Derivative Activities(Tables)

6 Months Ended

Jun. 30, 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	447,500 Mmbtu/day	$3.84–$4.48
2015	Collars	145,000 Mmbtu/day	$4.07–$4.56
2013	Swaps	296,685Mmbtu/day	$	3.79
2014	Swaps	30,000 Mmbtu/day	$	4.17
Crude Oil
2013	Collars	3,000 bbls/day	$90.60–$100.00
2014	Collars	2,000 bbls/day	$85.55–$100.00
2013	Swaps	6,325bbls/day	$	96.77
2014	Swaps	7,000 bbls/day	$	94.14
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	8,000 bbls/day	$	36.79
2014	Swaps	1,000 bbls/day	$	40.32

Derivative Fair Value Income

The following table presents information about the components of derivative fair value income for the three months and the six months ended June30, 2013 and 2012 (in thousands):

		Three MonthsEnded June 30,											Six Months Ended June 30,
		2013							2012				2013							2012
Change in fair value of derivatives that did not qualify or were not designated for hedge accounting (a)		$			159,371			$			135,777	$				62,569			$				83,721
Realized loss on settlement–natural gas (a)(b)					(24,543		)				—					(23,728		)					—
Realized gain (loss) on settlement–oil (a) (b)					(111		)				768					(213		)					(3,854		)
Realized gain on settlement–NGLs (a) (b)					3,043						10,152					2,148							5,760
Hedgeineffectiveness	–realized		(155			)				1,278					409							2,463
	–unrealized			155						594				(3,300			)				(354			)
Derivative fair value income		$			137,760			$			148,569	$				37,885			$				87,736

(a)Derivatives that did not qualify or were not designated for hedge accounting. Change in fair value of derivatives line also includes gains of$103.8 million in second quarter 2013 and gains of$22.4million in the first six months 2013 related to discontinuance of hedge accounting.

(b)These amounts represent the realized gains and losses on settled derivatives that did not qualify or were 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 did not qualify or were not designated for hedge accounting.

Schedule of Derivative Off setting Assets and Liabilities Table Text Block

		June30, 2013
		Gross Amounts of RecognizedAssets		GrossAmounts Offset in the Balance Sheet			Net Amounts of AssetsPresentedinthe Balance Sheet
Derivative assets:
Naturalgas	–swaps	$	14,255	$	(3,638	)		$	10,617
	–collars		88,087		(3,703	)			84,384
Crude oil	–swaps		15,980		—				15,980
	–collars		1,979		—				1,979
NGLs	–C5swaps		11,743		—				11,743
	–C3swaps		3,589		(773	)			2,816
		$	135,633	$	(8,114	)		$	127,519

		June 30, 2013
		Gross Amounts of Recognized(Liabilities)			Gross Amounts Offset in the Balance Sheet		Net Amounts of (Liabilities)Presentedinthe Balance Sheet
Derivative (liabilities):
Naturalgas	–swaps	$	(3,638	)	$	3,638		$	—
	–collars		(3,703	)		3,703			—
NGLs	–C3swaps		(773	)		773			—
		$	(8,114	)	$	8,114		$	—

		December31, 2012
		Gross Amounts of RecognizedAssets		GrossAmounts Offset in the Balance Sheet			Net Amounts of AssetsPresentedinthe Balance Sheet
Derivative assets:
Naturalgas	–swaps	$	10,746	$	(3,242	)		$	7,504
	–collars		128,410		(6,155	)			122,255
	–basis swaps		993		—				993
Crude oil	–swaps		9,650		—				9,650
	–collars		2,222		—				2,222
NGLs	–C5 swaps		13,055		(2,412	)			10,643
		$	165,076	$	(11,809	)		$	153,267

		December 31, 2012
		Gross Amounts of Recognized(Liabilities)			Gross Amounts Offset in the Balance Sheet				Net Amounts of (Liabilities)Presentedinthe Balance Sheet
Derivative (liabilities):
Natural gas	–swaps	$	(3,242	)		$	(221	)		$	(3,463	)
	–collars		(9,618	)			9,618				—
NGLs	–C5 swaps		(137	)			2,412				2,275
	–C3 swaps		(6,746	)			—				(6,746	)
		$	(19,743	)		$	11,809			$	(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):

	June30, 2013							December31, 2012
	Assets		(Liabilities)					Assets			(Liabilities)
	Carrying Value		Carrying Value			Net Carrying Value		Carrying Value			Carrying Value				Net Carrying Value
Derivatives that qualified for cash flow hedge accounting (before discontinuance of hedge accounting):
Swaps (a)	$	11,028	$	(5,952	)	$	5,076		$	22,236		$	(3,242	)		$	18,994
Collars (a)		64,047		(10,356	)		53,691			129,878			(9,721	)			120,157
	$	75,075	$	(16,308	)	$	58,767		$	152,114		$	(12,963	)		$	139,151
Derivatives that did not qualify or were not designated for hedge accounting:
Sold swaps (a)	$	36,505	$	(2,233	)	$	34,272		$	7,316		$	(8,904	)		$	(1,588	)
Re-purchased swaps (a)		1,808		—			1,808			5,920			—				5,920
Collars (a)		33,112		(440	)		32,672			857			—				857
Basis swaps (a)		—		—			—			993			—				993
	$	71,425	$	(2,673	)	$	68,752		$	15,086		$	(8,904	)		$	6,182

(a)Included in unrealized derivatives in theaccompanying consolidated balance sheets. See additional discussion above regarding the discontinuance of hedge accounting.

Effects of Cash Flow Hedges and Other Hedges on Accumulated Other Comprehensive Income

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

	ThreeMonthsEndedJune30,													SixMonthsEndedJune30,
	Change in Hedge DerivativeFairValue					Realized Gain (Loss) ReclassifiedfromOCI into Revenue (a)								Change in Hedge DerivativeFairValue									Realized Gain (Loss) ReclassifiedfromOCI into Revenue (a)
	2013		2012				2013				2012					2013				2012					2013				2012
Swaps	$	—	$	19,665		$		3,875		$		32,335			$		125		$		55,836			$		11,922		$		51,647
Put options		—		648				—				(315	)				—				(914	)				—				(315	)
Collars		—		(12,423	)			27,540				46,561					(7,015	)			84,048					58,272				84,878
Income taxes		—		(3,077	)			(12,252	)			(30,647	)				2,687				(55,183	)				(27,376	)			(52,834	)
	$	—	$	4,813		$		19,163		$		47,934			$		(4,203	)	$		83,787			$		42,818		$		83,376

(a)For realized gains upon derivative contract settlement, the reduction in AOCI is offset by an increase in revenues, NGLs and oil sales. For realized losses upon derivative contract settlement, the increase in AOCI is offset by a decrease in revenues. See additional discussion above regarding the discontinuance of hedge accounting.

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 June30,
	Gain (Loss) Recognized in Income(Non‑hedgeDerivatives)						Gain (Loss) Recognized in Income(IneffectivePortion)							DerivativeFairValue Income (Loss)
	2013			2012			2013			2012			2013					2012
Swaps	$	65,003		$	129,313			$	—		$	562			$	65,003			$	129,875
Re-purchased swaps		(1,663	)		(8,744	)			—			—				(1,663	)			(8,744	)
Collars		74,420			7,597				—			1,310				74,420				8,907
Call options		—			18,531				—			—				—				18,531
Total	$	137,760		$	146,697			$	—		$	1,872			$	137,760			$	148,569

	Six Months Ended June30,
	Gain (Loss) Recognized in Income(Non‑hedgeDerivatives)						Gain (Loss) Recognized in Income(IneffectivePortion)								DerivativeFairValue Income (Loss)
	2013			2012			2013				2012			2013					2012
Swaps	$	21,927		$	76,328			$	(1,995	)		$	666			$	19,932			$	76,994
Re-purchased swaps		(478	)		(8,744	)			—				—				(478	)			(8,744	)
Collars		19,417			5,095				(896	)			1,443				18,521				6,538
Call options		(90	)		12,948				—				—				(90	)			12,948
Total	$	40,776		$	85,627			$	(2,891	)		$	2,109			$	37,885			$	87,736