(7) Price-Risk Management Activities

Derivatives are recorded on the balance sheet at fair value with changes in fair value recognized in earnings. The changes in the fair value of our derivatives are recognized in "Price-risk management and other, net" on the accompanying condensed consolidated statements of operations. We have a price-risk management policy to use derivative instruments to protect against declines in oil and natural gas prices, mainly through the purchase of commodity price swaps and collars as well as basis swaps.

During the three months ended March 31, 2017 (successor), the Company recorded gains of $10.9 million on its commodity derivatives. The Company made net cash payments of $0.8 million for settled derivative contracts during the three months ended March 31, 2017 (successor). During the three months ended March 31, 2016 (predecessor), there were no gains or losses as all outstanding hedge agreements had settled.

At March 31, 2017, we had $0.1 million in receivables for settled derivatives which were recognized on the accompanying condensed consolidated balance sheet in “Accounts receivable” and were subsequently collected in April 2017. At March 31, 2017, we also had $0.5 million in payables for settled derivatives which were recognized on the accompanying condensed consolidated balance sheet in "Accounts payable and accrued liabilities" and were subsequently paid in April 2017.

The fair values of our derivatives are computed using commonly accepted industry-standard models and are periodically verified against quotes from brokers. There was $0.9 million and $0.1 million in current and long-term unsettled derivative assets, respectively, as of March 31, 2017. There was $6.3 million and $0.3 million in current and long-term unsettled derivative liabilities, respectively, as of March 31, 2017.

The Company uses an International Swap and Derivatives Association master agreement for our derivative contracts. This is an industry standardized contract containing the general conditions of our derivative transactions including provisions relating to netting derivative settlement payments under certain circumstances (such as default). For reporting purposes, the Company has elected to not offset the asset and liability fair value amounts of its derivatives on the accompanying balance sheets. Under the right of set-off, there was $5.6 million in net fair value liability at March 31, 2017. For further discussion related to the fair value of the Company's derivatives, refer to Note 8 of these condensed consolidated financial statements.

The following tables summarize the weighted average prices as well as future production volumes for our unsettled derivative contracts in place as of March 31, 2017:



Oil Derivative Swaps (NYMEX WTI Settlements)	Total Volumes (Bbls)	Weighted Average Price
2018 Contracts
1Q18	17,000	$	50.25
2Q18	16,100	$	50.15
3Q18	15,100	$	50.20
4Q18	14,200	$	50.10

2017 Contracts
2Q17	97,401	$	48.13
3Q17	90,000	$	48.16
4Q17	84,798	$	48.18



Natural Gas Derivative Contracts (NYMEX Henry Hub Settlements)	Total Volumes (MMBtu)	Weighted Average Swap Price		Weighted Average Collar Floor Price		Weighted Average Collar Call Price
Swap Contracts
1Q19	875,000	$	3.10

1Q18	6,084,000	$	3.45
2Q18	2,776,000	$	2.83
3Q18	2,574,000	$	2.85
4Q18	2,388,000	$	2.93

2Q17	4,153,170	$	2.98
3Q17	6,014,999	$	3.01
4Q17	4,460,001	$	2.97

Collar Contracts
2Q17	1,600,000			$	3.050	$	3.545
3Q17	2,865,000			$	3.050	$	3.585
4Q17	3,102,000			$	3.100	$	3.715



Natural Gas Basis Derivative Swap (East Texas Houston Ship Channel vs NYMEX Settlements)	Total Volumes (MMBtu)	Weighted Average Price
2018 Contracts
1Q18	4,950,000	$	(0.12	)
2Q18	910,000	$	(0.11	)
3Q18	920,000	$	(0.11	)
4Q18	920,000	$	(0.11	)

2017 Contracts
2Q17	5,753,170	$	(0.04	)
3Q17	7,969,999	$	(0.02	)
4Q17	7,562,001	$	(0.04	)