Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair value amounts by hierarchy level as of June 30, 2018 and December 31, 2017 are presented gross in the tables below (in thousands):



	June 30, 2018
	Level 1			Level 2			Level 3			Gross Fair Value			Effect of Counter-Party Netting			Net Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives	$	1,120		$	11,110		$	—		$	12,230		$	(9,936	)	$	2,294
Interest rate derivatives	—			923			—			923			—			923
Total	$	1,120		$	12,033		$	—		$	13,153		$	(9,936	)	$	3,217

Liabilities
Common stock warrants	$	—		$	—		$	(6,137	)	$	(6,137	)	$	—		$	(6,137	)
Commodity derivatives	(2,629		)	(8,816		)	—			(11,445		)	9,936			(1,509		)
J. Aron repurchase obligation derivative	—			—			(4,422		)	(4,422		)	—			(4,422		)
Total	$	(2,629	)	$	(8,816	)	$	(10,559	)	$	(22,004	)	$	9,936		$	(12,068	)



	December 31, 2017
	Level 1			Level 2			Level 3			Gross Fair Value			Effect of Counter-Party Netting			Net Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives	$	557		$	21,907		$	—		$	22,464		$	(19,650	)	$	2,814
Interest rate derivatives	—			3,810			—			3,810			—			3,810
Total	$	557		$	25,717		$	—		$	26,274		$	(19,650	)	$	6,624

Liabilities
Common stock warrants	$	—		$	—		$	(6,808	)	$	(6,808	)	$	—		$	(6,808	)
Commodity derivatives	(596		)	(19,093		)	—			(19,689		)	19,650			(39		)
J. Aron repurchase obligation derivative	—			—			(19,564		)	(19,564		)	—			(19,564		)
Total	$	(596	)	$	(19,093	)	$	(26,372	)	$	(46,061	)	$	19,650		$	(26,411	)

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(1)	Does not include cash collateral of $9.6 million and $7.2 million as of June 30, 2018 and December 31, 2017, respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

Roll Forward of Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis

A roll forward of Level 3 financial instruments measured at fair value on a recurring basis is as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Balance, at beginning of period	$	(19,285	)	$	(15,215	)	$	(26,372	)	$	(25,134	)
Settlements	—			—			—			—
Total unrealized income included in earnings	8,726			7,891			15,813			17,810
Balance, at end of period	$	(10,559	)	$	(7,324	)	$	(10,559	)	$	(7,324	)

Carrying Value and Fair Value of Long-term Debt and Other Financial Instruments

The carrying value and fair value of long-term debt and other financial instruments as of June 30, 2018 and December 31, 2017 are as follows (in thousands):



	June 30, 2018
	Carrying Value		Fair Value
5.00% Convertible Senior Notes due 2021 (1) (3)	$	97,894	$	136,732
7.75% Senior Secured Notes due 2025 (1)	290,145		304,230
Common stock warrants (2)	6,137		6,137



	December 31, 2017
	Carrying Value		Fair Value
5.00% Convertible Senior Notes due 2021 (1) (3)	$	95,486	$	149,007
7.75% Senior Secured Notes due 2025 (1)	289,326		300,423
Common stock warrants (2)	6,808		6,808

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(1)	The fair values measurements of the 5.00% Convertible Senior Notes and the 7.75% Senior Secured Notes are considered Level 2 measurements as discussed below.


(2)	The fair value of the common stock warrants is considered a Level 3 measurement in the fair value hierarchy.


(3)	The carrying value of the 5.00% Convertible Senior Notes excludes the fair value of the equity component, which was classified as equity upon issuance.