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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2014
Fair Value Measurements [Abstract] |
Fair Value Measurements | 6) Fair Value Measurements We follow authoritative guidance regarding fair value measurements for all assets and liabilities measured at fair value. That guidance establishes a fair value hierarchy that prioritizes the inputs the Company uses to measure fair value based on the significance level of the following inputs:
· | Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets.
· | Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs or significant value drivers are observable.
· | Level 3 - Significant inputs to the valuation model are unobservable.
Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the nonfinancial assets and liabilities and their placement in the fair value hierarchy levels. We determine our estimate of the fair value of derivative instruments using a market approach based on several factors, including quoted prices in active markets, and quotes from third parties. The following tables list the Company's assets and liabilities that are measured at fair value and their classification within the fair value hierarchy as of September 30, 2014 and December 31, 2013:
|  | (In thousands) |
|  |  |  |  | Fair Value Measurements at September 30, 2014 Using |
|  | September 30, |  |  |  |  |  |  |  |  |  |
Description |  | 2014 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Commodity risk management assets |  | $ | 118 |  |  | $ | -- |  |  | $ | 118 |  |  | $ | -- |
Available for sale securities |  |  | 35 |  |  |  | 35 |  |  |  | -- |  |  |  | -- |
Total assets |  | $ | 153 |  |  | $ | 35 |  |  | $ | 118 |  |  | $ | -- |
Commodity risk management liability |  | $ | 14 |  |  | $ | -- |  |  | $ | 14 |  |  | $ | -- |
Executive retirement program liability |  |  | 1,345 |  |  |  | -- |  |  |  | -- |  |  |  | 1,345 |
Total liabilities |  | $ | 1,359 |  |  | $ | -- |  |  | $ | 14 |  |  | $ | 1,345 |
|  |  |  |  |  | Fair Value Measurements at December 31, 2013 Using |
|  | December 31, |  |  |  |  |  |  |  |  |  |  |  |  |
Description |  |  | 2013 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Commodity risk management assets |  | $ | 14 |  |  | $ | -- |  |  | $ | 14 |  |  | $ | -- |
Available for sale securities |  |  | 69 |  |  |  | 69 |  |  |  | -- |  |  |  | -- |
Total assets |  | $ | 83 |  |  | $ | 69 |  |  | $ | 14 |  |  | $ | -- |
Commodity risk management liability |  | $ | 280 |  |  | $ | -- |  |  | $ | 280 |  |  | $ | -- |
Executive retirement program liability |  |  | 865 |  |  |  | -- |  |  |  | -- |  |  |  | 865 |
Total liabilities |  | $ | 1,145 |  |  | $ | -- |  |  | $ | 280 |  |  | $ | 865 |
Fair Value of Available for Sale Securities The fair value of available for sale securities is based on quoted market prices obtained from independent pricing services. Accordingly, the Company has classified these instruments as Level 1. Fair Value of Commodity Derivative Instruments The Company determines its estimate of the fair value of derivative instruments using a market approach based on several factors, including quoted market prices in active markets, quotes from third parties, the credit rating of the counterparty and the Company's own credit rating. In consideration of counterparty credit risk, the Company assessed the likelihood that the counterparty to the derivative would default by failing to make any contractually required payments. Additionally, the Company considers that it is of substantial credit quality and has the financial resources and willingness to meet its potential repayment obligations associated with the derivative transactions. At September 30, 2014 and December 31, 2013, derivative instruments utilized by the Company consist of "no premium" collars. The crude oil derivative markets are highly active. Although the Company's derivative instruments are valued using indices, the instruments themselves are traded with third-party counterparties and are not openly traded on an exchange. As such, the Company has classified these instruments as Level 2. Fair Value of Executive Retirement Program The executive retirement program is a standalone liability for which there is no available market price, principal market, or market participants. The Company records the estimated fair value of the long-term liability for estimated future payments under the executive retirement program based on the discounted value of estimated future payments associated with each individual in the program. The inputs available for this estimate are unobservable and are therefore classified as Level 3 inputs. Fair Value of Financial Instruments Our other financial instruments include cash and cash equivalents, accounts receivable, accounts payable, other current liabilities and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate fair value because of their immediate or short-term maturities. The carrying value of our debt approximates its fair market value as it bears interest at variable rates over the term of the loan. The fair value and carrying value of our debt was $8.0 million as of September 30, 2014.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13504-108611 + Details
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