Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2013

Variable Interest Entity [Line Items]

Open Oil and Natural Gas Commodity Derivative Contracts

At December 31, 2013, the Company’s open commodity derivative contracts consisted of the following:

Oil Price Swaps

Natural Gas Price Swaps

Oil Collars - Three-way



	Notional (MBbls)	Sold Put	Purchased Put	Sold Call
January 2014 — December 2014	8,213	$70.00	$90.20	$100.00
January 2015 — December 2015	2,920	$73.13	$90.82	$103.13

Natural Gas Collars



	Notional (MMcf)	Collar Range
January 2014 — December 2014	937	$4.00	—	$7.78
January 2015 — December 2015	1,010	$4.00	—	$8.55

Grey Ranch Plant, L.P

Variable Interest Entity [Line Items]

Assets and Liabilities Included in Consolidated Balance Sheets

GRLP’s assets and liabilities, after considering the effects of intercompany eliminations, included in the accompanying consolidated balance sheets at December 31, 2013 and 2012 consisted of the following (in thousands):



	December 31,
	2013		2012
Cash and cash equivalents	$	132	$	1,080
Accounts receivable, net	16		20
Prepaid expenses	32		64
Other current assets	109		109
Total current assets	289		1,273
Other property, plant and equipment, net	1,163		1,246
Total assets	$	1,452	$	2,519
Accounts payable and accrued expenses	$	129	$	274
Total liabilities	$	129	$	274

Royalty Trusts

Variable Interest Entity [Line Items]

Royalty Trust Initial Public Offerings

The following table summarizes information about each Royalty Trust upon completion of its initial public offering:



	Mississippian Trust I			Permian Trust			Mississippian Trust II
Net proceeds of offering (in thousands)	$	336,893		$	580,635		$	587,087
Total outstanding common units	21,000,000			39,375,000			37,293,750
Total outstanding subordinated units	7,000,000			13,125,000			12,431,250
Beneficial interest owned by Company(1)	38.4		%	34.3		%	39.9		%
Liquidation date(2)	12/31/2030			3/31/2031			12/31/2031

____________________


(1)	Subsequent to the initial public offerings, the Company sold common units of the Royalty Trusts it owned in transactions exempt from registration under Rule 144 under the Securities Act. These transactions decreased the Company’s beneficial interests in the Royalty Trusts. See further discussion of the unit sales below.


(2)	At the time each Royalty Trust terminates, 50% of the royalty interests conveyed to the Royalty Trust will automatically revert to the Company, and the remaining 50% will be sold with the proceeds distributed to the Royalty Trust unitholders.

Royalty Trusts Distributions

The Royalty Trusts declared and paid quarterly distributions during the years ended December 31, 2013, 2012 and 2011 as follows (in thousands):



	Year Ended December 31,
	2013(1)		2012(2)		2011(2)
Total distributions	$	299,674	$	274,979	$	91,162
Distributions to third-party unitholders	$	206,470	$	181,727	$	57,449

____________________


(1)	Subordination thresholds were not met for the Mississippian Trust I’s second and third quarter 2013 distributions or for the Permian Trust’s second quarter 2013 distribution, resulting in reduced distributions to the Company on its subordinated units for these periods.


(2)	The Company received incentive distributions from the Mississippian Trust I during the first and second quarters of 2012 and the third quarter of 2011.

Open Oil and Natural Gas Commodity Derivative Contracts

The combined volume in the tables below reflects the total volume of the Royalty Trusts’ open oil and natural gas commodity derivative contracts.

Oil Price Swaps Underlying the Royalty Trust Derivatives Agreements

Natural Gas Collars Underlying the Royalty Trust Derivatives Agreements



	Notional (MMcf)	Collar Range
January 2014 — December 2014	937	$	4.00	—	$	7.78
January 2015 — December 2015	1,010	$	4.00	—	$	8.55

Oil Price Swaps Underlying the Derivatives Agreements and Novated to the Royalty Trusts

Assets and Liabilities Included in Consolidated Balance Sheets

The Royalty Trusts’ assets and liabilities, after considering the effects of intercompany eliminations, included in the accompanying consolidated balance sheets at December 31, 2013 and 2012 consisted of the following (in thousands):



	December 31,
	2013			2012
Cash and cash equivalents(1)	$	7,912		$	7,445
Accounts receivable	22,540			28,596
Derivative contracts	4,983			10,286
Total current assets	35,435			46,327
Investment in royalty interests(2)	1,325,942			1,325,942
Less: accumulated depletion	(186,095		)	(103,746		)
	1,139,847			1,222,196
Derivative contracts	1,476			7,660
Total assets	$	1,176,758		$	1,276,183
Accounts payable and accrued expenses	$	3,393		$	1,101
Total liabilities	$	3,393		$	1,101

____________________


(1)	Includes $3.0 million held by the trustee at December 31, 2013 and 2012 as reserves for future general and administrative expenses.


(2)	Investment in royalty interests is included in oil and natural gas properties in the accompanying consolidated balance sheets, and was determined by allocating the historical net book value of the Company’s full cost pool based on the fair value of each Royalty Trust’s royalty interests relative to the fair value of the Company’s full cost pool at the time of conveyance.

Royalty Trusts Ownership Interest

The Company’s beneficial interests in the Royalty Trusts at December 31, 2013 and 2012 were as follows:



	December 31,
	2013		2012
Mississippian Trust I	26.9	%	26.9	%
Permian Trust	28.5	%	30.5	%
Mississippian Trust II	37.6	%	39.9	%

Pinon Gathering Company LLC

Variable Interest Entity [Line Items]

Amounts Due To/From PGC

Amounts due from and due to PGC as of December 31, 2013 and 2012 included in the accompanying consolidated balance sheets are as follows (in thousands):



	December 31,
	2013		2012
Accounts receivable due from PGC	$	741	$	1,976
Accounts payable due to PGC	$	3,634	$	5,053

Notional (MBbls)

Weighted Average
Fixed Price

January 2014 — December 2014

January 2015 — December 2015