Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair value hierarchy for financial instruments measured at fair value on a recurring basis

The fair value hierarchy for our financial assets and liabilities is shown by the following table:

	As of September 30, 2012								As of December 31, 2011
	Derivative assets			Derivative liabilities			Net assets (liabilities)		Derivative assets			Derivative liabilities			Net assets (liabilities)
Significant other observable inputs (Level 2)	$	21,623		$	(6,433	)	$	15,190	$	33,956		$	(11,012	)	$	22,944
Significant unobservable inputs (Level 3)	25,529			—			25,529		6,296			(1,247		)	5,049
Netting adjustments (1)	(4,634		)	4,634			—		(10,627		)	10,627			—
	$	42,518		$	(1,799	)	$	40,719	$	29,625		$	(1,632	)	$	27,993

___________

(1) Amounts represent the impact of master netting agreements that allow us to net settle positive and negative positions with the same counterparty.

Level 3 rollforward

Changes in the fair value of our collars classified as Level 3 in the fair value hierarchy during the nine months ended September 30, 2012 and 2011 were: 

	For the nine months ended September 30,
Net derivative assets	2012			2011
Beginning balance	$	5,049		$	1,509
Unrealized gains included in non-hedge derivative gains	26,191			16,401
Settlements received	(5,711		)	(916		)
Ending balance	$	25,529		$	16,994
Gains relating to instruments still held at the reporting date included in non-hedge derivative gains for the period	$	21,033		$	16,598

Fair value of other financial instruments

Our significant financial instruments, other than derivatives, consist primarily of cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. We believe the carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair values due to the short-term maturities of these instruments.

The carrying value and estimated fair value of our long-term debt at September 30, 2012 and December 31, 2011 were as follows:

	September 30, 2012				December 31, 2011
Level 2	Carrying value		Estimated fair value		Carrying value		Estimated fair value
8.875% Senior Notes due 2017	$	—	$	—	$	323,342	$	326,625
9.875% Senior Notes due 2020	293,908		340,500		293,559		322,500
8.25% Senior Notes due 2021	400,000		432,000		400,000		402,400
7.625% Senior Notes due 2022	400,000		426,000		—		—
Senior secured revolving credit facility	118,000		118,000		—		—
Other secured long-term debt	18,511		18,511		17,672		17,672
	$	1,230,419	$	1,335,011	$	1,034,573	$	1,069,197

Concentrations of counterparty credit risk

we had significant commodity derivative net asset balances with the following counterparties:

	Percentage of
	future hedged
Counterparty	production
JP Morgan Chase Bank, N.A.	38	%
Societe Generale	17	%
Royal Bank of Canada	8	%
Macquarie Bank Limited	7	%
Wells Fargo	6	%
Bank of Nova Scotia	5	%
	81	%