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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2015
Fair Value Disclosures [Abstract]  
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 September 30, 2015 and December 31, 2014 are included in the table below.
Unobservable Input
 
Range
 
Weighted Average
 
Fair Value
 
 
(Price per Mcf)
 
(In thousands)
September 30, 2015
 
 
 
 
 
 
 
 
Natural gas basis differential forward curve
 
$
(0.11
)
–
$
(0.31
)
 
$
(0.20
)
 
$
(3,436
)
December 31, 2014
 
 
 
 
 
 
 
 
Natural gas basis differential forward curve
 
$
(0.03
)
–
$
(0.38
)
 
$
(0.29
)
 
$
350
Significant Unobservable Inputs - Liabilities
The significant unobservable input used in the fair value measurement of the Company’s financial guarantee liability at December 31, 2014 is included in the table below (in thousands).
Unobservable Input
 
 
Estimated future payments for plugging and abandonment
 
$
372,034


 The significant unobservable inputs and range and weighted average of these inputs used in the fair value measurement of the conversion options at September 30, 2015 are included in the table below.
Unobservable Input
 
Range
 
Weighted Average
 
Fair Value
 
 
 
 
(In thousands)
Long-term debt conversion feature hazard rate
 
58.6
%
–
62.4
%
 
60.7
%
 
$
5,474
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, 2015
 
Fair Value Measurements
 
Netting(1)
 
Assets/Liabilities at Fair Value
 
Level 1
 
Level 2
 
Level 3
 
 
Assets
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
122,307

 
$
—

 
$
(2,741
)
 
$
119,566

Investments
10,444

 
—

 
—

 
—

 
10,444

 
$
10,444

 
$
122,307

 
$
—

 
$
(2,741
)
 
$
130,010

Liabilities
 
 
 
 
 
 
 
 
 
Commodity derivative contracts
$
—

 
$
—

 
$
3,436

 
$
(2,741
)
 
$
695

Long-term debt holder conversion feature
—

 
—

 
5,474

 
—

 
5,474

 
$
—

 
$
—

 
$
8,910

 
$
(2,741
)
 
$
6,169


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 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 nine-month periods ended September 30, 2015 (in thousands): 
Level 3 Fair Value Measurements - Commodity Derivative Contracts
 
Three Months Ended September 30, 2015
 
Nine Months Ended September 30, 2015
Beginning balance
 
$
(2,207
)
 
$
350

Purchases
 
—

 
(2,894
)
Loss on commodity derivative contracts
 
(1,229
)
 
(892
)
Ending balance
 
$
(3,436
)
 
$
(3,436
)
Fair Value, Reconciliation of Level 3 Fair Value Measurements - Liabilities
The table below sets forth a reconciliation of the Company’s Level 3 fair value measurements for long-term debt holder conversion features during the three and nine-month periods ended September 30, 2015 (in thousands):
Level 3 Fair Value Measurements - Long-Term Debt Holder Conversion Feature
 
 
Beginning balance
 
$
—

Issuances
 
16,994

Gain on derivative holder conversion feature
 
(10,146
)
Conversions
 
(1,374
)
Ending balance
 
$
5,474

The table below sets forth a reconciliation of the Company’s Level 3 fair value measurements for the guarantee during the three and nine-month periods ended September 30, 2015 and 2014 (in thousands): 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Level 3 Fair Value Measurements - Guarantee
 
2015
 
2014
 
2015
 
2014
Beginning balance
 
$
3,736

 
$
12,028

 
$
5,104

 
$
—

Issuances(1)
 
—

 
—

 
—

 
9,446

(Gain) loss on guarantee
 
—

 
(1,598
)
 
—

 
984

Settlements
 
(3,736
)
 
—

 
(5,104
)
 
—

Ending balance
 
$
—

 
$
10,430

 
$
—

 
$
10,430

____________________
(1)
For the nine-month period ended September 30, 2014, balance 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.
Senior Notes Carrying Amount and Fair Value Table
The estimated fair values and carrying values of the Company’s senior notes at September 30, 2015 and December 31, 2014 were as follows (in thousands):
 
September 30, 2015
 
December 31, 2014
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
8.75% Senior Secured Notes due 2020
$
757,813

 
$
1,250,000

 
$
—

 
$
—

Senior Unsecured Notes
 
 
 
 
 
 
 
8.75% Senior Notes due 2020(1)
$
95,128

 
$
401,149

 
$
303,750

 
$
445,402

7.5% Senior Notes due 2021(2)
$
218,605

 
$
996,309

 
$
752,000

 
$
1,178,486

8.125% Senior Notes due 2022
$
129,255

 
$
601,187

 
$
472,500

 
$
750,000

7.5% Senior Notes due 2023(3)
$
134,846

 
$
622,923

 
$
519,750

 
$
821,548

Convertible Senior Unsecured Notes
 
 
 
 
 
 
 
8.125% Convertible Senior Notes due 2022(4)
$
30,143

 
$
36,406

 
$
—

 
$
—

7.5% Convertible Senior Notes due 2023(5)
$
23,599

 
$
29,020

 
$
—

 
$
—

____________________
(1)
Carrying value is net of $3,649 and $4,598 discount at September 30, 2015 and December 31, 2014, respectively.
(2)
Carrying value includes a premium of $2,652 and $3,486 at September 30, 2015 and December 31, 2014, respectively.
(3)
Carrying value is net of $2,436 and $3,452 discount at September 30, 2015 and December 31, 2014, respectively.
(4)
Carrying value includes holder conversion feature liabilities with fair value of $3,113 and is net of $105,691 discount at September 30, 2015.
(5)
Carrying value includes holder conversion feature liabilities with fair value of $2,361 and is net of $87,412 discount at September 30, 2015.