We use commodity-based derivative contracts to manage exposure to commodity price fluctuations. We do not enter into these arrangements for speculative or trading purposes. We do not utilize complex derivatives as we typically utilize commodity swap, calls, swaptions or collar contracts to (1) reduce the effect of price volatility of the commodities we produce and sell and (2) support our annual capital budget and expenditure plans. Every derivative instrument is required to be recorded on our consolidated balance sheets as either an asset or a liability measured at its fair value. Their fair value, which is represented by the estimated amount that would be realized upon termination, based on a comparison of the contract price and a reference price (generally NYMEX for natural gas and crude oil or Mont Belvieu for NGLs), approximated a net derivative asset of $126.7 million at December 31, 2019. These contracts expire monthly through December 2021. The following table sets forth the derivative volumes by year as of December 31, 2019, excluding our basis and freight swaps which are discussed separately below:

Period	Contract Type	Volume Hedged	Weighted Average Hedge Price
Natural Gas
2020	Swaps	1,000,984 Mmbtu/day	$ 2.64 ⁽¹⁾
2021	Swaps	50,000 Mmbtu/day	$ 2.62 ⁽¹⁾

Crude Oil
2020	Swaps	7,995 bbls/day	$ 58.27 ⁽¹⁾
2021	Swaps	1,000 bbls/day	$ 55.00 ⁽¹⁾
April-September, 2020	Calls	500 bbls/day	$ 59.00

NGLs (NC4-Normal Butane)
January-March, 2020	Swaps	659 bbls/day	$ 0.73/gallon

NGLs (C5-Natural Gasoline)
January-March, 2020	Swaps	4,297 bbls/day	$ 1.21/gallon

⁽¹⁾ We also sold natural gas call swaptions of 140,000 Mmbtu/day for March-December 2020 at a weighted average price of $2.53 and 100,000 Mmbtu per day for 2021 at a weighted average price of $2.69. In addition, we sold call swaptions of 3,000 bbls per day for 2021 at a weighted average price of $56.50.

In addition to the swaps, collars and swaptions above, at December 31, 2019, we had natural gas basis swap contracts which lock in the differential between NYMEX and certain of our physical pricing points in Appalachia. These contracts settle monthly through December 2021 and include a total volume of 114,882,500 Mmbtu. The fair value of these contracts was a net derivative asset of $9.4 million on December 31, 2019.

At December 31, 2019, we also had propane spread swap contracts which lock in the differential between Mont Belvieu and international propane indexes. The contracts settle monthly in 2020. The fair value of these contracts was a net derivative liability of $14.1 million on December 31, 2019.

In connection with our international propane sales, we utilize propane swaps. To further hedge our propane price, at December 31, 2019, we had freight swap contracts which lock in the freight rate for a specific trade route on the Baltic Exchange. These contracts settle monthly and cover 4,000 metric tons per month in first quarter 2020, increasing to 14,000 metric tons per month for the remainder of 2020 and 10,000 metric tons per month in 2021 with a fair value net derivative asset of $1.5 million on December 31, 2019.

The combined fair value of derivatives included in the accompanying consolidated balance sheets as of December 31, 2019 and 2018 is summarized below (in thousands). As of December 31, 2019, we are conducting derivative activities with twenty counterparties, of which all but three are secured lenders in our bank credit facility. We believe all of these counterparties are acceptable credit risks. At times, such risks may be concentrated with certain counterparties. The credit worthiness of our counterparties is subject to periodic review. The assets and liabilities are netted where derivatives with both gain and loss positions are held by a single counterparty and we have master netting arrangements.

		December 31, 2019
		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets Presented in the Balance Sheet
Derivative assets:
Natural gas	–swaps	$	134,364	$	(2,913	)	$	131,451
	–swaptions		—		(1,325	)		(1,325	)
	–basis swaps		10,766		(1,092	)		9,674
Crude oil	–swaps		3,893		(4,794	)		(901	)
	–swaptions		—		(1,597	)		(1,597	)
	–calls		—		(349	)		(349	)
NGLs	–C3 propane spread swaps		1,913		(1,913	)		—
	–NC4 butane swaps		167		—			167
	–C5 natural gasoline swaps		60		(127	)		(67	)
Freight	–swaps		1,529		(1,028	)		501
		$	152,692	$	(15,138	)	$	137,554

		December 31, 2019
		Gross Amounts of Recognized (Liabilities)			Gross Amounts Offset in the Balance Sheet		Net Amounts of (Liabilities) Presented in the Balance Sheet
Derivative (liabilities):
Natural gas	–swaps	$	(1,657	)	$	2,913	$	1,256
	–swaptions		(2,594	)		1,325		(1,269	)
	–basis swaps		(1,371	)		1,092		(279	)
Crude oil	–swaps		(4,814	)		4,794		(20	)
	–swaptions		(2,254	)		1,597		(657	)
	–calls		(349	)		349		—
NGLs	–C3 propane spread swaps		(16,040	)		1,913		(14,127	)
	–C5 natural gasoline swaps		(127	)		127		—
Freight	–swaps		—			1,028		1,028
		$	(29,206	)	$	15,138	$	(14,068	)

		December 31, 2018
		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets Presented in the Balance Sheet
Derivative assets:
Natural gas	–swaps	$	20,834	$	(11,748	)	$	9,086
	–swaptions		5,200		(3,883	)		1,317
	–basis swaps		6,468		(2,822	)		3,646
Crude oil	–swaps		26,481		(651	)		25,830
	–collars		5,945		(707	)		5,238
NGLs	–C3 propane swaps		18,719		(589	)		18,130
	–C3 propane collars		8,538		—			8,538
	–C3 propane spread swaps		8,984		(8,868	)		116
	–NC4 butane swaps		4,084		—			4,084
	–C5 natural gasoline swaps		17,371		—			17,371
Freight	–swaps		—		(561	)		(561	)
		$	122,624	$	(29,829	)	$	92,795

		December 31, 2018
		Gross Amounts of Recognized (Liabilities)			Gross Amounts Offset in the Balance Sheet		Net Amounts of (Liabilities) Presented in the Balance Sheet
Derivative (liabilities):
Natural gas	–swaps	$	(18,332	)	$	11,748	$	(6,584	)
	–swaptions		(7,972	)		3,883		(4,089	)
	–basis swaps		(1,702	)		2,822		1,120
Crude oil	–swaps		—			651		651
	–collars		—			707		707
NGLs	–C3 propane swaps		—			589		589
	–C3 propane spread swaps		(8,868	)		8,868		—
Freight	–swaps		(561	)		561		—
		$	(37,435	)	$	29,829	$	(7,606	)

The effects of our derivatives on our consolidated statements of operations for the last three years are summarized below (in thousands).

	Year Ended December 31,
	Derivative Fair Value (Loss) Income
	2019			2018			2017
Commodity swaps	$	219,968		$	(57,950	)	$	181,095
Swaptions		333			(6,556	)		6,534
Collars		(3,903	)		17,583			18,132
Basis swaps		6,661			(1,104	)		(4,647	)
Puts		—			—			10,929
Calls		(349	)		(2,653	)		987
Freight swaps		3,971			(512	)		320
Total	$	226,681		$	(51,192	)	$	213,350