Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Unsettled Derivative Instruments

As of September 30, 2011, we had entered into the following crude oil derivative instruments:  

					Swaps		Collars
Period	Type of Contract	Index	Bbls Per Day		Weighted Average Fixed Price		Weighted Average Short Put Price		Weighted Average Floor Price		Weighted Average Ceiling Price
Instruments Entered Into as of September 30, 2011
2011	Swaps	NYMEX WTI (1)		5,000	$	85.52	$	-	$	-	$	-
2011	Two-Way Collars	NYMEX WTI		13,000		-		-		80.15		94.63
2011	Three-Way Collars	NYMEX WTI		12,000		-		58.33		78.33		100.71
2012	Swaps	NYMEX WTI		5,000		91.84		-		-		-
2012	Swaps	Dated Brent		8,000		89.06		-		-		-
2012	Three-Way Collars	NYMEX WTI		23,000		-		61.09		83.04		101.66
2012	Three-Way Collars	Dated Brent		3,000		-		70.00		95.83		105.00
2013	Swaps	Dated Brent		3,000		98.03		-		-		-
2013	Three-Way Collars	NYMEX WTI		5,000		-		65.00		85.00		113.63
2013	Three-Way Collars	Dated Brent		5,000		-		80.00		99.71		127.32
Instruments Entered Into During October 1-15, 2011
2013	Three-Way Collars	Dated Brent		5,000		-		90.00		102.00		128.15

(1) West Texas Intermediate

As of September 30, 2011, we had entered into the following natural gas derivative instruments:

					Swaps		Collars
Period	Type of Contract	Index	MMBtu Per Day		Weighted Average Fixed Price		Weighted Average Short Put Price		Weighted Average Floor Price		Weighted Average Ceiling Price
Instruments Entered Into as of September 30, 2011
2011	Swaps	NYMEX HH (1)		25,000	$	6.41	$	-	$	-	$	-
2011	Two-Way Collars	NYMEX HH		140,000		-		-		5.95		6.82
2011	Three-Way Collars	NYMEX HH		50,000		-		4.00		5.00		6.70
2012	Swaps	NYMEX HH		30,000		5.10		-		-		-
2012	Three-Way Collars	NYMEX HH		110,000		-		4.44		5.25		6.66
2013	Swaps	NYMEX HH		30,000		5.25		-		-		-
2013	Three-Way Collars	NYMEX HH		50,000		-		4.00		5.25		5.59

(1) Henry Hub

As of September 30, 2011, we had entered into the following natural gas basis swaps:

Period	Index	Index Less Differential	MMBtu Per Day	Weighted Average Differential
2011	IFERC CIG (1)	NYMEX HH	140,000	$	(0.70)
2012	IFERC CIG	NYMEX HH	150,000		(0.52)

(1) Colorado Interstate Gas – Northern System

Fair Value of Derivative Instruments

The fair values of derivative instruments in our consolidated balance sheets were as follows:

Fair Value of Derivative Instruments

	Asset Derivative Instruments						Liability Derivative Instruments
	September 30,			December 31,			September 30,			December 31,
	2011			2010			2011			2010
	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
(millions)
	Current Assets	$	87	Current Assets	$	62	Current Liabilities	$	6	Current Liabilities	$	24
Commodity Derivative Instruments (Not Designated as Hedging Instruments)	Noncurrent Assets		44	Noncurrent Assets		-	Noncurrent Liabilities		-	Noncurrent Liabilities		51
Interest Rate Derivative Instruments (Designated as Hedging Instruments)	Current Assets		-	Current Assets		-	Current Liabilities		-	Current Liabilities		63
Total		$	131		$	62		$	6		$	138

Effect of derivative instruments on consolidated statement of operations

The effect of derivative instruments on our consolidated statements of operations was as follows:

Commodity Derivative Instruments Not Designated as Hedging Instruments

Amount of Gain on Derivative Instruments Recognized in Income

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
(millions)
Realized Mark-to-Market Gain	$	(22	)	$	(33	)	$	(39	)	$	(65	)
Unrealized Mark-to-Market Gain		(300	)		(5	)		(140	)		(215	)
Total Gain on Commodity Derivative Instruments	$	(322	)	$	(38	)	$	(179	)	$	(280	)

Derivative Instruments in Cash Flow Hedging Relationships

	Amount of (Gain) Loss on Derivative Instruments Recognized in Other Comprehensive (Income) Loss						Amount of (Gain) Loss on Derivative Instruments Reclassified from  Accumulated Other Comprehensive Loss
		2011			2010		2011		2010
(millions)
Three Months Ended September 30,
Commodity Derivative Instruments in Previously Designated Cash Flow Hedging Relationships (1)
Crude Oil Derivative Instruments		$	-		$	-	$	-	$	5
Natural Gas Derivative Instruments			-			-		-		-
Interest Rate Derivative Instruments in Cash Flow Hedging Relationships			-			47		-		-
Total		$	-		$	47	$	-	$	5
Nine Months Ended September 30,
Commodity Derivative Instruments in Previously Designated Cash Flow Hedging Relationships (1)
Crude Oil Derivative Instruments		$	-		$	-	$	-	$	14
Natural Gas Derivative Instruments			-			-		-		1
Interest Rate Derivative Instruments in Cash Flow Hedging Relationships			(23	)		141		1		-
Total		$	(23	)	$	141	$	1	$	15

(1) Includes effect of commodity derivative instruments previously accounted for as cash flow hedges. All net derivative gains and losses that were deferred in AOCL as a result of previous cash flow hedge accounting, had been reclassified to earnings by December 31, 2010.