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Derivatives | 3 Months Ended
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Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives Commodity Derivatives The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil and natural gas. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil or natural gas production sales through the use of commodity derivative contracts. There were no open commodity derivative contracts as of March 31, 2022. Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. All derivative contracts have been recorded at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated statements of operations. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted to the mark-to-market valuation on a quarterly basis. The following table summarizes derivative activity for the three-month periods ended March 31, 2022, and 2021 (in thousands):
| Three Months Ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
(Gain) loss on commodity derivative contracts | $ | 1,064 |  |  | $ | — |  |  |  |  |
Cash (paid) received on settlements | $ | (1,085) |  |  | $ | — |  |  |  |  |
M aster Netting Agreements and the Right of Offset. As applicable, the Company historically had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk is limited to the net amounts due from its counterparties. There were no open commodity derivatives contracts as of March 31, 2022. As of December 31, 2021, the Company’s open commodity derivative contracts were held with one counterparty. There were no open derivative positions as of March 31, 2022. The following table summarizes (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative liability positions as of December 31, 2021 were (in thousands):
|  | Gross Amounts |  | Gross Amounts Offset |  | Amounts Net of Offset |  | Financial Collateral |  | Net Amount
Liabilities |  |  |  |  |  |  |  |  |  |
Derivative contracts - current |  | $ | 200 |  |  | $ | 179 |  |  | $ | 21 |  |  | $ | — |  |  | $ | 21 |
Total |  | $ | 200 |  |  | $ | 179 |  |  | $ | 21 |  |  | $ | — |  |  | $ | 21 |
Because we did not designate any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in current period earnings. As a result, and as applicable, our current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period. Fair Value of Derivatives The following table presents the fair value of the Company’s derivative contracts on a net basis with the same counterparty (in thousands):
Type of Contract |  | Balance Sheet Classification |  | December 31, 2021 |  |
Derivative liabilities |  |  |  |  |  |
Natural Gas and NGL price swaps |  | Current liabilities - Derivative Contracts |  | $ | 21 |  |  |
Total net derivative contracts |  | $ | 21 |  |  |
See Note 2 for additional discussion of the fair value measurement of the Company’s derivative contracts.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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