The Company uses derivative financial instruments to manage its exposure to commodity price fluctuations. Commodity derivative instruments are used to reduce the effect of volatility of price changes on the oil and natural gas the Company produces and sells. The Company’s derivative financial instruments consist of oil gas swaps.

The Company does not enter into derivative financial instruments for speculative or trading purposes.

The Company does not designate its derivative instruments to qualify for hedge accounting. Accordingly, the Company reflects changes in the fair value of its derivative instruments in its consolidated statements of operations as they occur. Unrealized gains and losses related to the swap contracts are recognized and recorded as an asset or liability on the Company’s balance sheet.

The following table summarizes the net realized and unrealized amounts reported in earnings related to the commodity derivative instruments for the three and nine months ended September 30, 2020 and 2019:

	Three months ended September 30,					Nine months ended September 30,
	2020			2019		2020		2019
Gain (loss) on derivatives:
Oil derivatives	$	(103,165	)	$	492,530	$	2,003,505	$	917,482
Natural gas derivatives		—			332		—		7,749
Total	$	(103,165	)	$	492,862	$	2,003,505	$	925,231

The following represents the Company’s net cash receipts from derivatives for the three and nine months ended September 30, 2020 and 2019:

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net cash received from payments on derivatives
Oil derivatives	$	279,533	$	156,820	$	1,323,427	$	250,323
Natural gas derivatives		—		6,846		—		11,557
Total	$	279,533	$	163,666	$	1,323,427	$	261,880

The following table sets forth the Company’s outstanding derivative contracts at September 30, 2020. The Company has no outstanding natural gas derivatives. All of the Company’s derivatives are expected to settle by October 2021:

	1^st Quarter		2^nd Quarter		3^rd Quarter		4^th Quarter
2020
Oil Swaps:
Volume (MBbl)		—		—		—		15.78
Price per Bbl		—		—		—	$	55.18


2021
Oil Swaps:
Volume (MBbl)		15.26		15.18		5.20		—
Price per Bbl	$	49.40	$	50.87	$	38.25		—