Derivative Instruments

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company recognizes all derivative instruments on the balance sheet as either assets or liabilities measured at fair value. The Company has not designated its derivative instruments as hedges for accounting purposes and, as a result, marks its derivative instruments to fair value and recognizes the changes in fair value in the consolidated statements of comprehensive income (loss) under the caption “Gain (loss) on derivative instruments, net.”

The Company may utilize swap and collar derivative contracts to economically hedge against the variability in cash flows associated with the sale of future crude oil and natural gas production. While the use of these derivative instruments limits the downside risk of adverse price movements, their use also limits future revenues from upward price movements.

With respect to a fixed price swap contract, the counterparty is required to make a payment to the Company if the settlement price for any settlement period is less than the swap price, and the Company is required to make a payment to the counterparty if the settlement price for any settlement period is greater than the swap price. For a collar contract, the counterparty is required to make a payment to the Company if the settlement price for any settlement period is below the floor price, and the Company is required to make a payment to the counterparty if the settlement price for any settlement period is above the ceiling price. Neither party is required to make a payment to the other party if the settlement price for any settlement period is between the floor price and the ceiling price.

The Company's derivative contracts are settled based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on Inter-Continental Exchange ("ICE") pricing for Brent crude oil and natural gas derivative settlements based on NYMEX Henry Hub pricing. The estimated fair value of derivative contracts is based upon various factors, including commodity exchange prices, over-the-counter quotations, and, in the case of collars and written call options, volatility, the risk-free interest rate, and the time to expiration. The calculation of the fair value of collars and written call options requires the use of an option-pricing model. See Note 6. Fair Value Measurements.

At December 31, 2015, the Company had outstanding derivative contracts with respect to future production as set forth in the tables below. The hedged volumes reflected below represent an aggregation of multiple derivative contracts that have varying durations and may not be realized on a ratable basis over a calendar year.

Crude Oil - ICE Brent
Period and Type of Contract	Bbls	Ceiling Price
January 2016 - December 2016
Written call options - ICE Brent (1)	1,464,000	$	107.70

(1) Written call options represent the ceiling positions remaining from the Company's previous crude oil collar contracts. The floor positions of the collars were liquidated in the fourth quarter of 2014. For these written call options, the Company is required to make a payment to the counterparty if the settlement price for any settlement period is above the ceiling price.

Natural Gas - Henry Hub		Swaps Weighted Average Price		Floors			Ceilings
					Weighted Average Price			Weighted Average Price
Period and Type of Contract	MMBtus			Range			Range
January 2016 - December 2016
Swaps - Henry Hub	133,710,000	$	3.17
January 2017 - December 2017
Swaps - Henry Hub	25,550,000	$	3.35
Collars - Henry Hub	65,700,000			$2.40 - $3.00	$	2.47	$2.92 - $3.88	$	3.08

Derivative gains and losses

The following table presents cash settlements on matured or liquidated derivative instruments and non-cash gains and losses on open derivative instruments for the periods presented. Cash receipts and payments below reflect proceeds received upon early liquidation of derivative positions and gains or losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price of matured contracts. Non-cash gains and losses below represent the change in fair value of derivative instruments which continue to be held at period end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured or were liquidated during the period.

	Year ended December 31,
In thousands	2015			2014			2013
Cash received (paid) on derivatives:
Crude oil fixed price swaps (1)	$	—		$	331,591		$	(54,289	)
Crude oil collars (1)	—			65,310			(16,867		)
Natural gas fixed price swaps	39,670			(11,551		)	9,601
Natural gas collars	29,883			—			—
Cash received (paid) on derivatives, net	69,553			385,350			(61,555		)
Non-cash gain (loss) on derivatives:
Crude oil fixed price swaps	—			84,792			(117,580		)
Crude oil collars	—			1,121			(8,587		)
Crude oil written call options	4,715			3,981			—
Natural gas fixed price swaps	41,828			62,699			(4,029		)
Natural gas collars	(25,011		)	21,816			—
Non-cash gain (loss) on derivatives, net	21,532			174,409			(130,196		)
Gain (loss) on derivative instruments, net	$	91,085		$	559,759		$	(191,751	)

(1) Net cash receipts for crude oil swaps and collars for the year ended December 31, 2014 include $433 million of proceeds received from crude oil derivative contracts that were settled in the fourth quarter of 2014 prior to their contractual maturities. Of the proceeds, $373 million related to crude oil swap liquidations and $60 million related to crude oil collar liquidations.

Balance sheet offsetting of derivative assets and liabilities

The Company’s derivative contracts are recorded at fair value in the consolidated balance sheets under the captions “Derivative assets”, “Noncurrent derivative assets”, “Derivative liabilities”, and “Noncurrent derivative liabilities”. Derivative assets and liabilities with the same counterparty that are subject to contractual terms which provide for net settlement are reported on a net basis in the consolidated balance sheets.

The following table present the gross amounts of recognized derivative assets and liabilities, the amounts offset under netting arrangements with counterparties, and the resulting net amounts presented in the consolidated balance sheets for the periods presented, all at fair value.

	December 31,
In thousands	2015			2014
Commodity derivative assets:
Gross amounts of recognized assets	$	120,385		$	84,431
Gross amounts offset on balance sheet	(11,903		)	(16		)
Net amounts of assets on balance sheet	108,482			84,415
Commodity derivative liabilities:
Gross amounts of recognized liabilities	(19,192		)	(4,770		)
Gross amounts offset on balance sheet	11,903			16
Net amounts of liabilities on balance sheet	$	(7,289	)	$	(4,754	)

The following table reconciles the net amounts disclosed above to the individual financial statement line items in the consolidated balance sheets.

	December 31,
In thousands	2015			2014
Derivative assets	$	93,922		$	52,423
Noncurrent derivative assets	14,560			31,992
Net amounts of assets on balance sheet	108,482			84,415
Derivative liabilities	(3,583		)	(1,645		)
Noncurrent derivative liabilities	(3,706		)	(3,109		)
Net amounts of liabilities on balance sheet	(7,289		)	(4,754		)
Total derivative assets, net	$	101,193		$	79,661