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Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2013
Fair Value Disclosures  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis by the fair value hierarchy (in thousands):

June 30, 2013
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Restricted deposits
$
27,953

 
$
—

 
$
—

 
$
—

 
$
27,953

Commodity derivative contracts
—

 
137,484

 
—

 
(40,887
)
 
96,597

Investments
11,385

 
—

 
—

 
—

 
11,385

 
$
39,338

 
$
137,484

 
$
—

 
$
(40,887
)
 
$
135,935

Liabilities
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
54,402

 
$
—

 
$
(40,887
)
 
$
13,515

 
$
—

 
$
54,402

 
$
—

 
$
(40,887
)
 
$
13,515


December 31, 2012
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Restricted deposits
$
27,947

 
$
—

 
$
—

 
$
—

 
$
27,947

Commodity derivative contracts
—

 
130,220

 
183

 
(35,764
)
 
94,639

Investments
10,348

 
—

 
—

 
—

 
10,348

 
$
38,295

 
$
130,220

 
$
183

 
$
(35,764
)
 
$
132,934

Liabilities
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
107,321

 
$
695

 
$
(35,764
)
 
$
72,252

Interest rate swap
—

 
2,395

 
—

 
—

 
2,395

 
$
—

 
$
109,716

 
$
695

 
$
(35,764
)
 
$
74,647

____________________
(1)Represents the impact of netting assets and liabilities with counterparties with which the right of offset exists.
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings
The table below sets forth a reconciliation of the Company’s commodity derivative contracts measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and six-month periods ended June 30, 2013 and 2012 (in thousands): 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2013
 
2012
 
2013
 
2012

 
 
 
 
 
 
 
 
Beginning balance of Level 3
 
$
(211
)
 
$
(2,675
)
 
$
(512
)
 
$
(4,253
)
Total realized and unrealized gains (losses)
 
740

 
(1,643
)
 
(133
)
 
389

Purchases
 
—

 
5,697

 
—

 
5,697

Settlements (received) paid
 
(529
)
 
3,634

 
645

 
3,180

Ending balance of Level 3
 
$
—

 
$
5,013

 
$
—

 
$
5,013
Senior Notes Carrying Amount and Fair Value Table
The estimated fair values and carrying values of the Company’s senior notes at June 30, 2013 and December 31, 2012 were as follows (in thousands):
 
June 30, 2013
 
December 31, 2012
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
9.875% Senior Notes due 2016(1)
$
—

 
$
—

 
$
392,913

 
$
356,657

8.0% Senior Notes due 2018
—

 
—

 
790,313

 
750,000

8.75% Senior Notes due 2020(2)
457,875

 
444,425

 
490,500

 
444,127

7.5% Senior Notes due 2021(3)
1,116,250

 
1,179,128

 
1,257,250

 
1,179,328

8.125% Senior Notes due 2022
742,500

 
750,000

 
823,125

 
750,000

7.5% Senior Notes due 2023(4)
781,688

 
821,107

 
882,750

 
820,971

____________________
(1)Carrying value is net of $8,843 discount at December 31, 2012.
(2)Carrying value is net of $5,575 and $5,873 discount at June 30, 2013 and December 31, 2012, respectively.
(3)
Carrying value includes a premium, applicable to notes issued in August 2012, of $4,128 and $4,328 at June 30, 2013 and December 31, 2012, respectively.
(4)Carrying value is net of $3,893 and $4,029 discount at June 30, 2013 and December 31, 2012, respectively.
Fair Value Measurements Level 3
  
Fair Value Disclosures  
Significant Unobservable Inputs
The significant unobservable inputs and the range and weighted average of these inputs used in the fair value measurements of the Company’s oil basis swaps at December 31, 2012 are included in the table below. All of the outstanding oil basis swaps at December 31, 2012 contractually matured during the six month-period ended June 30, 2013.
Unobservable Input
 
Range
 
Weighted Average
 
Fair Value
 
 
(price per Bbl)
 
(price per Bbl)
 
(in thousands)
Oil basis differential forward curve
 
$10.00
–
$21.98
 
$14.74
 
$
(512
)