Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2011


Commodity	Instrument	Unit	2011		2012		2013

Natural gas	Calls	MMBtu/d		10,000		—		—
Natural gas	Call Spreads	MMBtu/d		7,100		—		—
Natural gas	Swaps	MMBtu/d		10,000		—		—
NGLs	Puts	Bbl/d		7,950		5,000		1,650
NGLs	Swaps	Bbl/d		1,500		—		—
Crude oil	Puts	Bbl/d		2,700		1,500		750


Commodity	Instrument	Unit	2011		2012		2013

Natural gas	Calls	MMBtu/d		10,000		—		—
Natural gas	Call Spreads	MMBtu/d		7,100		—		—
Natural gas	Swaps	MMBtu/d		10,000		—		—
NGLs	Puts	Bbl/d		7,950		3,500		—
NGLs	Swaps	Bbl/d		1,500		—		—
Crude oil	Puts	Bbl/d		2,700		1,500		400

Fair value measurements on hedging instruments


	Fair Value Measurements on Hedging Instruments(a)
	September 30, 2011
	Level 1		Level 2			Level 3		Total
	(In thousands)

Assets:
Natural Gas:
Short-term — Designated^(b)	$	—	$	—		$	—	$	—
Short-term — Not designated^(b)		—		—			—		—
Long-term — Designated^(c)		—		—			—		—
Long-term — Not designated^(c)		—		—			—		—
Natural Gas Liquids:
Short-term — Designated^(b)		—		—			5,076		5,076
Short-term — Not designated^(b)		—		—			1,285		1,285
Long-term — Designated^(c)		—		—			8,947		8,947
Long-term — Not designated^(c)		—		—			611		611
Crude Oil:
Short-term — Designated^(b)		—		—			4,417		4,417
Short-term — Not designated^(b)		—		—			1,323		1,323
Long-term — Designated^(c)		—		—			7,074		7,074
Long-term — Not designated^(c)		—		—			496		496

Total	$	—	$	—		$	29,229	$	29,229

Liabilities:
Natural Gas:
Short-term — Not designated^(d)	$	—	$	129		$	—	$	129
Natural Gas Liquids:
Short-term — Designated^(d)		—		—			2,730		2,730
Long-term — Designated^(e)		—		—			—		—
Interest Rate:
Short-term — Not designated^(d)		—		4,426			—		4,426
Long-term — Not designated^(e)		—		176			—		176

Total	$	—	$	4,731		$	2,730	$	7,461

Total designated assets	$	—	$	—		$	22,784	$	22,784

Total not designated (liabilities)/assets	$	—	$	(4,731	)	$	3,715	$	(1,016	)


(a)		Instruments re-measured on a recurring basis.

(b)		Included on the consolidated balance sheets as a current asset under the heading of “Risk management assets.”

(c)		Included on the consolidated balance sheets as a noncurrent asset under the heading of “Risk management assets.”

(d)		Included on the consolidated balance sheets as a current liability under the heading of “Risk management liabilities.”


(e)		Included on the consolidated balance sheets as a noncurrent liability under the heading of “Risk management and other noncurrent liabilities.”


	Fair Value Measurements on Hedging Instruments(a)
	December 31, 2010
	Level 1		Level 2			Level 3		Total
			(In thousands)

Assets:
Natural Gas:
Short-term — Designated^(b)	$	—	$	—		$	87	$	87
Natural Gas Liquids:
Short-term — Designated^(b)		—		—			6,812		6,812
Short-term — Not designated^(b)		—		—			14		14
Long-term — Designated^(c)		—		—			6,391		6,391
Crude Oil:
Short-term — Designated^(b)		—		—			904		904
Short-term — Not designated^(b)		—		—			19		19
Long-term — Designated^(c)		—		—			5,552		5,552

Total	$	—	$	—		$	19,779	$	19,779

Liabilities:
Natural Gas:
Short-term — Not designated^(d)	$	—	$	82		$	—	$	82
Natural Gas Liquids:
Short-term — Designated^(d)		—		—			4,867		4,867
Interest Rate:
Short-term — Not designated^(d)		—		4,408			—		4,408
Long-term — Not designated^(e)		—		2,469			—		2,469

Total	$	—	$	6,959		$	4,867	$	11,826

Total designated assets	$	—	$	—		$	14,879	$	14,879

Total not designated (liabilities)/assets	$	—	$	(6,959	)	$	33	$	(6,926	)


(a)		Instruments re-measured on a recurring basis.

(b)		Included on the consolidated balance sheets as a current asset under the heading of “Risk management assets.”

(c)		Included on the consolidated balance sheets as a noncurrent asset under the heading of “Risk management assets.”

(d)		Included on the consolidated balance sheets as a current liability under the heading of “Risk management liabilities.”

(e)		Included on the consolidated balance sheets as a noncurrent liability under the heading of “Risk management and other noncurrent liabilities.”

Fair value, Assets Measured on Recurring and Nonrecurring Basis


	Fair Value Measurements of
	Impairments(a)
	September 30, 2011
	Level 3		Impairment Expense
	(In thousands)

Long-lived assets^(b)	$	383,199	$	165,000
Long-lived intangible assets^(c)		29,406		5,000


(a)		Measured on a non-recurring basis.

(b)		Impairments of equity investments in Bighorn and Fort Union are included on the consolidated balance sheets as a noncurrent asset under “Investments in unconsolidated affiliates” and on the consolidated statements of operations under “Equity in loss (earnings) from unconsolidated affiliates.”

(c)		Impairment of contract is included on the consolidated balance sheets as a noncurrent asset under “Intangible assets, net” and on the consolidated statements of operations under “Depreciation, amortization and impairment.”

Reconciliation of changes in the fair value of derivatives classified as level 3 in the fair value hierarchy


	Three Months Ended September 30, 2011
	Natural Gas			Natural Gas Liquids			Crude Oil			Total
	(In thousands)

Assets balance, beginning of period	$	4		$	7,043		$	5,280		$	12,327
Total gains or losses:
Non-cash amortization of option premium		(1,486	)		(3,953	)		(2,004	)		(7,443	)
Other amounts included in earnings		—			(2,112	)		1,583			(529	)
Included in accumulated other comprehensive loss		1,482			7,768			8,452			17,702
Purchases		—			1,561			—			1,561
Settlements		—			2,881			—			2,881

Asset balance, end of period	$	—		$	13,188		$	13,311		$	26,499

Change in unrealized income included in earnings related to instruments still held as of the end of the period	$	—		$	(181	)	$	(267	)	$	(448	)


	Nine Months Ended September 30, 2011
	Natural Gas			Natural Gas Liquids			Crude Oil			Total
	(In thousands)

Assets balance, beginning of period	$	87		$	8,350		$	6,475		$	14,912
Total gains or losses:
Non-cash amortization of option premium		(4,409	)		(11,714	)		(5,946	)		(22,069	)
Other amounts included in earnings		—			(7,211	)		2,373			(4,838	)
Included in accumulated other comprehensive loss		4,322			7,245			8,609			20,176
Purchases		—			8,925			1,800			10,725
Settlements		—			7,593			—			7,593

Asset balance, end of period	$	—		$	13,188		$	13,311		$	26,499

Change in unrealized (income) loss included in earnings related to instruments still held as of the end of the period	$	—		$	(495	)	$	(208	)	$	(703	)


	Three Months Ended September 30, 2010
	Natural Gas			Natural Gas Liquids			Crude Oil			Total
	(In thousands)

Assets balance, beginning of period	$	653		$	36,237		$	21,529		$	58,419
Total gains or losses:
Non-cash amortization of option premium		(1,489	)		(4,154	)		(2,520	)		(8,163	)
Other amounts included in earnings		—			5,699			5,063			10,762
Included in accumulated other comprehensive loss		954			(15,048	)		(6,733	)		(20,827	)
Purchases		—			2,051			1,315			3,366
Settlements		—			(5,752	)		(5,382	)		(11,134	)

Asset balance, end of year	$	118		$	19,033		$	13,272		$	32,423

Change in unrealized loss (income) included in earnings related to instruments still held as of the end of the period	$	—		$	(135	)	$	316		$	181


	Nine Months Ended September 30, 2010
	Natural Gas			Natural Gas Liquids			Crude Oil			Total
	(In thousands)

Assets balance, beginning of period	$	2,752		$	15,641		$	24,213		$	42,606
Total gains or losses:
Non-cash amortization of option premium		(4,417	)		(12,317	)		(7,476	)		(24,210	)
Other amounts included in earnings		—			12,332			15,283			27,615
Included in accumulated other comprehensive loss		1,783			6,208			(8,069	)		(78	)
Purchases		—			9,433			4,740			14,173
Settlements		—			(12,264	)		(15,419	)		(27,683	)

Asset balance, end of period	$	118		$	19,033		$	13,272		$	32,423

Change in unrealized (income) loss included in earnings related to instruments still held as of the end of the period	$	—		$	(165	)	$	470		$	305

The effect of derivative instruments on statements of operations

The Effect of Derivative Instruments on the Statements of Operations


							Amount of Gain
							(Loss) Recognized
							in Income
							on Derivative
	Amount of Gain			Amount of Gain			(Ineffective Portion
	(Loss) Recognized			(Loss) Reclassified			and Amount
Derivatives in	in OCI on			from Accumulated			Excluded from
ASC 815 Cash Flow	Derivatives			OCI into Income			Effectiveness			Statements of
Hedging Relationships	(Effective Portion)			(Effective Portion)			Testing)			Operations Location
(In thousands)

*Three Months Ended September 30, 2011*
Natural gas	$	(5	)	$	(1,486	)	$	—		Natural gas sales
Natural gas liquids		1,102			(6,667	)		213		Natural gas liquids sales
Crude oil		6,901			(1,550	)		518		Condensate and other
Interest rate swaps		—			(74	)		—		Interest and other financing costs

Total	$	7,998		$	(9,777	)	$	731

*Nine Months Ended September 30, 2011*
Natural gas	$	(88	)	$	(4,410	)	$	—		Natural gas sales
Natural gas liquids		(11,496	)		(18,755	)		(104	)	Natural gas liquids sales
Crude oil		3,926			(4,682	)		558		Condensate and other
Interest rate swaps		—			(254	)		—		Interest and other financing costs

Total	$	(7,658	)	$	(28,101	)	$	454

*Three Months Ended September 30, 2010*
Natural gas	$	(535	)	$	(1,489	)	$	—		Natural gas sales
Natural gas liquids		(12,869	)		2,179			(116	)	Natural gas liquids sales
Crude oil		(3,764	)		2,971			(39	)	Condensate and other
Interest rate swaps		—			(117	)		—		Interest and other financing costs

Total	$	(17,168	)	$	3,544		$	(155	)

*Nine Months Ended September 30, 2010*
Natural gas	$	(2,634	)	$	(4,417	)	$	—		Natural gas sales
Natural gas liquids		6,784			577			(145	)	Natural gas liquids sales
Crude oil		(220	)		7,847			68		Condensate and other
Interest rate swaps		—			(371	)		—		Interest and other financing costs

Total	$	3,930		$	3,636		$	(77	)

The Effect of Derivative Instruments on the Statements of Operations


	Amount of Gain
Derivatives Not Designated as	(Loss) Recognized in			Statements of
Hedging Instruments Under ASC 820	Income on Derivative			Operations Location
	(In thousands)

*Three Months Ended September 30, 2011*
Natural gas	$	(34	)	Natural gas sales
Natural gas liquids		556		Natural gas liquids sales
Crude oil		1,065		Condensate and other
Interest rate swaps		(54	)	Interest and other financing costs

Total	$	1,533

*Nine Months Ended September 30, 2011*
Natural gas	$	(162	)	Natural gas sales
Natural gas liquids		472		Natural gas liquids sales
Crude oil		1,814		Condensate and other
Interest rate swaps		(617	)	Interest and other financing costs

Total	$	1,507

*Three Months Ended September 30, 2010*
Natural gas	$	(15	)	Natural gas sales
Natural gas liquids		63		Natural gas liquids sales
Crude oil		(281	)	Condensate and other
Interest rate swaps		(1,101	)	Interest and other financing costs

Total	$	(1,334	)

*Nine Months Ended September 30, 2010*
Natural gas	$	(123	)	Natural gas sales
Natural gas liquids		214		Natural gas liquids sales
Crude oil		(205	)	Condensate and other
Interest rate swaps		(3,089	)	Interest and other financing costs

Total	$	(3,203	)

- Definition

This element represents the disclosure related to assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring and/or nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a),(b)

-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19190-110258

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 5

-Subparagraph (a),(b)

-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 33

-Subparagraph a, b

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 6

-Footnote 4

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income, and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References+ Details