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Derivative Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of Outstanding Oil and Gas Derivative Contracts and Weighted Average Oil and Gas Prices
As of December 31, 2019, the Company had the following outstanding oil derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.
Three-way collars
 
Year Ending December 31, 2020
 
 
WTI Midland
 
WTI MEH
 
WTI Brent
Volume (MBbls)
 
7,800

 
15,900

 
3,450

Short call price (per Bbl)
 
$
66.92

 
$
73.24

 
$
73.48

Long put price (per Bbl)
 
$
56.00

 
$
58.55

 
$
62.26

Short put price (per Bbl)
 
$
46.00

 
$
48.55

 
$
52.26

 
 
 
 
 
 
 
Oil swaps
 
 
 
Year Ending December 31, 2020
 
 
 
 
Volume (MBbls)
 
Fixed Price Swap (per Bbl)
Oil swap - Midland
 
 
 
600

 
$
55.20

Oil swap - Houston
 
 
 
780

 
$
56.30

 
 
 
 
 
 
 
Basis swaps
 
 
 
Year Ending December 31, 2020
 
 
 
 
Volume (MBbls)
 
Fixed Price Swap (per Bbl)
Basis swap - Midland-Cushing index(1)
 


 
900

 
$
0.25

 
 
 
(1)
Represents swaps that fix the basis differentials between the index prices at which the Company sells its oil and the Cushing WTI price.

The following table sets forth the volumes associated with the Company’s outstanding natural gas derivative contracts expiring during the periods indicated and the weighted average natural gas prices for those contracts:
 
 
Year Ending December 31, 2020
 
 
Volume (MMbtu)
 
Fixed Price Swap (per MMbtu)
Basis swap - Waha(1)
 
17,640,000

 
$
0.88


 
 
 
(1)
Represents swaps that fix the basis differentials between the index prices at which the Company sells its natural gas produced in the Permian Basin and NYMEX Henry Hub price.
Derivative Instruments, Gain (Loss) The table below summarizes the Company’s gains (losses) on derivative instruments for the years ended December 31, 2019, 2018 and 2017 (in thousands):
 
Year Ending December 31,
 
2019
 
2018
 
2017
Changes in fair value of derivative instruments
$
(75,728
)
 
$
113,824

 
(44,702
)
Net derivative settlements
(12,206
)
 
8,084

 
15,670

Net premiums on options that settled during the period(1)
(43,278
)
 
(71,566
)
 
(37,103
)
(Loss) gain on derivatives
$
(131,212
)
 
$
50,342

 
$
(66,135
)
 
 
 
(1)
The net premiums on options that settled during the period represents the cumulative cost of premiums paid and received on positions purchased and sold, which expired during the current period. These amounts are included in (Loss) gain on derivatives on the Company’s consolidated statements of operations.
Schedule of Netting Offsets of Derivative Asset and Liability Positions
The following table presents the Company’s net exposure from its offsetting derivative asset and liability positions, as well as option premiums payable and receivable as of the reporting dates indicated (in thousands):
 
 
Gross Amount
 
Netting
Adjustments
 
Net
Exposure
December 31, 2019
 
 
 
 
 
 
Derivative assets with right of offset or
   master netting agreements
 
$
136,627

 
$
(8,995
)
 
$
127,632

Derivative liabilities with right of offset or
   master netting agreements
 
(167,517
)
 
8,995

 
(158,522
)
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
Derivative assets with right of offset or
   master netting agreements
 
$
236,431

 
$
(25,010
)
 
$
211,421

Derivative liabilities with right of offset or
   master netting agreements
 
(193,973
)
 
25,010

 
(168,963
)