The Company utilizes commodity price swaps, basis swaps, swaptions and collars (purchased put options and written call options) to (i) reduce the effects of volatility in price changes on the crude oil commodities it produces and sells, (ii) reduce commodity price risk and (iii) provide a base level of cash flow in order to assure it can execute at least a portion of its capital spending.

All derivative instruments are recorded on the Company’s balance sheet as either assets or liabilities measured at their fair value (see Note 11). The Company has not designated any derivative instruments as hedges for accounting purposes and does not enter into such instruments for speculative trading purposes. If a derivative does not qualify as a hedge or is not designated as a hedge, the changes in the fair value are recognized in the revenues section of the Company’s statements of operations as a gain

or loss on derivative instruments. Mark-to-market gains and losses represent changes in fair values of derivatives that have not been settled. The Company’s cash flow is only impacted when the actual settlements under the derivative contracts result in making or receiving a payment to or from the counterparty. These cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

The following table presents cash settlements on matured or liquidated derivative instruments and non-cash gains and losses on open derivative instruments for the periods presented. Cash receipts and payments below reflect proceeds received upon early liquidation of derivative positions and gains or losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price of matured contracts. Non-cash gains and losses below represent the change in fair value of derivative instruments which continue to be held at period-end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured or were liquidated during the period.


	Year Ended December 31,
(In thousands)	2019		2018		2017
Cash Received (Paid) on Settled Derivatives ⁽¹⁾	$	44,377	$	(22,886)	$	3,776
Unrealized Gain (Loss) on Derivatives	(173,214)		207,892		(18,443)
Gain (Loss) on Derivative Instruments, Net	$	(128,837)	$	185,006	$	(14,667)

⁽¹⁾The year ended December 31, 2019, includes approximately $12.4 million of net cash proceeds from crude oil derivative contracts that were restructured in 2019 prior to their contractual maturities.

The Company has master netting agreements on individual commodity contracts with certain counterparties and therefore the current asset and liability are netted on the balance sheet and the non-current asset and liability are netted on the balance sheet for contracts with these counterparties.

As of December 31, 2019, the Company had a total volume on open commodity price swaps of 17.3 million barrels at a weighted average price of approximately $56.77 per barrel. The following table reflects the weighted average price of open commodity price swap derivative contracts as of December 31, 2019, by year with associated volumes.


Weighted Average Price of Open Commodity Swap Contracts
Year	Volumes (Bbl)	Weighted Average Price ($)
2020	9,815,844	57.98
2021⁽¹⁾	6,151,174	55.78
2022⁽²⁾	1,372,866	52.57

⁽¹⁾The Company has entered into crude oil derivative contracts that give counterparties the option to extend certain current derivative contracts for additional periods. Options covering a notional volume of 0.1 million barrels for 2021 are exercisable on or about December 31, 2020. If the counterparties exercise all such options, the notional volume of the Company’s existing crude oil derivative contracts will increase by 0.1 million barrels at a weighted average price of $57.63 per barrel for 2021.

⁽²⁾The Company has entered into crude oil derivative contracts that give counterparties the option to extend certain current derivative contracts for additional periods. Options covering a notional volume of 2.4 million barrels for 2022 are exercisable on or about December 31, 2021. If the counterparties exercise all such options, the notional volume of the Company’s existing crude oil derivative contracts will increase by 2.4 million barrels at a weighted average price of $55.05 per barrel for 2022.

The following table sets forth the amounts, on a gross basis, and classification of the Company’s outstanding derivative financial instruments at December 31, 2019 and 2018, respectively. Certain amounts may be presented on a net basis on the financial statements when such amounts are with the same counterparty and subject to a master netting arrangement:


		December 31, Estimated Fair Value
Type of Crude Oil Contract	Balance Sheet Location	2019		2018

Derivative Assets:		(In thousands)
Price Swap Contracts	Current Assets	$	20,164	$	108,514
Basis Swap Contracts	Current Assets	—		7,356
Price Swap Contracts	Noncurrent Assets	16,069		61,843


Total Derivative Assets		$	36,233	$	177,713

Derivative Liabilities:
Price Swap Contracts	Current Liabilities	$	(25,834)	$	—

Price Swap Contracts	Noncurrent Liabilities	(5,273)		—
Price Swaptions Contracts	Noncurrent Liabilities	(10,321)		—

Total Derivative Liabilities		$	(41,428)	$	—

The use of derivative transactions involves the risk that the counterparties will be unable to meet the financial terms of such transactions. When the Company has netting arrangements with its counterparties that provide for offsetting payables against receivables from separate derivative instruments these assets and liabilities are netted on the balance sheet. The tables presented below provide reconciliation between the gross assets and liabilities and the amounts reflected on the balance sheet. The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.


	Estimated Fair Value at December 31, 2019
(In thousands)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:
Current Assets	$	20,164	$	(14,536)	$	5,628
Non-Current Assets	16,069		(7,515)		8,554
Total Derivative Assets	$	36,233	$	(22,051)	$	14,182

Offsetting of Derivative Liabilities:
Current Liabilities	$	(25,834)	$	14,536	$	(11,298)
Non-Current Liabilities	(15,594)		7,515		(8,079)
Total Derivative Liabilities	$	(41,428)	$	22,051	$	(19,377)


	Estimated Fair Value at December 31, 2018
(In thousands)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Offsetting of Derivative Assets:
Current Assets	$	116,620	$	(750)	$	115,870
Non-Current Assets	61,857		(15)		61,843
Total Derivative Assets	$	178,477	$	(764)	$	177,713

Offsetting of Derivative Liabilities:
Current Liabilities	$	(750)	$	750	$	—
Non-Current Liabilities	(15)		15		—
Total Derivative Liabilities	$	(764)	$	764	$	—

All of the Company’s outstanding derivative instruments are covered by International Swap Dealers Association Master Agreements (“ISDAs”). The Company’s obligations under the derivative instruments are secured pursuant to the Company’s Revolving Credit Facility, and no additional collateral had been posted by the Company as of December 31, 2019. The ISDAs may provide that as a result of certain circumstances, such as cross-defaults, a counterparty may require all outstanding derivative instruments under an ISDA to be settled immediately. See Note 11 for the aggregate fair value of all derivative instruments that were in a net liability position at December 31, 2019 and 2018.