Fair Value Measurements

9 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

6. Fair Value Measurements

Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy:

● Level 1 - quoted prices for identical assets or liabilities in active markets.

● Level 2 - quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means.

● Level 3 - unobservable inputs for the asset or liability.

The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety.

The following table summarizes the valuation of the Company’s financial assets and liabilities at March 31, 2015 and June 30, 2014:

	Fair Value Measurements at Reporting Date Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant or Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Fair Value at March 31, 2015
Assets:
Commodity derivatives	$	—	$	292		$	—		$	292
Total	$	—	$	292		$	—		$	292
Liabilities:
Asset retirement obligations (non-recurring)	$	—	$	—		$	(5,834	)	$	(5,834	)
Commodity derivatives		—		(186	)		—			(186	)
Environmental remediation liability		—		—			(2,057	)		(2,057	)
Total	$	—	$	(186	)	$	(7,891	)	$	(8,077	)

	Fair Value Measurements at Reporting Date Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant or Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Fair Value at June 30, 2014
Assets:
Commodity derivatives	$	—	$	37		$	—		$	37
Oil and gas properties impairment (nonrecurring)		—		—			(487	)		(487	)
Total	$	—	$	37		$	(487	)	$	(450	)
Liabilities:
Asset retirement obligations (non-recurring)	$	—	$	—		$	(5,745	)	$	(5,745	)
Commodity derivative		—		(121	)		—			(121	)
Environmental remediation liability		—		—			(2,067	)		(2,067	)
Total	$	—	$	(121	)	$	(7,812	)	$	(7,933	)

The following is a summary of changes to fair value measurements using Level 3 inputs during the period ending March 31, 2015:

(in thousands)	Environmental Liability
Balance, June 30, 2014	$	(2,067	)
Acquisitions		—
Settlement of liabilities		10
Balance, March 31, 2015	$	(2,057	)