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Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2015
Fair Value Disclosures [Abstract]  
Significant Unobservable Inputs - Guarantees
The significant unobservable input used in the fair value measurement of the Company’s financial guarantee liability at June 30, 2015 and December 31, 2014 is included in the table below (in thousands).
Unobservable Input
 
 
Estimated future payments for plugging and abandonment
 
$
372,034
Significant Unobservable Inputs - Derivative Contracts
The significant unobservable inputs and the range and weighted average of these inputs used in the fair value measurements of the Company’s natural gas basis swaps at June 30, 2015 and December 31, 2014 are included in the table below.
Unobservable Input
 
Range
 
Weighted Average
 
Fair Value
 
 
(Price per Mcf)
 
(In thousands)
June 30, 2015
 
 
 
 
 
 
 
 
Natural gas basis differential forward curve
 
$
(0.12
)
–
$
(0.45
)
 
$
(0.27
)
 
$
(2,207
)
December 31, 2014
 
 
 
 
 
 
 
 
Natural gas basis differential forward curve
 
$
(0.03
)
–
$
(0.38
)
 
$
(0.29
)
 
$
350
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, 2015
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
146,124

 
$
—

 
$
(2,079
)
 
$
144,045

Investments
10,882

 
—

 
—

 
—

 
10,882

 
$
10,882

 
$
146,124

 
$
—

 
$
(2,079
)
 
$
154,927

Liabilities
 
 
 
 
 
 
 
 
 
Guarantee
$
—

 
$
—

 
$
3,736

 
$
—

 
$
3,736

Commodity derivative contracts
—

 
—

 
2,207

 
(2,079
)
 
128

 
$
—

 
$
—

 
$
5,943

 
$
(2,079
)
 
$
3,864


December 31, 2014
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
338,067

 
$
350

 
$
—

 
$
338,417

Investments
11,106

 
—

 
—

 
—

 
11,106

 
$
11,106

 
$
338,067

 
$
350

 
$
—

 
$
349,523

Liabilities
 
 
 
 
 
 
 
 
 
Guarantee
$
—

 
$
—

 
$
5,104

 
$
—

 
$
5,104

 
$
—

 
$
—

 
$
5,104

 
$
—

 
$
5,104

____________________
(1)Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.
Fair Value, Reconciliation of Level 3 Fair Value Measurements for Guarantees
The table below sets forth a reconciliation of the Company’s Level 3 fair value measurements for the guarantee during the three and six-month periods ended June 30, 2015 and 2014 (in thousands): 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Level 3 Fair Value Measurements - Guarantee
 
2015
 
2014
 
2015
 
2014
Beginning balance
 
$
4,791

 
$
9,480

 
$
5,104

 
$
—

Issuances(1)
 
—

 
—

 
—

 
9,446

(Gain) loss on guarantee
 
(1,055
)
 
2,548

 
(1,368
)
 
2,582

Ending balance
 
$
3,736

 
$
12,028

 
$
3,736

 
$
12,028

____________________
(1)
Represents the fair value of the guarantee 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, for the six-month period ended June 30, 2014.

Fair Value, Reconciliation of Level 3 Fair Value Measurements for Commodity Derivatives
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, 2015 (in thousands): 
Level 3 Fair Value Measurements - Commodity Derivative Contracts
 
Three Months Ended June 30, 2015
 
Six Months Ended June 30, 2015
Beginning balance
 
$
1,332

 
$
350

Purchases
 
—

 
(1,847
)
Loss on derivative contracts
 
(3,539
)
 
(710
)
Ending balance
 
$
(2,207
)
 
$
(2,207
)
Senior Notes Carrying Amount and Fair Value Table
The estimated fair values and carrying values of the Company’s senior notes at June 30, 2015 and December 31, 2014 were as follows (in thousands):
 
June 30, 2015
 
December 31, 2014
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
8.75% Senior Secured Notes due 2020
$
1,134,375

 
$
1,250,000

 
$
—

 
$
—

Senior Unsecured Notes
 
 
 
 
 
 
 
8.75% Senior Notes due 2020(1)
$
243,000

 
$
445,758

 
$
303,750

 
$
445,402

7.5% Senior Notes due 2021(2)
$
514,063

 
$
1,149,175

 
$
752,000

 
$
1,178,486

8.125% Senior Notes due 2022
$
320,625

 
$
729,000

 
$
472,500

 
$
750,000

7.5% Senior Notes due 2023(3)
$
348,728

 
$
821,706

 
$
519,750

 
$
821,548

____________________
(1)
Carrying value is net of $4,242 and $4,598 discount at June 30, 2015 and December 31, 2014, respectively.
(2)
Carrying value includes a premium of $3,175 and $3,486 at June 30, 2015 and December 31, 2014, respectively.
(3)
Carrying value is net of $3,294 and $3,452 discount at June 30, 2015 and December 31, 2014, respectively.