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Derivative Financial Instruments | 12 Months Ended
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Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Note 10 – Derivative Financial Instruments Summary of Oil, Gas, and NGL Derivative Contracts in Place The Company has entered into various commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices and the associated impact on cash flows. As of December 31, 2016, all derivative counterparties were members of the Company’s credit facility lender group and all contracts were entered into for other-than-trading purposes. The Company’s derivative contracts consist of swap and collar arrangements for oil, gas, and NGLs. In a typical commodity swap agreement, if the agreed upon published third-party index price (“index price”) is lower than the swap fixed price, the Company receives the difference between the index price and the agreed upon swap fixed price. If the index price is higher than the swap fixed price, the Company pays the difference. For collar arrangements, the Company receives the difference between an agreed upon index and the floor price if the index price is below the floor price. The Company pays the difference between the agreed upon ceiling price and the index price if the index price is above the ceiling price. No amounts are paid or received if the index price is between the floor and ceiling prices. As of December 31, 2016, the Company had commodity derivative contracts outstanding through the second quarter of 2020 for a total of 11.3 million Bbls of oil production, 137.2 million MMBtu of net gas production, and 13.4 million Bbls of NGL production, as summarized in the tables below. Oil Swaps
Contract Period |  | NYMEX WTI Volumes |  | Weighted- Average Contract Price
|  | (MBbls) |  | (per Bbl)
First quarter 2017 |  | 1,574 |  |  | $ | 46.41 |
Second quarter 2017 |  | 1,444 |  |  | $ | 46.44 |
Third quarter 2017 |  | 1,340 |  |  | $ | 46.66 |
Fourth quarter 2017 |  | 1,254 |  |  | $ | 46.35 |
Total |  | 5,612 |  |  |
Oil Collars
Contract Period |  | NYMEX WTI Volumes |  | Weighted- Average Floor Price |  | Weighted- Average Ceiling Price
|  | (MBbls) |  | (per Bbl) |  | (per Bbl)
First quarter 2017 |  | 704 |  |  | $ | 45.00 |  |  | $ | 54.17 |
Second quarter 2017 |  | 636 |  |  | $ | 45.00 |  |  | $ | 54.10 |
Third quarter 2017 |  | 583 |  |  | $ | 45.00 |  |  | $ | 54.05 |
Fourth quarter 2017 |  | 540 |  |  | $ | 45.00 |  |  | $ | 54.01 |
2018 |  | 2,312 |  |  | $ | 50.00 |  |  | $ | 59.24 |
2019 |  | 943 |  |  | $ | 50.00 |  |  | $ | 61.15 |
Total |  | 5,718 |  |  |  |  |
Natural Gas Swaps
Contract Period |  | Sold Volumes |  | Weighted- Average Contract Price |  | Purchased Volumes (1) |  | Weighted- Average Contract Price |  | Net Volumes
|  | (BBtu) |  | (per MMBtu) |  | (BBtu) |  | (per MMBtu) |  | (BBtu)
First quarter 2017 |  | 29,420 |  |  | $ | 3.76 |  |  | — |  |  | $ | — |  |  | 29,420 |
Second quarter 2017 |  | 26,205 |  |  | $ | 3.98 |  |  | — |  |  | $ | — |  |  | 26,205 |
Third quarter 2017 |  | 23,657 |  |  | $ | 4.01 |  |  | — |  |  | $ | — |  |  | 23,657 |
Fourth quarter 2017 |  | 22,001 |  |  | $ | 3.98 |  |  | — |  |  | $ | — |  |  | 22,001 |
2018 |  | 63,166 |  |  | $ | 3.68 |  |  | (30,606 | ) |  | $ | 4.27 |  |  | 32,560 |
2019 |  | 27,743 |  |  | $ | 4.20 |  |  | (24,415 | ) |  | $ | 4.34 |  |  | 3,328 |
Total (2) |  | 192,192 |  |  |  |  | (55,021 | ) |  |  |  | 137,171 |
____________________________________________
(1) | During 2016, the Company restructured certain of its gas derivative contracts by buying fixed price volumes to offset existing 2018 and 2019 fixed price swap contracts totaling 55.0 million MMBtu. The Company then entered into new 2017 fixed price swap contracts totaling 38.6 million MMBtu with a contract price of $4.43 per MMBtu. No cash or other consideration was included as part of the restructuring.
(2) | Total net volumes of natural gas swaps are comprised of IF El Paso Permian (3%), IF HSC (94%), and IF NNG Ventura (3%).
NGL Swaps
|  | OPIS Purity Ethane Mont Belvieu |  | OPIS Propane Mont Belvieu Non-TET |  | OPIS Normal Butane Mont Belvieu Non-TET |  | OPIS Isobutane Mont Belvieu Non-TET |  | OPIS Natural Gasoline Mont Belvieu Non-TET
Contract Period |  | Volumes | Weighted-Average Contract Price |  | Volumes | Weighted-Average Contract Price |  | Volumes | Weighted-Average Contract Price |  | Volumes | Weighted-Average Contract Price |  | Volumes | Weighted-Average Contract Price
|  | (MBbls) | (per Bbl) |  | (MBbls) | (per Bbl) |  | (MBbls) | (per Bbl) |  | (MBbls) | (per Bbl) |  | (MBbls) | (per Bbl)
First quarter 2017 |  | 847 |  | $ | 8.63 |  |  | 692 |  | $ | 21.90 |  |  | 122 |  | $ | 30.69 |  |  | 94 |  | $ | 31.12 |  |  | 156 |  | $ | 47.54 |
Second quarter 2017 |  | 787 |  | $ | 8.86 |  |  | 634 |  | $ | 21.90 |  |  | 112 |  | $ | 30.69 |  |  | 86 |  | $ | 31.12 |  |  | 143 |  | $ | 47.56 |
Third quarter 2017 |  | 736 |  | $ | 9.14 |  |  | 588 |  | $ | 21.91 |  |  | 104 |  | $ | 30.70 |  |  | 80 |  | $ | 31.12 |  |  | 133 |  | $ | 47.59 |
Fourth quarter 2017 |  | 692 |  | $ | 9.10 |  |  | 550 |  | $ | 21.91 |  |  | 98 |  | $ | 30.70 |  |  | 74 |  | $ | 31.12 |  |  | 124 |  | $ | 47.61 |
2018 |  | 2,434 |  | $ | 10.18 |  |  | 1,442 |  | $ | 22.86 |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |
2019 |  | 2,176 |  | $ | 11.95 |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |
2020 |  | 539 |  | $ | 11.13 |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |
Total |  | 8,211 |  |  |  | 3,906 |  |  |  | 436 |  |  |  | 334 |  |  |  | 556 |  |
Commodity Derivative Contracts Entered Into After December 31, 2016 Subsequent to December 31, 2016, and pursuant to a definitive agreement, the Company entered into certain NYMEX swap contracts on behalf of the buyer of its outside-operated Eagle Ford shale assets, which will be novated to the buyer at closing expected to occur in the first quarter of 2017. Please refer to Note 3 – Acquisitions, Divestitures, and Assets Held for Sale. Additionally, subsequent to December 31, 2016, the Company entered into various derivative contracts, as summarized below:
• | derivative costless collar contracts through the fourth quarter of 2019 for a total of 2.7 million Bbls of oil production with contract floor prices of $50.00 per Bbl and contract ceiling prices ranging from $57.00 per Bbl to $58.40 per Bbl;
• | derivative fixed price Midland-Cushing basis swap contracts through the fourth quarter of 2019 for a total of 3.7 million Bbls of oil production at contract prices ranging from ($1.23) per Bbl to ($1.45) per Bbl; and
• | derivative fixed price swap contracts through the first quarter of 2018 for a total of 1.1 million Bbls of NGL production at contract prices ranging from $35.07 per Bbl to $49.88 per Bbl.
Derivative Assets and Liabilities Fair Value The Company’s commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets and liabilities. The fair value of the commodity derivative contracts was a net liability of $91.7 million at December 31, 2016, and net asset of $488.4 million at December 31, 2015. The following tables detail the fair value of derivatives recorded in the accompanying balance sheets, by category:
| As of December 31, 2016
| Derivative Assets |  | Derivative Liabilities
| Balance Sheet Classification |  | Fair Value |  | Balance Sheet Classification |  | Fair Value
| (in thousands)
Commodity contracts | Current assets |  | $ | 54,521 |  |  | Current liabilities |  | $ | 115,464 |
Commodity contracts | Noncurrent assets |  | 67,575 |  |  | Noncurrent liabilities |  | 98,340 |
Derivatives not designated as hedging instruments |  |  | $ | 122,096 |  |  |  |  | $ | 213,804 |
| As of December 31, 2015
| Derivative Assets |  | Derivative Liabilities
| Balance Sheet Classification |  | Fair Value |  | Balance Sheet Classification |  | Fair Value
| (in thousands)
Commodity contracts | Current assets |  | $ | 367,710 |  |  | Current liabilities |  | $ | 8 |
Commodity contracts | Noncurrent assets |  | 120,701 |  |  | Noncurrent liabilities |  | — |
Derivatives not designated as hedging instruments |  |  | $ | 488,411 |  |  |  |  | $ | 8 |
Offsetting of Derivative Assets and Liabilities As of December 31, 2016, and 2015, all derivative instruments held by the Company were subject to master netting arrangements by various financial institutions. In general, the terms of the Company’s agreements provide for offsetting of amounts payable or receivable between it and the counterparty, at the election of both parties, for transactions that settle on the same date and in the same currency. The Company’s agreements also provide that in the event of an early termination, the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. The Company’s accounting policy is to not offset these positions in its accompanying balance sheets. The following table provides a reconciliation between the gross assets and liabilities reflected on the accompanying balance sheets and the potential effects of master netting arrangements on the fair value of the Company’s derivative contracts:
|  | Derivative Assets |  | Derivative Liabilities
|  | As of December 31, |  | As of December 31,
Offsetting of Derivative Assets and Liabilities |  | 2016 |  | 2015 |  | 2016 |  | 2015
|  | (in thousands)
Gross amounts presented in the accompanying balance sheets |  | $ | 122,096 |  |  | $ | 488,411 |  |  | $ | (213,804 | ) |  | $ | (8 | )
Amounts not offset in the accompanying balance sheets |  | (118,080 | ) |  | (8 | ) |  | 118,080 |  |  | 8 |
Net amounts |  | $ | 4,016 |  |  | $ | 488,403 |  |  | $ | (95,724 | ) |  | $ | — |
The Company recognizes all gains and losses from changes in commodity derivative fair values immediately in earnings rather than deferring any such amounts in accumulated other comprehensive loss. The Company had no derivatives designated as hedging instruments for the years ended December 31, 2016, 2015, and 2014. Please refer to Note 11 - Fair Value Measurements for more information regarding the Company’s derivative instruments, including its valuation techniques. The following table summarizes the components of net derivative (gain) loss presented in the accompanying statements of operations:
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Derivative settlement (gain) loss: |  |  |  |  |
Oil contracts | $ | (243,102 | ) |  | $ | (362,219 | ) |  | $ | (28,410 | )
Gas contracts (1) | (94,936 | ) |  | (123,180 | ) |  | 26,706 |
NGL contracts | 8,560 |  |  | (27,167 | ) |  | (10,911 | )
Total derivative settlement gain | $ | (329,478 | ) |  | $ | (512,566 | ) |  | $ | (12,615 | )
Total derivative (gain) loss: |  |  |  |  |
Oil contracts | $ | 85,370 |  |  | $ | (191,165 | ) |  | $ | (457,082 | )
Gas contracts | 81,060 |  |  | (189,734 | ) |  | (93,267 | )
NGL contracts | 84,203 |  |  | (27,932 | ) |  | (32,915 | )
Total net derivative (gain) loss | $ | 250,633 |  |  | $ | (408,831 | ) |  | $ | (583,264 | )
____________________________________________
(1) | Natural gas derivative settlements for the years ended December 31, 2015, and 2014, include $15.3 million and $5.6 million, respectively, of early settlements of futures contracts as a result of divesting assets in the Company’s Mid-Continent region.
Credit Related Contingent Features As of December 31, 2016, and through the filing date of this report, all of the Company’s derivative counterparties were members of the Company’s credit facility lender group. The Company’s obligations under its Credit Agreement and derivative contracts are secured by mortgages on assets having a value equal to at least 90 percent of the total PV-9 of the Company’s proved oil and gas properties evaluated in the most recent reserve report.

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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 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
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