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Commodity Price Risk Management | 9 Months Ended
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Sep. 30, 2012
Commodity Price Risk Management [Abstract] |
Commodity Price Risk Management | 6) Commodity Price Risk Management Through our wholly-owned subsidiary Energy One, we have entered into commodity derivative contracts ("economic hedges") with BNP Paribas ("BNP") and Wells Fargo, as described below. The derivative contracts are priced using West Texas Intermediate ("WTI") quoted prices. The Company is a guarantor of Energy One's obligations 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 September 30, 2012 are summarized below:
|  |  |  |  |  | Quantity |  |  |  |  |
Settlement Period |  | Counterparty |  | Basis |  | (Bbl/d) |  | Strike Price |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |
01/01/12 - 12/31/12 |  | BNP Parabis |  | WTI |  |  | 200 |  | Put: |  | $ | 90.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 106.50 |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |  |  |
10/01/12 - 03/31/13 |  | Wells Fargo |  | WTI |  |  | 200 |  | Put: |  | $ | 85.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 101.00 |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |  |  |
01/01/13 - 06/30/13 |  | Wells Fargo |  | WTI |  |  | 200 |  | Put: |  | $ | 90.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 105.75 |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |  |  |
10/01/12 - 09/30/13 |  | BNP Parabis |  | WTI |  |  | 200 |  | Put: |  | $ | 95.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 116.60 |
Subsequent to September 30, 2012, Energy One entered into three commodity derivative contracts as reflected in the following table:
|  |  |  |  |  | Quantity |  |  |  |  |
Settlement Period |  | Counterparty |  | Basis |  | (Bbl/d) |  | Strike Price |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |
04/01/13 - 06/30/13 |  | Wells Fargo |  | WTI |  |  | 200 |  | Put: |  | $ | 90.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 97.50 |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |  |  |
06/01/13 - 09/30/13 |  | Wells Fargo |  | WTI |  |  | 400 |  | Put: |  | $ | 90.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 97.50 |
Crude Oil Costless Collar |  |  |  |  |  |  |  |  |  |  |  |  |
10/01/13 - 12/31/13 |  | Wells Fargo |  | WTI |  |  | 600 |  | Put: |  | $ | 90.00 |
|  |  |  |  |  |  |  |  | Call: |  | $ | 97.50 |
The following table details the fair value of the derivatives recorded in the applicable condensed consolidated balance sheet, by category:
| As of September 30, 2012
| (in thousands)
| Derivative Assets | Derivative Liabilities
| Balance Sheet |  | Fair | Balance Sheet |  | Fair
| Classification |  | Value | Classification |  | Value
Crude oil costless collars | Current Asset |  | $ 635 | Current Liability | $ --
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.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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