DERIVATIVE ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Volumes Hedged and Average Hedge Prices

Period	Contract Type	Volume Hedged	Weighted Average Hedge Price
Natural Gas
2013	Collars	280,000 Mmbtu/day	$4.59–$ 5.05
2014	Collars	402,500 Mmbtu/day	$3.81–$ 4.47
2015	Collars	95,000 Mmbtu/day	$4.06–$ 4.48
2013	Swaps	256,127 Mmbtu/day	$3.67
2014	Swaps	20,000 Mmbtu/day	$4.08
Crude Oil
2013	Collars	3,000 bbls/day	$90.60–$ 100.00
2014	Collars	2,000 bbls/day	$85.55–$ 100.00
2013	Swaps	5,829 bbls/day	$96.73
2014	Swaps	6,000 bbls/day	$94.54
2015	Swaps	2,000 bbls day	$90.20
NGLs (Natural Gasoline)
2013	Sold Swaps	8,000 bbls/day	$89.64
2013	Re-purchased Swaps	1,500 bbls/day	$76.30
NGLs (Propane)
2013	Swaps	7,000 bbls/day	$ 36.38
2014	Swaps	1,000 bbls/day	$40.32

Derivative Fair Value (Loss) Income

The following table presents information about the components of derivative fair value loss for the three months ended March31, 2013 and 2012 (in thousands):

	Three Months Ended March31,
	2013	2012
Change in fair value of derivatives that do not qualify or are not designated for hedge accounting (a)	$  (96,802)	$(52,056)
Realized gain on settlement–natural gas (a)(b)	815	—
Realized loss on settlement–oil (a) (b)	(102)	(4,622)
Realized loss on settlement–NGLs (a) (b)	(895)	(4,392)
Hedge ineffectiveness–realized	564	1,185
–unrealized	(3,455)	(948)
Derivative fair value loss	$  (99,875)	$(60,833)

(a)Derivatives that do not qualify or are not designated for hedge accounting.

(b)These amounts represent the realized gains and losses on settled derivatives that do not qualify or are not designated for hedge accounting, which before settlement are included in the category in this same table referred to as change in fair value of derivatives that do not qualify or are not designated for hedge accounting.

Combined Fair Value of Derivatives, by Consolidated Balance Sheets

	March31, 2013	December31, 2012
Derivative assets:
Natural gas–swaps	$(12,701)	$     7,504
–collars	33,552	122,255
–basis swaps	—	993
Crude oil–swaps	1,769	9,650
–collars	(59)	2,222
NGLs–C5 swaps	4,844	10,643
–C3 swaps	34	—
	$  27,439	$ 153,267
Derivative (liabilities):
Natural gas–swaps	$ (19,918)	$—
–collars	(6,206)	(3,463)
Crude oil – swaps	2,929	—
NGLs–C5 swaps	3,467	2,275
–C3 swaps	(8,204)	(6,746)
	$ (28,032)	$   (7,934)

Fair Value of Derivative Contracts by Consolidated Balance Sheets

The table below provides data about the fair value of our derivative contracts. Derivative assets and liabilities shown below are presented as gross assets and liabilities, without regard to master netting arrangements, which are considered in the presentation of derivative assets and liabilities in the accompanying consolidated balance sheets (in thousands).

	March31, 2013			December31, 2012
	Assets	(Liabilities)			Assets	(Liabilities)
	Carrying Value	Carrying Value	Net Carrying Value		Carrying Value	Carrying Value	Net Carrying Value
Derivatives that qualify for cash flow hedge accounting :
Swaps (a)	$15,431	$(6,640)	$8,791		$22,236	$(3,242)	$18,994
Collars (a)	91,591	(10,356)	81,235		129,878	(9,721)	120,157
	$107,022	$(16,996)	$90,026		$152,114	$(12,963)	$139,151
Derivatives that do not qualify for hedge accounting :
Sold swaps (a)	$6,702	$(48,132)	$(41,430)		$7,316	$(8,904)	$(1,588)
Re-purchased swaps (a)	4,759	—	4,759		5,920	—	5,920
Collars (a)	162	(54,110)	(53,948)		857	—	857
Basis swaps (a)	—	—	—		993	—	993
	$11,623	$(102,242)	$(90,619)		$15,086	$(8,904)	$6,182

(a)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

The effects of our cash flow hedges (or those derivatives that qualify for hedge accounting) on accumulated other comprehensive income in the accompanying consolidated balance sheets is summarized below (in thousands):

	Three Months Ended March31,
	Change in Hedge DerivativeFairValue		RealizedGain(Loss) ReclassifiedfromOCI into Revenue (a)
	2013	2012		2013	2012
Swaps	$(2,154)	$36,172		$5,768	$19,313
Put options	—	(1,562)		—	—
Collars	(7,015)	96,471		30,732	38,316
Income taxes	3,576	(52,107)		(14,235)	(22,187)
	$(5,593)	$78,974		$22,265	$35,442

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

losses upon derivative contract settlement, the increase in AOCI is offset by a decrease in natural gas, NGLs and oil sales.

Effects of Non-Hedge Derivatives on Consolidated Statements of Operations

The effects of our non-hedge derivatives (or those derivatives that do not qualify for hedge accounting) and the ineffective portion of our hedge derivatives on our consolidated statements of operations is summarized below (in thousands):

	Three Months Ended March31,
	Gain (Loss) Recognized in Income (Non-hedge Derivatives)		Gain (Loss) Recognized in Income (Ineffective Portion)		Derivative Fair Value Income (Loss)
	2013	2012	2013	2012	2013	2012
Swaps	$  (43,076)	$(52,985)	$(1,995)	$159	$(45,071)	$(52,826)
Re-purchased swaps	1,185	—	—	—	1,185	—
Collars	(55,003)	(2,502)	(896)	78	(55,899)	(2,424)
Call options	(90)	(5,583)	—	—	(90)	(5,583)
Total	$  (96,984)	$(61,070)	$(2,891)	$237	$(99,875)	$(60,833)

Schedule Of Derivative Off setting Assets and Liabilities Table Text Block

The tables below provide additional information related to our master netting arrangements with our derivative counterparties (in thousands):

	March31, 2013
	Gross Amounts of RecognizedAssets	Gross Amounts Offset in the Balance Sheet	Net Amounts of AssetsPresentedinthe Balance Sheet
Derivative assets:
Natural gas – swaps	$—	$(12,701)	$(12,701)
– collars	42,866	(9,314)	33,552
Crude oil   –swaps	2,360	(591)	1,769
– collars	444	(503)	(59)
NGLs        – C5 swaps	5,084	(240)	4,844
– C3 swaps	34	—	34
	$50,788	$(23,349)	$27,439
	Gross Amounts of Recognized(Liabilities)	Gross Amounts Offset in the Balance Sheet	Net Amounts of (Liabilities)Presentedinthe Balance Sheet
Derivative (liabilities):
Natural gas –swaps	$(19,918)	$—	$(19,918)
– collars	(16,475)	10,269	(6,206)
Crude oil – swaps	(690)	3,520	2,830
NGLs– C5 swaps	(877)	4,343	3,466
– C3 swaps	(8,204)	—	(8,204)
	$(46,164)	$18,132	$(28,032)

	December 31, 2012
	Gross Amounts of RecognizedAssets	Gross Amounts Offset in the Balance Sheet	Net Amounts of AssetsPresentedinthe Balance Sheet
Derivative assets:
Natural gas – swaps	$10,746	$(3,242)	$7,504
– collars	127,991	(5,736)	122,255
– basis swaps	993	—	993
Crude oil– swaps	9,650	—	9,650
– collars	2,222	—	2,222
NGLs   – C5 swaps	10,674	(31)	10,643
	$162,276	$(9,009)	$153,267
	Gross Amounts of Recognized(Liabilities)	Gross Amounts Offset in the Balance Sheet	Net Amounts of (Liabilities)Presentedinthe Balance Sheet
Derivative (liabilities):
Natural gas – collars	$(3,883)	$420	$(3,463)
NGLs       – C5 swaps	(106)	2,381	2,275
– C3 swaps	(6,746)	—	(6,746)
	$(10,735)	$2,801	$(7,934)