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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 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):

September 30, 2013
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Restricted deposits
$
27,952

 
$
—

 
$
—

 
$
—

 
$
27,952

Commodity derivative contracts
—

 
58,086

 
—

 
(34,302
)
 
23,784

Investments
14,139

 
—

 
—

 
—

 
14,139

 
$
42,091

 
$
58,086

 
$
—

 
$
(34,302
)
 
$
65,875

Liabilities
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
95,315

 
$
—

 
$
(34,302
)
 
$
61,013

 
$
—

 
$
95,315

 
$
—

 
$
(34,302
)
 
$
61,013


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-month period ended September 30, 2012 and nine-month periods ended September 30, 2013 and 2012 (in thousands): 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
Beginning balance of Level 3
 
$
5,013

 
$
(512
)
 
$
(4,253
)
Loss on derivative contracts
 
(4,261
)
 
(133
)
 
(3,872
)
Purchases
 
—

 
—

 
5,697

Settlements (received) paid
 
(569
)
 
645

 
2,611

Ending balance of Level 3
 
$
183

 
$
—

 
$
183
Senior Notes Carrying Amount and Fair Value Table
The estimated fair values and carrying values of the Company’s senior notes at September 30, 2013 and December 31, 2012 were as follows (in thousands):
 
September 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)
477,000

 
444,580

 
490,500

 
444,127

7.5% Senior Notes due 2021(3)
1,198,500

 
1,179,027

 
1,257,250

 
1,179,328

8.125% Senior Notes due 2022
766,875

 
750,000

 
823,125

 
750,000

7.5% Senior Notes due 2023(4)
829,125

 
821,177

 
882,750

 
820,971

____________________
(1)Carrying value is net of $8,843 discount at December 31, 2012.
(2)Carrying value is net of $5,420 and $5,873 discount at September 30, 2013 and December 31, 2012, respectively.
(3)Carrying value includes a premium, applicable to notes issued in August 2012, of $4,027 and $4,328 at
September 30, 2013 and December 31, 2012, respectively.
(4)Carrying value is net of $3,823 and $4,029 discount at September 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 prior to 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
)