(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 "Net gain (loss) on commodity derivatives" 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 June 30, 2017 (successor), the six months ended June 30, 2017 (successor) and the period of April 23, 2016 through June 30, 2016 (successor), the Company recorded gains of $5.1 million and $16.1 million and losses of $9.9 million, respectively, on its commodity derivatives. The Company made net cash payments of $1.8 million and $2.6 million for settled derivative contracts during the three and six months ended June 30, 2017 (successor), respectively. During the period of January 1, 2016 through April 22, 2016 (predecessor), there were no gains or losses as there were no outstanding hedge agreements.

At June 30, 2017 and December 31, 2016, we had $0.3 million and $0.4 million, respectively, in receivables for settled derivatives which were recognized on the accompanying condensed consolidated balance sheet in “Accounts receivable” and were subsequently collected in July 2017 and January 2017, respectively. At June 30, 2017 and December 31, 2016, we also had $0.7 million and $1.8 million, respectively, 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 July 2017 and January 2017, respectively.

The fair values of our derivatives are computed using commonly accepted industry-standard models and are periodically verified against quotes from brokers. At June 30, 2017, there was $3.6 million and $0.8 million in current and long-term unsettled derivative assets and $2.5 million and $0.6 million in current and long-term unsettled derivative liabilities, respectively. At December 31, 2016, there was $0.5 million in current unsettled derivative assets and $15.8 million and $1.0 million in current and long-term unsettled derivative liabilities, respectively, while our long-term unsettled derivative assets were not material.

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 a $1.3 million net fair value asset at June 30, 2017 and a $16.4 million net fair value liability at December 31, 2016, respectively. 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 June 30, 2017:



Oil Derivative Swaps (NYMEX WTI Settlements)	Total Volumes (Bbls)	Weighted Average Price
2017 Contracts
3Q17	90,000	$	48.16
4Q17	84,798	$	48.18

2018 Contracts
1Q18	68,000	$	51.10
2Q18	64,400	$	50.98
3Q18	60,400	$	50.96
4Q18	56,800	$	50.84



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
2017 Swap Contracts
3Q17	3,882,666	$	3.00
4Q17	5,941,001	$	3.09

2017 Collar Contracts
3Q17	1,910,000			$	3.05	$	3.59
4Q17	3,102,000			$	3.10	$	3.72

2018 Swap Contracts
1Q18	7,445,000	$	3.46
2Q18	6,655,000	$	2.86
3Q18	6,074,000	$	2.88
4Q18	5,576,000	$	2.96

2019 Swap Contracts
1Q19	4,181,000	$	3.12



Natural Gas Basis Derivative Swap (East Texas Houston Ship Channel vs NYMEX Settlements)	Total Volumes (MMBtu)	Weighted Average Price
2017 Contracts
3Q17	5,792,666	$	(0.02	)
4Q17	7,562,001	$	(0.04	)

2018 Contracts
1Q18	5,400,000	$	(0.12	)
2Q18	3,610,000	$	(0.04	)
3Q18	3,020,000	$	(0.03	)
4Q18	1,670,000	$	(0.10	)

2019 Contracts
1Q19	750,000	$	(0.11	)