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 consolidated statements of operations. We have a price-risk management policy to use derivative instruments to protect against declines in oil, natural gas and NGL prices, mainly through the purchase of price swaps, collars and basis swaps.

For the year ended December 31, 2017 (successor) and the period of April 23, 2016 through December 31, 2016 (successor) we recognized a $17.9 million gain and a $19.7 million loss, respectively, relating to our derivative activities. For the year ended December 31, 2015 (predecessor) we recognized a $0.2 million gain. The Company made net cash payments of $1.4 million and $1.9 million for settled derivative contracts for the year ended December 31, 2017 (successor) and the period of April 23, 2016 through December 31, 2016 (successor). For the year ended December 31, 2015 (predecessor) we received net cash payments of $2.5 million for settled derivative contracts. There were no derivative instruments outstanding during the period of January 1, 2016 through April 22, 2016 (predecessor).

As of December 31, 2017 and 2016 we had $2.2 million and $0.4 million in receivables for settled derivatives which were recognized on the accompanying consolidated balance sheet in “Accounts receivable” and were subsequently collected in January 2018 and 2017, respectively. As of December 31, 2017 and 2016 we had $0.4 million and $1.8 million in payables for settled derivatives which were recognized on the accompanying consolidated balance sheet in "Accounts payable and accrued liabilities" and were subsequently paid in January 2018 and 2017, respectively.

The fair values of our derivatives are computed using commonly accepted industry-standard models and are periodically verified against quotes from brokers. As of December 31, 2017 and 2016 there was $5.1 million and $0.5 million in current unsettled derivative assets, while long-term unsettled derivative assets were $2.6 million and not material as of December 31, 2017 and 2016, which are included in other long-term assets. As of December 31, 2017 and 2016 there was $5.1 million and $15.8 million in current unsettled derivative liabilities and $2.8 million and $1.0 million in long-term unsettled derivative liabilities, which are included in other long-term liabilities.

The Company uses an International Swap and Derivatives Association "ISDA" master agreement for all 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 does 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 a $0.1 million and $16.4 million net fair value liability at December 31, 2017 and December 31, 2016, respectively. For further discussion related to the fair value of the Company's derivatives, refer to Note 10 of these consolidated financial statements.

The following tables summarizes the weighted average prices as well as future production volumes for our unsettled derivative contracts in place as of December 31, 2017.



Oil Derivative Swaps (NYMEX WTI Settlements)	Total Volumes (Bbls)	Weighted Average Price
2018 Contracts
1Q18	151,000	$	52.80
2Q18	140,400	$	52.57
3Q18	130,400	$	52.40
4Q18	122,800	$	52.23

2019 Contracts
1Q19	97,200	$	52.40
2Q19	92,700	$	52.32
3Q19	88,500	$	52.39
4Q19	84,500	$	52.30

2020 Contracts
1Q20	51,000	$	51.49
2Q20	49,250	$	51.46
3Q20	47,500	$	51.42
4Q20	46,500	$	51.40



Natural Gas Derivative Swaps (NYMEX Henry Hub Settlements)	Total Volumes (MMBtu)	Weighted Average Price

2018 Contracts
1Q18	5,238,000	$	3.42
2Q18	8,245,000	$	2.86
3Q18	8,014,000	$	2.88
4Q18	7,976,000	$	2.96

2019 Contracts
1Q19	6,016,000	$	3.07
2Q19	6,060,000	$	2.83
3Q19	5,550,000	$	2.84
4Q19	5,966,000	$	2.84

2020 Contracts
1Q20	5,370,000	$	2.83
2Q20	1,170,000	$	2.86
3Q20	1,170,000	$	2.86
4Q20	1,170,000	$	2.86



NGL Derivative Swaps (OPIS Settlements)	Total Volumes (Bbls)	Weighted Average Price
2018 Contracts
1Q18	126,000	$	24.78
2Q18	118,200	$	24.78
3Q18	112,200	$	24.78
4Q18	148,200	$	24.78



Natural Gas Basis Derivative Swaps (East Texas Houston Ship Channel Settlements)	Total Volumes (MMBtu)	Weighted Average Price
2018 Contracts
1Q18	5,105,000	$	(0.11	)
2Q18	6,795,000	$	(0.04	)
3Q18	3,020,000	$	(0.03	)
4Q18	2,730,000	$	(0.09	)

2019 Contracts
1Q19	750,000	$	(0.11	)



Oil Basis Derivative Swaps (NYMEX WTI and Argus Settlements)	Total Volumes (Bbls)	Weighted Average Price
2018 Contracts
1Q18	20,000	$	4.06
2Q18	30,000	$	4.06
3Q18	30,000	$	4.06
4Q18	30,000	$	4.06