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Derivative instruments
 6 Months Ended
Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Derivative instruments
The Company's policy allows the use of derivative instruments as part of an overall energy price, foreign currency and interest rate risk management program to efficiently manage and minimize commodity price, foreign currency and interest rate risk. As of June 30, 2015, the Company had no outstanding foreign currency or interest rate hedges.

The fair value of derivative instruments must be estimated as of the end of each reporting period and is recorded on the Consolidated Balance Sheets as an asset or a liability.

Fidelity
At June 30, 2015 and 2014, and December 31, 2014, Fidelity held oil swap agreements with total forward notional volumes of 1.1 million, 2.5 million and 270,000 Bbl, respectively, and natural gas swap agreements with total forward notional volumes of 1.8 million, 11.0 million and 5.0 million MMBtu, respectively. Fidelity utilizes these derivative instruments to manage a portion of the market risk associated with fluctuations in the price of oil and natural gas on its forecasted sales of oil and natural gas production. The gains and losses on the commodity derivative instruments held by Fidelity are included in income (loss) from discontinued operations and the associated assets and liabilities are classified as held for sale.

Effective April 1, 2013, Fidelity elected to de-designate all commodity derivative contracts previously designated as cash flow hedges and elected to discontinue hedge accounting prospectively for all of its commodity derivative instruments. When the criteria for hedge accounting is not met or when hedge accounting is not elected, realized gains and losses and unrealized gains and losses are on the Consolidated Statements of Income. As a result of discontinuing hedge accounting on commodity derivative instruments, gains and losses on the oil and natural gas derivative instruments remained in accumulated other comprehensive income (loss) as of the de-designation date and were reclassified into earnings in future periods as the underlying hedged transactions affected earnings.

Prior to April 1, 2013, changes in the fair value attributable to the effective portion of the hedging instruments, net of tax, were recorded in stockholders' equity as a component of accumulated other comprehensive income (loss). To the extent that the hedges were not effective or did not qualify for hedge accounting, the ineffective portion of the changes in fair market value was recorded directly in earnings. Gains and losses on the oil and natural gas derivative instruments were reclassified from accumulated other comprehensive income (loss) into income (loss) from discontinued operations on the Consolidated Statements of Income at the date the oil and natural gas quantities were settled.

Certain of Fidelity's derivative instruments contain cross-default provisions that state if Fidelity or any of its affiliates fails to make payment with respect to certain indebtedness, in excess of specified amounts, the counterparties could require early settlement or termination of the derivative instruments in liability positions. The aggregate fair value of Fidelity's derivative instruments with credit-risk related contingent features that were in a liability position at June 30, 2015 and 2014, were $3.5 million and $17.4 million, respectively. Fidelity had no derivative instruments that were in a liability position with credit-risk-related contingent features at December 31, 2014. The aggregate fair value of assets that would have been needed to settle the instruments immediately if the credit-risk-related contingent features were triggered on June 30, 2015 and 2014, were $3.5 million and $17.4 million, respectively.

Centennial
Centennial has historically entered into interest rate derivative instruments to manage a portion of its interest rate exposure on the forecasted issuance of long-term debt. As of June 30, 2015 and 2014, and December 31, 2014, Centennial had no outstanding interest rate swap agreements.

Fidelity and Centennial
The gains and losses on derivative instruments were as follows:
 
Three Months Ended
Six Months Ended
 
June 30,
June 30,
 
2015
2014
2015
2014
 
(In thousands)
Commodity derivatives designated as cash flow hedges:
 
 
 
 
Amount of (gain) loss reclassified from accumulated other comprehensive loss into discontinued operations (effective portion), net of tax
$
—

$
(87
)
$
—

$
158

 
 
 
 
 
Interest rate derivatives designated as cash flow hedges:
 
 
 
 
Amount of loss reclassified from accumulated other comprehensive loss into interest expense (effective portion), net of tax
100

100

199

199

 
 
 
 
 
Commodity derivatives not designated as hedging instruments:
 
 
 
 
Amount of loss recognized in discontinued operations, before tax
(8,101
)
(5,196
)
(19,309
)
(11,908
)


Over the next 12 months net losses of approximately $400,000 (after tax) are estimated to be reclassified from accumulated other comprehensive income (loss) into earnings, as the hedged transactions affect earnings.

The location and fair value of the gross amount of the Company's derivative instruments on the Consolidated Balance Sheets were as follows:
Asset
Derivatives
Location on
Consolidated
Balance Sheets
Fair Value at June 30, 2015
Fair Value at June 30, 2014
Fair Value at December 31, 2014
 
 
(In thousands)
Not designated as hedges:
 

 
 
Commodity derivatives
Current assets held for sale
$
2,537

$
129

$
18,335

 
Noncurrent assets held for sale
—

131

—

Total asset derivatives
 
$
2,537

$
260

$
18,335


Liability
Derivatives
Location on
Consolidated
Balance Sheets
Fair Value at June 30, 2015
Fair Value at June 30, 2014
Fair Value at December 31, 2014
 
 
(In thousands)
Not designated as hedges:
 

 

 

Commodity derivatives
Current liabilities held for sale
$
3,511

$
17,449

$
—

Total liability derivatives
 
$
3,511

$
17,449

$
—



All of the Company's commodity derivative instruments at June 30, 2015 and 2014, and December 31, 2014, were subject to legally enforceable master netting agreements. However, the Company's policy is to not offset fair value amounts for derivative instruments and, as a result, the Company's derivative assets and liabilities are presented gross on the Consolidated Balance Sheets. The gross derivative assets and liabilities (excluding settlement receivables and payables that may be subject to the same master netting agreements) presented on the Consolidated Balance Sheets and the amount eligible for offset under the master netting agreements is presented in the following table:
June 30, 2015
Gross Amounts Recognized on the Consolidated Balance Sheets
Gross Amounts Not Offset on the Consolidated Balance Sheets
Net
 
(In thousands)
Assets:
 
 
 
Commodity derivatives
$
2,537

$
(2,537
)
$
—

Total assets
$
2,537

$
(2,537
)
$
—

Liabilities:
 
 

Commodity derivatives
$
3,511

$
(2,537
)
$
974

Total liabilities
$
3,511

$
(2,537
)
$
974


June 30, 2014
Gross Amounts Recognized on the Consolidated Balance Sheets
Gross Amounts Not Offset on the Consolidated Balance Sheets
Net
 
(In thousands)
Assets:
 
 
 
Commodity derivatives
$
260

$
(260
)
$
—

Total assets
$
260

$
(260
)
$
—

Liabilities:
 
 
 
Commodity derivatives
$
17,449

$
(260
)
$
17,189

Total liabilities
$
17,449

$
(260
)
$
17,189


December 31, 2014
Gross Amounts Recognized on the Consolidated Balance Sheets
Gross Amounts Not Offset on the Consolidated Balance Sheets
Net
 
(In thousands)
Assets:
 
 
 
Commodity derivatives
$
18,335

$
—

$
18,335

Total assets
$
18,335

$
—

$
18,335