Derivative Instruments

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Natural gas derivatives

As of and for the three months ended March 31, 2019 the Company had outstanding natural gas derivative contracts to economically hedge against the variability in cash flows associated with sales of natural gas production. Such contracts matured in 2019 and the Company had no commodity derivative contracts outstanding at December 31, 2019 and March 31, 2020.

The Company recognizes its derivative instruments, if any, on the balance sheet as either assets or liabilities measured at fair value. The estimated fair value of derivatives is based upon various factors, including commodity exchange prices, over-the-counter quotations and, in the case of collars, volatility, the risk-free interest rate, and the time to expiration. Historically, the Company has not designated its derivatives as hedges for accounting purposes and, as a result, marked its derivative instruments to fair value and recognized the changes in fair value in the unaudited condensed consolidated statements of comprehensive income (loss) under the caption “Loss on natural gas derivatives, net”.

Natural gas derivative gains and losses

Cash receipts in the following table reflect the gain on derivative contracts which matured during the applicable period, calculated as the difference between the contract price and the market settlement price of matured contracts. The Company's 2019 natural gas derivatives were settled based upon reported NYMEX Henry Hub settlement prices. Non-cash losses below represent the change in fair value of derivative instruments which continued to be held at period end, if any, and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured during the period.

	Three months ended March 31,
In thousands	2020		2019
Cash received on derivatives:
Natural gas fixed price swaps	$	—	$	7,645
Natural gas collars	—		5,417
Cash received on derivatives, net	—		13,062
Non-cash loss on derivatives:
Natural gas fixed price swaps	—		(8,704		)
Natural gas collars	—		(5,482		)
Non-cash loss on derivatives, net	—		(14,186		)
Loss on natural gas derivatives, net	$	—	$	(1,124	)