Fair-Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair-Value Measurements

18. Fair-Value Measurements

We classify financial assets and liabilities into the following three levels based on the inputs used to measure fair value:    

(1)    Level 1 fair values are based on observable inputs such as quoted prices in active markets for identical assets and liabilities;

(2)    Level 2 fair values are based on pricing inputs other than quoted prices in active markets for identical assets and liabilities and are either directly or indirectly observable as of the measurement date; and

(3)    Level 3 fair values are based on unobservable inputs in which little or no market data exists.

As required by fair value accounting guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2012 and 2011.

	December 31, 2012							December 31, 2011
Recurring Fair Value Measures	Level 1			Level 2		Level 3		Level 1			Level 2		Level 3
Commodity derivatives:
Assets	$	758		$	—	$	—	$	306		$	—	$	—
Liabilities	$	(3,357	)	$	—	$	—	$	(2,820	)	$	—	$	—

Our commodity derivatives include exchange-traded futures and exchange-traded options contracts. The fair value of these exchange-traded derivative contracts is based on unadjusted quoted prices in active markets and is, therefore, included in Level 1 of the fair value hierarchy.

During 2010, we settled our interest rate swaps, which were classified as Level 3 fair value measurements. The following table provides a reconciliation of changes in fair value of our interest rate swaps during 2010.

See Note 17 for additional information on our derivative instruments.

	Year Ended December 31,
	2010
Balance at beginning of period	$	(1,688	)
Realized and unrealized gains (losses)
Reclassified into interest expense for settled contracts	2,112
Included in other comprehensive income (loss)	(424		)
Balance at end of period	$	—

Nonfinancial Assets and Liabilities

We utilize fair value on a non-recurring basis to perform impairment tests as required on our property, plant and equipment, goodwill and intangible assets. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified in Level 3, in the event that we were required to measure and record such assets within our Consolidated Financial Statements. Additionally, we use fair value to determine the inception value of our asset retirement obligations. The inputs used to determine such fair value are primarily based upon costs incurred historically for similar work, as well as estimates from independent third parties for costs that would be incurred to restore leased property to the contractually stipulated condition, and would generally be classified in Level 3.

Other Fair Value Measurements

We believe the debt outstanding under our credit facility approximates fair value as the stated rate of interest approximates current market rates of interest for similar instruments with comparable maturities. At December 31, 2012 our senior unsecured notes had a carrying value of $350.9 million and a fair value of $373.2 million, compared to $250 million and $253.1 million, respectively at December 31, 2011. The fair value of the senior unsecured notes is determined based on trade information in the financial markets of our public debt and is considered a Level 2 fair value measurement.