Derivative Activities (Tables)

6 Months Ended

Jun. 30, 2011

Derivative volumes hedged and average hedge prices


			Average
Period	Contract Type	Volume Hedged	Hedge Price
Natural Gas
2012	Swaps	70,192 Mmbtu/day	$	5.00
2011	Collars	333,200 Mmbtu/day	$	5.38-$6.23
2012	Collars	189,641 Mmbtu/day	$	5.32-$5.91
2013	Collars	160,000 Mmbtu/day	$	5.09-$5.65

Crude Oil
2012	Collars	2,000 bbls/day	$	70.00-$80.00
2011	Call options	5,500 bbls/day	$	80.00
2012	Call options	4,700 bbls/day	$	85.00

NGLs (Natural gasoline)
2011	Swaps	7,000 bbls/day	$	104.17
2012	Swaps	5,000 bbls/day	$	102.59

Derivative Fair Value Income


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Hedge ineffectiveness — realized	$	1,576		$	5		$	2,522		$	(352	)
— unrealized		5,934			260			6,502			11
Change in fair value of derivatives that do not qualify for hedge accounting^(a)		48,139			(4,409	)		8,103			42,169
Realized gain on settlements — gas^{(a) (b)}		3,484			10,690			3,090			7,051
Realized loss on settlements — oil^{(a) (b)}		(6,094	)		—			(8,012	)		—

Derivative fair value income	$	53,039		$	6,546		$	12,205		$	48,879


^(a)		Derivatives that do not qualify for hedge accounting.

^(b)		These amounts represent the realized gains or losses on settled derivatives that do not qualify for hedge accounting, which before settlement are included in the category described above called change in fair value of derivatives that do not qualify for hedge accounting.

Combined fair value of derivatives, by Consolidated balance sheet


	June 30,			December 31,
	2011			2010
Derivative assets:
Natural gas — collars	$	107,258		$	155,159
— collars — discontinued operations		—			8,195
— swaps		4,014			—
Crude oil — collars		(15,830	)		—
— call options		(43,675	)		(31,904	)
NGL — swaps		13,750			—

	$	65,517		$	131,450


Derivative liabilities:
Natural gas — collars	$	3,079		$	27,032
— basis swaps		—			(352	)
— swaps		169			—
Crude oil — collars		—			(12,051	)
— call options		(7,675	)		(28,393	)
NGL — swaps		—			—

	$	(4,427	)	$	(13,764	)

Derivative Gross Assets and Gross Liabilities


	June 30, 2011								December 31, 2010
	Assets		(Liabilities)						Assets		(Liabilities)
						Net								Net
	Carrying		Carrying			Carrying			Carrying		Carrying			Carrying
	Value		Value			Value			Value		Value			Value
Derivatives that qualify for cash flow hedge accounting:
Swaps ⁽¹⁾	$	4,184	$	—		$	4,184		$	—	$	—		$	—
Collars⁽¹⁾		103,907		—			103,907			164,933		—			164,933
Collars ⁽¹⁾ — discontinued operations		—		—			—			8,195		—			8,195

	$	108,091	$	—		$	108,091		$	173,128	$	—		$	173,128


Derivatives that do not qualify for hedge accounting:
Swaps ⁽¹⁾	$	13,750	$	—		$	13,750		$	—	$	—		$	—
Collars⁽¹⁾		6,430		(15,830	)		(9,400	)		17,259		(12,052	)		5,207
Call options⁽¹⁾		—		(51,351	)		(51,351	)		—		(60,297	)		(60,297	)
Basis swaps⁽¹⁾		—		—			—			—		(352	)		(352	)

	$	20,180	$	(67,181	)	$	(47,001	)	$	17,259	$	(72,701	)	$	(55,442	)


⁽¹⁾		Included in unrealized derivative gain or loss in the accompanying consolidated balance sheets.

Effects of cash flow hedges and other hedges on accumulated other comprehensive income (loss)


	Three Months Ended June 30,												Six Months Ended June 30,
							Realized Gain (Loss)												Realized Gain (Loss)
	Change in Hedge						Reclassified from OCI						Change in Hedge						Reclassified from OCI
	Derivative Fair Value						into Revenue ^(a)						Derivative Fair Value						into Revenue ^(a)
	2011			2010			2011			2010			2011			2010			2011			2010
Swaps	$	4,655		$	—		$	—		$	—		$	2,115		$	—		$	—		$	—
Collars		23,223			(6,887	)		24,285			18,340			22,424			77,930			53,902			19,555
Collars — discontinued operations		—			19			—			—			412			13			8,607			—
Income taxes		(10,454	)		2,611			(9,107	)		(6,969	)		(7,414	)		(29,618	)		(23,441	)		(7,431	)

	$	17,424		$	(4,257	)	$	15,178		$	11,371		$	17,537		$	48,325		$	39,068		$	12,124


^(a)		For realized gains upon contract settlement, the reduction in AOCI is offset by an increase in natural gas, NGL and oil sales. For realized losses upon contract settlement, the increase in AOCI is offset by a decrease in natural gas, NGL and oil sales.

Effects of non-hedge derivatives on consolidated statement of operations


	Three Months Ended June 30,
	Gain (Loss) Recognized in				Gain Recognized in Income				Derivative Fair Value
	Income (Non-hedge Derivatives)				(Ineffective Portion)				(Loss) Income
	2011		2010		2011		2010		2011		2010
Swaps	$	15,613	$	—	$	—	$	—	$	15,613	$	—
Collars		6,452		1,483		7,510		265		13,962		1,748
Call options		23,464		—		—		—		23,464		—
Basis swaps		—		4,798		—		—		—		4,798

Total	$	45,529	$	6,281	$	7,510	$	265	$	53,039	$	6,546


	Six Months Ended June 30,
	Gain (Loss) Recognized in					Gain Recognized in Income					Derivative Fair Value
	Income (Non-hedge Derivatives)					(Ineffective Portion)					(Loss) Income
	2011			2010		2011		2010			2011			2010
Swaps	$	13,750		$	—	$	—	$	—		$	13,750		$	—
Collars		(1,135	)		48,438		9,024		(341	)		7,889			48,097
Call options		(9,391	)		—		—		—			(9,391	)		—
Basis swaps		(43	)		782		—		—			(43	)		782

Total	$	3,181		$	49,220	$	9,024	$	(341	)	$	12,205		$	48,879

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

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