258 |  |  |  | (137 | )
| –C5 natural gasoline swaps |  |  | (4,877 | ) |  |  | 2,211 |  |  |  | (2,666 | )
Freight | –swaps |  |  | — |  |  |  | 116 |  |  |  | 116 |
|  |  | $ | (110,224 | ) |  | $ | 52,996 |  |  | $ | (57,228 | )
|  |  | December 31, 2016 |
|  |  | Gross Amounts of Recognized Assets |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of Assets Presented in the Balance Sheet |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | 13,213 |  |  | $ | (11,425 | ) |  | $ | 1,788 |
| –basis swaps |  |  | 12,535 |  |  |  | (9,437 | ) |  |  | 3,098 |
| –collars |  |  | 6,298 |  |  |  | (6,298 | ) |  |  | — |
| –puts |  |  | 18,159 |  |  |  | (15,429 | ) |  |  | 2,730 |
Crude oil | –swaps |  |  | 9,356 |  |  |  | (3,489 | ) |  |  | 5,867 |
NGLs | –C2 ethane swaps |  |  | 53 |  |  |  | (53 | ) |  |  | — |
| –C3 propane spread swaps |  |  | 17,396 |  |  |  | (17,396 | ) |  |  | — |
| –NC4 butane swaps |  |  | 4 |  |  |  | (4 | ) |  |  | — |
Freight | –swaps |  |  | 65 |  |  |  | (65 | ) |  |  | — |
|  |  | $ | 77,079 |  |  | $ | (63,596 | ) |  | $ | 13,483 |
|  |  | December 31, 2016 |
|  |  | Gross Amounts of Recognized (Liabilities) |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of (Liabilities) Presented in the Balance Sheet |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas | –swaps |  | $ | (158,359 | ) |  | $ | 11,425 |  |  | $ | (146,934 | )
| –basis swaps |  |  | (687 | ) |  |  | 9,437 |  |  |  | 8,750 |
| –collars |  |  | (2,625 | ) |  |  | 6,298 |  |  |  | 3,673 |
| –puts |  |  | — |  |  |  | 15,429 |  |  |  | 15,429 |
| –calls |  |  | (1,041 | ) |  |  | — |  |  |  | (1,041 | )
Crude oil | –swaps |  |  | (13,206 | ) |  |  | 3,489 |  |  |  | (9,717 | )
NGLs | –C2 ethane swaps |  |  | (1,008 | ) |  |  | 53 |  |  |  | (955 | )
| –C3 propane swaps |  |  | (32,437 | ) |  |  | — |  |  |  | (32,437 | )
| –C3 propane spread swaps |  |  | (18,138 | ) |  |  | 17,396 |  |  |  | (742 | )
| –NC4 butane swaps |  |  | (13,419 | ) |  |  | 4 |  |  |  | (13,415 | )
| –C5 natural gasoline swaps |  |  | (12,176 | ) |  |  | — |  |  |  | (12,176 | )
Freight | –swaps |  |  | — |  |  |  | 65 |  |  |  | 65 |
|  |  | $ | (253,096 | ) |  | $ | 63,596 |  |  | $ | (189,500 | )
The effects of our derivatives on our consolidated statements of operations are summarized below (in thousands):
|  | Three Months Ended March 31, |  |
|  | Derivative Fair Value Income (Loss) |  |
| 2017 |  |  |  | 2016 |  |
Commodity swaps | $ | 166,752 |  |  | $ | 79,644 |  |
Collars |  | 9,475 |  |  |  | — |  |
Puts |  | 6,707 |  |  |  | — |  |
Calls |  | 510 |  |  |  | — |  |
Basis swaps |  | (17,972 | ) |  |  | 7,275 |  |
Freight swaps |  | 85 |  |  |  | (11 | ) |
Total | $ | 165,557 |  |  | $ | 86,908 |  |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 2: 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=64837297&loc=SL5624171-113959 Reference 3: 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=64837297&loc=d3e41620-113959 Reference 4: 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=64837297&loc=SL5624163-113959 Reference 5: 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=64837297&loc=SL5579240-113959 Reference 6: 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=64837297&loc=SL5624177-113959 Reference 7: 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=35736893&loc=d3e80784-113994 Reference 8: 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=64837297&loc=d3e41641-113959 Reference 9: 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=64837297&loc=SL5579245-113959 Reference 10: 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=64837297&loc=SL5624258-113959 Reference 11: 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=35736893&loc=d3e80748-113994 Reference 12: 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=64837297&loc=SL5708775-113959 Reference 13: 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=64837297&loc=SL5708773-113959 Reference 14: 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=64837297&loc=SL5618551-113959 Reference 15: 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=64837297&loc=SL5580258-113959 Reference 16: 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=64837297&loc=SL5624181-113959 Reference 17: 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 18: 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=64837297&loc=d3e41638-113959 Reference 19: 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 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration