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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2013
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]  
Assets and Liabilities Measured at Fair Value 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):

December 31, 2013
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Restricted deposits
$
27,955

 
$
—

 
$
—

 
$
—

 
$
27,955

Commodity derivative contracts
—

 
50,274

 
—

 
(23,369
)
 
26,905

Investments
13,708

 
—

 
—

 
—

 
13,708

 
$
41,663

 
$
50,274

 
$
—

 
$
(23,369
)
 
$
68,568

Liabilities
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
78,200

 
$
—

 
$
(23,369
)
 
$
54,831

 
$
—

 
$
78,200

 
$
—

 
$
(23,369
)
 
$
54,831


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.
Reconciliation of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs
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 years ended December 31, 2011, 2012 and 2013 (in thousands):
 
 
Commodity Derivative Contracts
 
Interest Rate Swaps
 
 
 

 
 
Total
Balance of Level 3 at December 31, 2010

$
(205,860
)
 
$
(16,694
)
 
$
(222,554
)
    Gain (loss) on derivative contracts

44,075

 
(3,168
)
 
40,907

    Cash paid on settlements

50,713

 
9,414

 
60,127

    Transfers(1)

106,820

 
10,448

 
117,268

Balance of Level 3 at December 31, 2011

$
(4,252
)
 
$
—

 
$
(4,252
)
    Loss on derivative contracts

(5,460
)
 
—

 
(5,460
)
    Purchases

5,697

 
—

 
5,697

    Cash paid on settlements

3,503

 
—

 
3,503

Balance of Level 3 at December 31, 2012

$
(512
)
 
$
—

 
$
(512
)
Loss on derivative contracts

(133
)
 
—

 
(133
)
    Cash paid on settlements

645

 
—

 
645

Balance of Level 3 at December 31, 2013

$
—

 
$
—

 
$
—

____________________
(1)
Fair values related to the Company’s oil and natural gas fixed price swaps, natural gas collars and interest rate swap were transferred from Level 3 to Level 2 in the fourth quarter of 2011 due to enhancements to the Company’s internal valuation process, including the use of observable inputs to assess the fair value. During the years ended December 31, 2013 and 2012, the Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements.
Estimated Fair Value and Carrying Value of Senior Notes
The estimated fair values and carrying values of the Company’s senior notes at December 31, 2013 and 2012 were as follows (in thousands):
 
December 31, 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)
486,000

 
444,736

 
490,500

 
444,127

7.5% Senior Notes due 2021(3)
1,230,813

 
1,178,922

 
1,257,250

 
1,179,328

8.125% Senior Notes due 2022
795,000

 
750,000

 
823,125

 
750,000

7.5% Senior Notes due 2023(4)
837,375

 
821,249

 
882,750

 
820,971

 ____________________
(1)
Carrying value is net of $8,843 discount at December 31, 2012.
(2)
Carrying value is net of $5,264 and $5,873 discount at December 31, 2013 and 2012, respectively.
(3)
Carrying value includes a premium, applicable to notes issued in August 2012, of $3,922 and $4,328 at December 31, 2013 and 2012, respectively.
(4)
Carrying value is net of $3,751 and $4,029 discount at December 31, 2013 and 2012, respectively.
Fair Value Measurements Level 3
  
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]  
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 2013.

Unobservable Input
 
Range
 
Weighted Average
 
Fair Value
 
 
(Price per Bbl)
 
(In thousands)
Oil basis differential forward curve
 
$10.00
–
$21.98
 
$14.74
 
$
(512
)