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Derivative Instruments
 9 Months Ended
Sep. 30, 2013
Derivative Instruments [Abstract]  
Derivative Instruments
Note 5 - Derivative Instruments
 
We have entered into certain derivative or physical arrangements with respect to portions of our crude oil production to reduce our sensitivity to volatile commodity prices and/or to meet hedging requirements under our Credit Facility. We believe that these derivative arrangements, although not free of risk, allow us to achieve a more predictable cash flow and to reduce exposure to commodity price fluctuations. However, derivative arrangements limit the benefit of increases in the prices of crude oil. Moreover, our derivative arrangements apply only to a portion of our production.
 
We have an Intercreditor Agreement in place between us, our counterparties BP Corporation North America, Inc. (BP), Cargill, Inc. and our agent Texas Capital Bank, N.A., which allows Texas Capital Bank to also act as agent for BP or Cargill Inc. for the purpose of holding and enforcing any liens or security interests resulting from our derivative arrangements. Therefore, we are not required to post additional collateral, including cash.
 
The following derivative contracts were in place at September 30, 2013:
 
 
 
Term
 
Monthly Volumes
 
Price/Bbl
 
Fair Value
 
Crude oil swap
 
10/13-12/15
 
1,711Bbls
 
$
76.74
 
 
(871,272)
 
Crude oil swap
 
10/13-12/15
 
2,589Bbls
 
 
83.70
 
 
(670,495)
 
Crude oil collar
 
10/13-12/13
 
1,587Bbls
 
 
90.00-94.50
 
 
(40,453)
 
Crude oil swap
 
1/14-12/14
 
1,369Bbls
 
 
90.25
 
 
(99,975)
 
Crude oil swap
 
10/13-12/13
 
1,300Bbls
 
 
97.10
 
 
(22,880)
 
Crude oil swap
 
1/14-12/14
 
1,900Bbls
 
 
96.00
 
 
(8,170)
 
Crude oil swap
 
1/15-12/15
 
5,800Bbls
 
 
88.55
 
 
(40,948)
 
Crude oil swap
 
10/13-12/14
 
3,000Bbls
 
 
95.15
 
 
(113,850)
 
 
 
 
 
 
 
 
 
 
$
(1,868,043)
 
 
Monthly volume is the weighted average throughout the period.
 
The total fair value is shown as a derivative instrument in both the current and non-current liabilities on the balance sheet.