Note 15 - Fair Value Measurements and Disclosures

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 15 —Fair Value Measurements and Disclosures

The Company records certain of its assets and liabilities on the balance sheet at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A three-level valuation hierarchy has been established to allow readers to understand the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

●	Level 1 —	Fair value measurements which use quoted market prices (unadjusted) in active markets for identical assets or liabilities.
●	Level 2 —	Fair value measurements which use inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly.
●	Level 3 —	Fair value measurements which use unobservable inputs.

The following describes the valuation methodologies the Company uses for its fair value measurements.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and any highly liquid investments with an original maturity of 90 days or less. The carrying amount approximates fair value because of the short maturity of these instruments.

Restricted Cash

Restricted cash includes all cash balances which are associated with the Company’s long-term assets, short-term debt and long-term debt. The carrying amount approximates fair value because the nature of the restricted cash balance is the same as cash. The fair value of restricted cash is measured using Level 1 inputs within the three-level valuation hierarchy.

Derivative Financial Instruments   

The Company’s derivative financial instruments consist of variable financing arranger fee payments that are dependent on the change in oil prices from the loan origination date of the Company’s $40.0 million secured debt facility (through July 2013), the $75.0 million secured debt facility (through July 2014) and the oil price on each repayment date. The Company estimated the fair value of these payments based on published forward commodity price curves at each financial reporting date. The discount rate used to discount the associated cash flows was based on the Company’s credit-adjusted risk-free rate. Accordingly, these derivatives are considered to be a Level 2 measurement on the fair value hierarchy. For further information regarding the Company’s derivatives, see Note-13, “Derivative Financial Instruments.”

Measurement information for assets and liabilities that are measured at fair value on a recurring basis was as follows:

		Fair Value Measurements Using:
		Quoted		Significant
		Prices in		Other		Significant
		Active		Observable		Unobservable
	Balance Sheet	Markets		Inputs		Inputs
	Location	(Level 1)		(Level 2)		(Level 3)
		(in thousands)
December 31, 2014
Financial Liabilities
Derivative Financial Instruments
	Current Liabilities	$	-	$	-	$	-
	Non-current Liabilities		-		-		-
	Total	$	-	$	-	$	-
December 31, 2013
Financial Liabilities
Derivative Financial Instruments
	Current Liabilities	$	-	$	30	$	-
	Non-current Liabilities		-		-		-
	Total	$	-	$	30	$	-

Non-Financial Assets and Liabilities

The Company discloses or recognizes its non-financial assets and liabilities, such as impairments of long-lived assets, at fair value on a non-recurring basis. The following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. None of the Company’s non-financial assets and liabilities were impaired during the year ended December 31, 2013.

	Fair Value Measurements Using:
	Quoted		Significant
	Prices in		Other		Significant
	Active		Observable		Unobservable
	Markets		Inputs		Inputs		Before-Tax
	(Level 1)		(Level 2)		(Level 3)(a)		Loss
	(in thousands)
For the Year Ended December 31, 2014
Long-lived assets held for use - Power plant and related equipment	$	-	$	-	$	32,801	$	58,000

(a) Represents fair value at the time of impairment.

The long-lived assets held for use are impaired to their fair values. The fair value was measured using an probability weighted average income approach and considered project specific assumptions for future project operating revenues and costs and expected plant construction and operations, anticipated proceeds in the event a sale of the assets, including a liquidation scenario, and the estimated value to be received in the event the assets were included in a joint venture operation.

Additional Fair Value Disclosures

Debt with Fixed Interest Rates

The fair value information regarding the Company’s fixed rate debt is as follows:

	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)				(in thousands)
Convertible Notes, 8.5%, due October 2017, net of discount of ($13.9) million at December 31, 2014 and ($18.3) million at December 31, 2013 (1)	$	154,839	$	57,361	$	125,416	$	130,094
Convertible Notes, 6.5%, due March 2015, net of discount of ($0.4) million at December 31, 2014 and ($4.4) million at December 31, 2013 (2)		59,473		20,662		81,523		79,663

(1) The Company estimated the fair value of the 2017 Convertible Notes to be approximately $57.4 million and $130.1 million at December 31, 2014 and December 31, 2013, respectively, based on observed market prices for the same or similar types of debt issues. The fair value of the 2017 Convertible Notes is considered to be a Level 1 measurement on the fair value hierarchy.

(2) The Company estimated the fair value of the 2015 Convertible Notes to be approximately $20.7 million and $79.7 million at December 31, 2014 and December 31, 2013, respectively, based on observed market prices for the same or similar types of debt issues. The fair value of the 2015 Convertible Notes is considered to be a Level 1 measurement on the fair value hierarchy.