Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013:

June 30, 2014 (Thousands of dollars)	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Balance as of June 30, 2014
Assets
Commodity derivative contracts	$	—	$	—	$	95		$	95
Interest rate derivative contracts		—		—		42			42
Total assets	$	—	$	—	$	137		$	137
Liabilities
Commodity derivative contracts	$	—	$	—	$	(6,767	)	$	(6,767	)
Interest rate derivative contracts		—		—		(285	)		(285	)
Total liabilities	$	—	$	—	$	(7,052	)	$	(7,052	)

December 31, 2013 (Thousands of dollars)	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Balance as of December 31, 2013
Assets
Commodity derivative contracts	$	—	$	—	$	1,337		$	1,337
Interest rate derivative contracts		—		—		86			86
Total assets	$	—	$	—	$	1,423		$	1,423
Liabilities
Commodity derivative contracts	$	—	$	—	$	(2,010	)	$	(2,010	)
Interest rate derivative contracts		—		—		(278	)		(278	)
Total liabilities	$	—	$	—	$	(2,288	)	$	(2,288	)

Schedule of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3

The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the six months ended June 30, 2014.

(Thousands of dollars)
Net liabilities – December 31, 2013	$	(865	)
Total realized and unrealized gains / losses:
Included in earnings (a)		(8,854	)
Included in other comprehensive loss		(50	)
Purchases, sales, issuances and settlements		2,854
Net liabilities – June 30, 2014	$	(6,915	)

(a) Derivative instruments are reported in revenues as realized gain/loss and on a separately reported line item captioned unrealized gain/loss on derivative instruments, and interest rate swap instruments are reported as an increase or reduction to interest expense.

Effect of Derivative Instruments on Condensed Consolidated Balance Sheets

The following table sets forth the effect of derivative instruments on the condensed consolidated balance sheets at June 30, 2014 and December 31, 2013:

		Fair Value
(Thousands of dollars)	Balance Sheet Location	June 30, 2014			December 31, 2013
Asset Derivatives:
Derivatives designated as cash-flow hedging instruments:
Interest rate swap contracts	Other assets	$	42		$	86
Derivatives not designated as cash-flow hedging instruments:
Crude oil commodity contracts	Other current assets		—			307
Natural gas commodity contracts	Other current assets		45			50
Crude oil commodity contracts	Other assets		13			980
Natural gas commodity contracts	Other assets		37			—
Total		$	137		$	1,423
Liability Derivatives:
Derivatives designated as cash-flow hedging instruments:
Interest rate swap contracts	Derivative liability short-term	$	(268	)	$	(209	)
Interest rate swap contracts	Derivative liability long-term		(17	)		(69	)
Derivatives not designated as cash-flow hedging instruments:
Crude oil commodity contracts	Derivative liability short-term		(4,640	)		(1,667	)
Natural gas commodity contracts	Derivative liability short-term		(640	)		(318	)
Crude oil commodity contracts	Derivative liability long-term		(1,460	)		(25	)
Natural gas commodity contracts	Derivative liability long-term		(27	)		—
Total		$	(7,052	)	$	(2,288	)
Total derivative instruments		$	(6,915	)	$	(865	)

Effect of Derivative Instruments on Condensed Consolidated Statement of Operations

The following table sets forth the effect of derivative instruments on the condensed consolidated statement of operations for the six-month periods ended June 30, 2014 and 2013:

	Location of gain/loss recognized in income	Amount of gain/loss recognized in income
(Thousands of dollars)		2014			2013
Derivative designated as cash-flow hedge instruments:
Interest rate swap contracts	Interest expense	$	(132	)	$	—
Derivatives not designated as cash-flow hedge instruments
Natural gas commodity contracts	Unrealized loss on derivative instruments, net		(316	)		(437	)
Crude oil commodity contracts	Unrealized gain (loss) on derivative instruments, net		(5,683	)		2,834
Natural gas commodity contracts (a)	Realized gain (loss) on derivative instruments, net		(596	)		331
Crude oil commodity contracts	Realized loss on derivative instruments, net		(2,127	)		(257	)
		$	(8,854	)	$	2,471

(a) In January 2014, the Company unwound and monetized natural gas swaps with original settlement dates from January 2015 through December 2015 for net proceeds of $276,000. The $276,000 gain associated with this early settlement transaction is included in realized gain on derivative instruments for the six months ended June 30, 2014.