Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

(8) Fair Value Measurements

     FASB ASC 820-10 defines fair value, establishes guidelines for measuring fair value and expands disclosure about fair value measurements. It does not create or modify any current GAAP requirements to apply fair value accounting. However, it provides a single definition for fair value that is to be applied consistently for all prior accounting pronouncements. The adoption of this guidance did not have a material impact on our financial position or results of operations.

     Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, bank borrowings, and senior notes. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the highly liquid or short-term nature of these instruments. The fair value of the bank borrowings approximate the carrying amounts as of September 30, 2011 and December 31, 2010, and was determined based upon variable interest rates currently available to us for borrowings with similar terms. Based upon quoted market prices as of September 30, 2011 and December 31, 2010, the fair value of our senior notes due 2017, was $245.0 million, or 98% of face value, and $254.7 million, or 101.9% of face value, respectively. Based upon quoted market prices as of September 30, 2011 and December 31, 2010, the fair value of our senior notes due 2020, which were issued in November 2009, were $237.4 million, or 106% of face value and $242.3 million, or 107.7% of face value, respectively. The carrying value of our senior notes due 2017 was $250.0 million at September 30, 2011 and December 31, 2010, while the carrying value of our senior notes due 2020 was $221.8 million and $221.6 million at September 30, 2011 and December 31, 2010, respectively.

     The following table presents our assets that are measured at fair value as of September 30, 2011 and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value (in millions):

	Fair Value Measurements at September 30, 2011
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Assets	Total		(Level 1)		(Level 2)		(Level 3)
Money Market Funds	$	0.1	$	0.1	$	—	$	—
Natural Gas Derivatives	$	—	$	—	$	—	$	—
Oil Derivatives	$	—	$	—	$	—	$	—

     Level 1 — Uses quoted prices in active markets for identical, unrestricted assets or liabilities. Instruments in this category include money market funds as they have comparable fair values for identical assets.

     Level 2 — Uses quoted prices for similar assets or liabilities in active markets or observable inputs for assets or liabilities in non-active markets. Instruments in this category include our commodity derivatives that we value using commonly accepted industry-standard models (such as Black-Scholes) which contain inputs such as contract prices, risk-free rates, volatility measurements and other observable market data that are obtained from independent third-party sources.

     Level 3 — Uses unobservable inputs for assets or liabilities that are in non-active markets. We do not have any assets or liabilities in this category that are not supported by market activity and have significant unobservable inputs.