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Derivative Instruments (Tables) | 12 Months Ended
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Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Schedule of open fixed price swap positions | Below is a summary of the Company's open fixed price swap positions as of December 31, 2020.
| Index |  | Daily Volume (MMBtu/day) |  | Weighted Average Price
2021 | NYMEX Henry Hub |  | 410,000 |  |  | $ | 2.75 |
The Company entered into costless collars based off the NYMEX Henry Hub natural gas index. Each two-way price collar has a set floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, the Company will cash-settle the difference with the counterparty.
| Index |  | Daily Volume (MMBtu/day) |  | Weighted Average Floor/Ceiling Price
2021 | NYMEX Henry Hub |  | 250,000 |  |  | $2.46/$2.81
2022 | NYMEX Henry Hub |  | 20,000 |  |  | $2.80/$3.40
In the third quarter of 2019, the Company sold call options in exchange for a premium, and used the associated premiums received to enhance the fixed price for a portion of the fixed price natural gas swaps primarily for 2020. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.
| Index |  | Daily Volume (MMBtu/day) |  | Weighted Average Price
2022 | NYMEX Henry Hub |  | 153,000 |  |  | $ | 2.90 |
2023 | NYMEX Henry Hub |  | 628,000 |  |  | $ | 2.90 |
Schedule of natural gas basis swap positions | As of December 31, 2020, the Company had the following natural gas basis swap positions open:
| Gulfport Pays |  | Gulfport Receives |  | Daily Volume (MMBtu/day) |  | Weighted Average Fixed Spread
2021 | Rex Zone 3 |  | NYMEX Plus Fixed Spread |  | 35,000 |  |  | $ | (0.21) |
2021 | Tetco M2 |  | NYMEX Plus Fixed Spread |  | 60,000 |  |  | $ | (0.67) |
Subsequent to December 31, 2020 and as of March 1, 2021, the Company entered into the following natural gas, oil, and NGL derivative contracts as it works toward fulfilling minimum hedging requirements as provided for in the RSA:
Period |  | Type of Derivative Instrument |  | Index |  | Daily Volume(1) |  | Weighted Average Price
July 2021 - December 2021 |  | Swaps |  | NYMEX WTI |  | 2,250 |  |  | $53.07
July 2021 - December 2021 |  | Swaps |  | Mont Belvieu C3 |  | 3,100 |  |  | $27.80
January 2022 - June 2022 |  | Swaps |  | Mont Belvieu C3 |  | 1,000 |  |  | $27.30
April 2021 - May 2021 |  | Basis Swaps |  | Tetco M2 |  | 36,443 |  |  | $(0.61)
February 2021 - October 2021 |  | Basis Swaps |  | Rex Zone 3 |  | 94,505 |  |  | $(0.22)
July 2021 - December 2021 |  | Costless Collars |  | NYMEX Henry Hub |  | 210,000 |  |  | $2.67/$3.15
January 2022 - March 2022 |  | Costless Collars |  | NYMEX Henry Hub |  | 340,000 |  |  | $2.82/$3.40
(1) Volume units for gas instruments are presented as MMBtu/day while oil and NGL is presented in Bbls/day.
Schedule of purchase and sale agreement for sale of the company's non-core assets | The purchase and sale agreement for the sale of the Company's non-core assets located in the WCBB and Hackberry fields of Louisiana included a contingent consideration arrangement that entitles the Company to receive bonus payments if commodity prices exceed specified thresholds. The calculated fair value of this contingent payment arrangement was approximately $1.1 million as of the closing date of the divestiture. See below for threshold and potential payment amounts.
Period |  | Threshold(1) |  | Payment to be received(2)
January 2021 - June 2021 |  | Greater than or equal to $60.65 |  | $ | 150,000 |
|  | Between $52.62 - $60.65 |  | Calculated Value(3)
|  | Less than or equal to $52.62 |  | $ | — |
_____________________ (1) Based on the "WTI NYMEX + Argus LLS Differential," as published by Argus Media. (2) Payment will be assessed monthly from July 2020 through June 2021. If threshold is met, payment shall be received within five business days after the end of each calendar month. (3) If average daily price, as defined in (1), is greater than $52.62 but less than $60.65, payment received will be $150,000 multiplied by a fraction, the numerator of which is the amount determined by subtracting $52.62 from such average daily price, and the denominator of which is $8.03.
Schedule of derivative instruments on a gross basis | The following table presents the fair value of the Company's derivative instruments on a gross basis at December 31, 2020 and 2019:
| December 31,
| 2020 |  | 2019
| (In thousands)
Commodity derivative instruments | $ | 27,146 |  |  | $ | 125,383 |
Contingent consideration arrangement | — |  |  | 818 |
Total short-term derivative instruments – asset | $ | 27,146 |  |  | $ | 126,201 |
Commodity derivative instruments | 322 |  |  | — |
Contingent consideration arrangement | — |  |  | 563 |
Total long-term derivative instruments – asset | $ | 322 |  |  | $ | 563 |
Total short-term derivative instruments – liability | $ | 11,641 |  |  | $ | 303 |
Total long-term derivative instruments – liability | $ | 36,604 |  |  | $ | 53,135 |
Schedule of net gain (loss) on derivatives | The following table presents the gain and loss recognized in net gain (loss) on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the years ended December 31, 2020, 2019, and 2018.
| Net gain (loss) on derivative instruments
| For the Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (In thousands)
Natural gas derivatives | $ | 23,765 |  |  | $ | 194,450 |  |  | $ | (116,130) |
Oil derivatives | 43,510 |  |  | 7,035 |  |  | (13,084) |
NGL derivatives | (603) |  |  | 6,632 |  |  | 5,735 |
Contingent consideration arrangement | (1,381) |  |  | 243 |  |  | — |
Total | $ | 65,291 |  |  | $ | 208,360 |  |  | $ | (123,479) |
Schedule of recognized derivative assets | The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.
| As of December 31, 2020
| Derivative instruments, gross |  | Netting adjustments |  | Derivative instruments, net
| (In thousands)
Derivative assets | $ | 27,468 |  |  | $ | (25,730) |  |  | $ | 1,738 |
Derivative liabilities | $ | (48,245) |  |  | $ | 25,730 |  |  | $ | (22,515) |
| As of December 31, 2019
| Derivative instruments, gross |  | Netting adjustments |  | Derivative instruments, net
| (In thousands)
Derivative assets | $ | 126,764 |  |  | $ | (53,438) |  |  | $ | 73,326 |
Derivative liabilities | $ | (53,438) |  |  | $ | 53,438 |  |  | $ | — |
Schedule of recognized derivative liabilities | The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.
| As of December 31, 2020
| Derivative instruments, gross |  | Netting adjustments |  | Derivative instruments, net
| (In thousands)
Derivative assets | $ | 27,468 |  |  | $ | (25,730) |  |  | $ | 1,738 |
Derivative liabilities | $ | (48,245) |  |  | $ | 25,730 |  |  | $ | (22,515) |
| As of December 31, 2019
| Derivative instruments, gross |  | Netting adjustments |  | Derivative instruments, net
| (In thousands)
Derivative assets | $ | 126,764 |  |  | $ | (53,438) |  |  | $ | 73,326 |
Derivative liabilities | $ | (53,438) |  |  | $ | 53,438 |  |  | $ | — |

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- Definition Tabular disclosure of credit derivatives which includes information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, but not limited to, a credit-linked note). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5708773-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5708775-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4L -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5708777-113959 + Details
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- Definition Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5624163-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5580258-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41620-113959 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579245-113959 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41638-113959 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41678-113959 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41641-113959 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5624171-113959 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579240-113959 + Details
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