COMMODITY PRICE RISK MANAGEMENT

12 Months Ended

Dec. 31, 2014

COMMODITY PRICE RISK MANAGEMENT [Abstract]

COMMODITY PRICE RISK MANAGEMENT

E.COMMODITY PRICE RISK MANAGEMENT

Through our wholly-owned subsidiary Energy One, we have entered into commodity derivative contracts ("economic hedges") with 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.

The following table details the fair value of the derivatives recorded in the applicable consolidated balance sheet, by category as of December 31, 2013.  There were no derivative contracts in place at December 31, 2014.

		As of December 31, 2013
		(in thousands)
Underlying Commodity	Location on Balance Sheet	Gross amounts of recognized assets and liabilities		Gross amounts offset in the consolidated balance sheet			Net amounts of assets and liabilities presented in the consolidated balance sheet
Crude oil derivative contract	Current assets	$	345	$	(331	)	$	14
Crude oil derivative contract	Current liabilities	$	611	$	(331	)	$	280

Unrealized gains and losses resulting from derivatives are recorded at fair value on the consolidated balance sheet and changes in fair value are recognized in the unrealized gain (loss) on risk management activities line on the consolidated statement of operations.  Realized gains and losses resulting from the contract settlement of derivatives are recognized in the commodity price risk management activities line on the consolidated statement of operations. The following table summarizes the unrealized and realized derivative (gain) loss presented in the accompanying statements of operations:

	(In thousands)
	For the years ended December 31,
	2014		2013			2012
Realized derivative (loss) gain	$	316	$	(338	)	$	21
Unrealized derivative (loss) gain	$	266	$	(737	)	$	1,070
Total realized and unrealized derivative (loss) gain	$	582	$	(1,075	)	$	1,091