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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016 and December 31, 2015 are included in the table below.

Unobservable Input		Range								Weighted Average				Fair Value
		(Price per Mcf)												(In thousands)
March 31, 2016
Natural gas basis differential forward curve		$	(0.12	)	–	$	(0.30	)		$	(0.24	)		$	(1,162	)
December 31, 2015
Natural gas basis differential forward curve		$	(0.06	)	–	$	(0.28	)		$	(0.22	)		$	(1,748	)

Significant Unobservable Inputs - Liabilities

The significant unobservable inputs and range and weighted average of these inputs used in the fair value measurement of the conversion options at March 31, 2016 and December 31, 2015 are included in the table below.

Unobservable Input		Range						Weighted Average			Fair Value
											(In thousands)
March 31, 2016
Debt conversion feature hazard rate		104.9	%	–	114.2	%		109.9	%		$	7,281
December 31, 2015
Debt conversion feature hazard rate		114.0	%	–	135.2	%		119.2	%		$	29,355

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):

March 31, 2016

	Fair Value Measurements												Netting(1)				Assets/Liabilities at Fair Value
	Level 1				Level 2				Level 3
Assets
Commodity derivative contracts	$	—			$	62,210			$	—			$	(807	)		$	61,403
Investments	9,049				—				—				—				9,049
	$	9,049			$	62,210			$	—			$	(807	)		$	70,452
Liabilities
Commodity derivative contracts	$	—			$	—			$	1,162			$	(807	)		$	355
Debt holder conversion feature	—				—				7,281				—				7,281
Mandatory prepayment feature - PGC Senior Secured Notes	—				2,496				—				—				2,496
	$	—			$	2,496			$	8,443			$	(807	)		$	10,132

December 31, 2015

	Fair Value Measurements												Netting(1)				Assets/Liabilities at Fair Value
	Level 1				Level 2				Level 3
Assets
Commodity derivative contracts	$	—			$	85,524			$	—			$	(1,175	)		$	84,349
Investments	10,106				—				—				—				10,106
	$	10,106			$	85,524			$	—			$	(1,175	)		$	94,455
Liabilities
Commodity derivative contracts	$	—			$	—			$	1,748			$	(1,175	)		$	573
Debt holder conversion feature	—				—				29,355				—				29,355
Mandatory prepayment feature - PGC Senior Secured Notes	—				2,941				—				—				2,941
	$	—			$	2,941			$	31,103			$	(1,175	)		$	32,869

____________________

(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-month periods ended March 31, 2016 and 2015 (in thousands):

		Three Months Ended March 31,
		2016				2015
Beginning balance		$	(1,748	)		$	350
Purchases		—				347
Loss on commodity derivative contracts		586				635
Ending balance		$	(1,162	)		$	1,332

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 debt holder conversion features during the three-month period ended March 31, 2016 (in thousands):

Beginning balance		$	29,355
Gain on derivative holder conversion feature		(880		)
Conversions		(21,194		)
Ending balance		$	7,281

The table below sets forth a reconciliation of the Company’s Level 3 fair value measurements for the guarantee during the three-month period ended March 31, 2015 (in thousands):

Beginning balance		$	5,104
Gain on guarantee		(313		)
Ending balance		$	4,791

Senior Notes Carrying Amount and Fair Value Table

The estimated fair values and carrying values of the Company’s senior notes at March 31, 2016 and December 31, 2015 were as follows (in thousands):

	March 31, 2016								December 31, 2015
	Fair Value				Carrying Value				Fair Value				Carrying Value
8.75% Senior Secured Notes due 2020	$	332,930			$	1,267,924			$	403,098			$	1,265,814
Senior Unsecured Notes
8.75% Senior Notes due 2020	$	24,769			$	389,645			$	39,740			$	389,232
7.5% Senior Notes due 2021	$	43,386			$	751,416			$	79,812			$	751,087
8.125% Senior Notes due 2022	$	31,610			$	519,026			$	57,749			$	518,693
7.5% Senior Notes due 2023	$	27,129			$	535,191			$	58,799			$	534,869
Convertible Senior Unsecured Notes
8.125% Convertible Senior Notes due 2022	$	103			$	14,692			$	44,199			$	78,290
7.5% Convertible Senior Notes due 2023	$	118			$	14,577			$	15,125			$	24,393

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Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity.

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