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Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2014
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, 2014
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
6,490

 
$
—

 
$
(3,549
)
 
$
2,941

Investments
10,740

 
—

 
—

 
—

 
10,740

 
$
10,740

 
$
6,490

 
$
—

 
$
(3,549
)
 
$
13,681

Liabilities
 
 
 
 
 
 
 
 
 
Guarantees
$
—

 
$
—

 
$
12,028

 
$
—

 
$
12,028

Commodity derivative contracts
—

 
65,810

 
—

 
(3,549
)
 
62,261

 
$
—

 
$
65,810

 
$
12,028

 
$
(3,549
)
 
$
74,289


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

____________________
(1)Represents the impact of netting assets and liabilities for counterparties with which the right of offset exists.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The table below sets forth a reconciliation of the Company’s Level 3 fair value measurements for guarantees during the three and six-month periods ended June 30, 2014 (in thousands): 
Level 3 Fair Value Measurements - Guarantees
 
Three Months Ended June 30, 2014
 
Six Months Ended June 30, 2014
Beginning balance
 
$
9,480

 
$
—

Issuances(1)
 
—

 
9,446

Loss on guarantees
 
2,548

 
2,582

Ending balance
 
$
12,028

 
$
12,028

____________________
(1)
Represents the fair value of the guarantees of certain plugging and abandonment obligations on behalf of Fieldwood as of February 25, 2014, the closing date for the sale of the Gulf Properties.
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 Level 3 fair value measurements for commodity derivative contracts during the three and six-month periods ended June 30, 2013 (in thousands): 
Level 3 Fair Value Measurements - Commodity Derivative Contracts
 
Three Months Ended June 30, 2013
 
Six Months Ended June 30, 2013
Beginning balance
 
$
(211
)
 
$
(512
)
Gain (loss) on derivative contracts
 
740

 
(133
)
Settlements (received) paid
 
(529
)
 
645

Ending balance
 
$
—

 
$
—
Senior Notes Carrying Amount and Fair Value Table
The estimated fair values and carrying values of the Company’s senior notes at June 30, 2014 and December 31, 2013 were as follows (in thousands):
 
June 30, 2014
 
December 31, 2013
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
8.75% Senior Notes due 2020(1)
$
483,750

 
$
445,062

 
$
486,000

 
$
444,736

7.5% Senior Notes due 2021(2)
1,273,465

 
1,178,708

 
1,230,813

 
1,178,922

8.125% Senior Notes due 2022
825,000

 
750,000

 
795,000

 
750,000

7.5% Senior Notes due 2023(3)
893,063

 
821,395

 
837,375

 
821,249

____________________
(1)Carrying value is net of $4,938 and $5,264 discount at June 30, 2014 and December 31, 2013, respectively.
(2)Carrying value includes a premium, applicable to notes issued in August 2012, of $3,708 and $3,922 at
June 30, 2014 and December 31, 2013, respectively.
(3)Carrying value is net of $3,605 and $3,751 discount at June 30, 2014 and December 31, 2013, respectively.
Fair Value Measurements Level 3
  
Fair Value Disclosures  
Significant Unobservable Inputs
The significant unobservable input used in the fair value measurement of the Company’s financial guarantee liability at June 30, 2014 is included in the table below (in thousands).

Unobservable Input
 
 
Estimated future payments for plugging and abandonment
 
$
426,661