Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2012

Derivative Financial Instruments

Volume of Commodity Derivative Activity

As of December 31, 2012, the Partnership had the following outstanding commodity contracts that were executed to manage the cash flow risk associated with future sales of NGLs or future purchases of natural gas.

Derivative contracts not designated as hedging instruments	Position	Notional Quantity (net)
Crude Oil (bbl)	Short		3,470,375
Natural Gas (MMBtu)	Long		5,655,676
NGLs (gal)	Short		78,012,934

Reconciliation of liability recorded for embedded derivative

See the following table for a reconciliation of the liability recorded for the embedded derivative as of December 31, 2012 (in thousands).

Fair value of commodity contract	$	93,610
Inception value for period from April 1, 2015 to December 31, 2022.		(53,507	)
Derivative liability as of December 31, 2012	$	40,103

Derivative contracts not designated as hedging instruments

The impact of the Partnership's derivative instruments on its Consolidated Balance Sheets and Statements of Operations are summarized below (in thousands):

	Assets				Liabilities
Derivative contracts not designated as hedging instruments and their balance sheet location	Fair Value at December 31, 2012		Fair Value at December 31, 2011		Fair Value at December 31, 2012			Fair Value at December 31, 2011
Commodity contracts(1)
Fair value of derivative instruments—current	$	19,504	$	8,698	$	(27,229	)	$	(90,551	)
Fair value of derivative instruments—long-term		10,878		16,092		(32,190	)		(65,403	)
Total	$	30,382	$	24,790	$	(59,419	)	$	(155,954	)

(1) Includes Embedded Derivatives in Commodity Contracts as discussed above.

	Year ended December 31,
Derivative contracts not designated as hedging instruments and the location of gain or (loss) recognized in income	2012			2011			2010
Revenue: Derivative gain (loss)
Realized loss	$	(6,508	)	$	(48,093	)	$	(33,560	)
Unrealized gain (loss)		63,043			19,058			(20,372	)
Total revenue: derivative gain (loss)		56,535			(29,035	)		(53,932	)
Derivative gain (loss) related to purchased product costs
Realized (loss)		(26,493	)		(27,711	)		(21,909	)
Unrealized gain (loss)		40,455			(25,249	)		(5,804	)
Total derivative gain (loss) related to purchase product costs		13,962			(52,960	)		(27,713	)
Derivative (loss) gain related to facility expenses
Unrealized (loss) gain		(1,371	)		6,480			1,295
Derivative gain related to interest expense
Realized gain		—			—			2,380
Unrealized loss		—			—			(509	)
Total derivative gain related to interest expense		—			—			1,871
Miscellaneous income, net
Unrealized gain		—			—			190
Total gain (loss)	$	69,126		$	(75,515	)	$	(78,289	)