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Commodity Price Riks Management
 6 Months Ended
Jun. 30, 2011
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
6) Commodity Price Risk Manageme...
6)      Commodity Price Risk Management

Through our wholly-owned affiliate Energy One, we have entered into three commodity derivative contracts ("economic hedges") with BNP Paribas ("BNP"), a costless collar and two fixed price swaps, as described below.  The three derivative contracts are priced using West Texas Intermediate ("WTI") quoted prices.  The Company is a guarantor of Energy One under the economic hedges.  The objective of utilizing the economic hedges is to reduce the effect of price changes on a portion of our future oil production, achieve more predictable cash flows in an environment of volatile oil and gas prices and to manage our exposure to commodity price risk. The use of these derivative instruments limits the downside risk of adverse price movements.  However, there is a risk that such use may limit our ability to benefit from favorable price movements. Energy One may, from time to time, add incremental derivatives to hedge additional production, restructure existing derivative contracts or enter into new transactions to modify the terms of current contracts in order to realize the current value of its existing positions. The Company does not engage in speculative derivative activities or derivative trading activities nor does it use derivatives with leveraged features.

Energy One's commodity derivative contracts as of June 30, 2011 are summarized below:
 
       
Quantity
      
Settlement Period
Counterparty
Basis
 
(Bbl/d)
 
Strike Price
 
              
Crude Oil Costless Collars
            
10/01/10 - 09/30/11
 BNP Paribas
 WTI
  200 
Put:
 $75.00 
          
Call:
 $83.25 
                
Crude Oil Swaps
              
10/01/10 - 09/30/11
 BNP Paribas
 WTI
  200 
Fixed:
 $79.05 
01/01/11 - 12/31/11
 BNP Paribas
 WTI
  200 
Fixed:
 $89.60 
 
The following table details the fair value of the derivatives recorded in the applicable condensed consolidated balance sheet, by category:
 
 
     
Fair Value at
 
Underlying
Location on
 
June 30,
 
Commodity
Balance Sheet
 
2011
 
       
Crude oil costless collar
Current Liability
 $245 
Crude oil swap #1
Current Liability
  314 
Crude oil swap #2
Current Liability
  268 
     $827 
        
 
Unrealized gains and losses resulting from derivatives are recorded at fair value on the condensed consolidated balance sheet and changes in fair value are recognized in the unrealized gain (loss) on risk management activities line on the condensed consolidated statement of operations. Realized gains and losses resulting from the contract settlement of derivatives are recorded in the commodity price risk management activities line on the condensed consolidated statement of income. There were no realized gains or losses recorded for the three and six months ending June 30, 2010.