Fair Value Measurements and Disclosures (Tables)

9 Months Ended

Sep. 30, 2014

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

Our fixed-price swaps, basis swaps and physical purchases are included in Level 2 and our collars, calls and physical sales are included in Level 3. The following table presents, for each applicable level within the fair value hierarchy, our derivative assets and liabilities, including both current and non-current portions, measured at fair value on a recurring basis:



	September 30, 2014						December 31, 2013
	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets:
Commodity-based derivative contracts	$	20,817	$	6,369	$	27,186	$	3,852		$	2,098	$	5,950
Basis protection derivative contracts	—		—		—		74			—		74
Total assets	20,817		6,369		27,186		3,926			2,098		6,024
Liabilities:
Commodity-based derivative contracts	4,079		437		4,516		16,539			987		17,526
Basis protection derivative contracts	81		—		81		5			—		5
Total liabilities	4,160		437		4,597		16,544			987		17,531
Net asset (liability)	$	16,657	$	5,932	$	22,589	$	(12,618	)	$	1,111	$	(11,507	)

Fair Value Assets and Liabilities Unobservable Input Reconciliation

The following table presents a reconciliation of our Level 3 assets measured at fair value:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(in thousands)
Fair value, net asset (liability), beginning of period	$	(6,967	)	$	3,719		$	1,111		$	13,610
Changes in fair value included in statement of operations line item:
Commodity price risk management gain (loss), net	12,758			(3,242		)	3,961			(3,265		)
Sales from natural gas marketing	2			10			(24		)	16
Settlements included in statement of operations line items:
Commodity price risk management gain (loss), net	142			(66		)	882			(5,545		)
Sales from natural gas marketing	(3		)	(5		)	2			(34		)
Loss from discontinued operations, net of tax	—			—			—			(4,366		)
Fair value, net asset end of period	$	5,932		$	416		$	5,932		$	416

Net change in fair value of unsettled derivatives included in statement of operations line item:
Commodity price risk management gain (loss), net	$	11,831		$	(3,296	)	$	673		$	(5,451	)
Sales from natural gas marketing	1			(5		)	(2		)	4
Total	$	11,832		$	(3,301	)	$	671		$	(5,447	)

Concentration of Risk

The following table presents the counterparties that expose us to credit risk as of September 30, 2014 with regard to our derivative assets:



Counterparty Name	Fair Value of Derivative Assets
	(in thousands)
Canadian Imperial Bank of Commerce (1)	$	7,171
JP Morgan Chase Bank, N.A (1)	5,812
Wells Fargo Bank, N.A. (1)	5,343
Bank of Nova Scotia (1)	3,470
Key Bank N.A. (1)	2,540
Other lenders in our revolving credit facility	2,844
Various (2)	6
Total	$	27,186

__________

(1)Major lender in our revolving credit facility. See Note 7, Long-Term Debt.

(2)Represents a total of 26 counterparties.

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

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