Derivative Instruments and Hedging Activities

As of December 31, 2017, the Company had the following outstanding financial commodity derivatives:

Collars

Floor

Ceiling

Basis Swaps

Type of Contract

Volume

Contract Period

Range

Weighted-Average

Range

Weighted- Average

Financial contracts

Natural gas (Leidy)

17.7

Bcf

Jan. 2018 - Dec. 2018

(0.71

)

Natural gas (Transco)

21.3

Bcf

Jan. 2018 - Dec. 2019

0.42

Crude oil (WTI/LLS)

2.9

Mmbbl

Jan. 2018 - Dec. 2018

$—

55.00

$63.35-$63.80

63.62

In January 2018, we entered into the following financial commodity derivatives:



				Swaps	Basis Swaps
Type of Contract	Volume		Contract Period	Weighted- Average	Weighted- Average
Financial contracts
Natural gas (NYMEX)	84.4	Bcf	Feb. 2018 - Dec. 2018	$2.93
Natural gas (NYMEX)	13.3	Bcf	Feb. 2018 - Oct. 2018	$3.10
Natural gas (Leidy)	16.2	Bcf	Feb. 2018 - Dec. 2018		$(0.68)

In the tables above, natural gas prices are stated per Mcf and crude oil prices are stated per barrel.

As of December 31, 2017, the Company had the following outstanding physical commodity derivatives:



Type of Contract	Volume		Contract Period	Weighted-Average Fixed Price
Physical contracts
Natural gas purchase	81.2	Bcf	Jan. 2018 - Oct. 2018	$3.70
Natural gas sales	11.7	Bcf	Jan. 2018 - Feb. 2018	$4.71

In the table above, natural gas prices are stated per Mcf.

In January 2018, the Company terminated certain physical purchase contracts prior to their settlement date. The termination did not have a material impact on the Consolidated Financial Statements, as the contracts were previously recognized at fair value.

Effect of Derivative Instruments on the Consolidated Balance Sheet



		Fair Values of Derivative Instruments
		Derivative Assets				Derivative Liabilities
		December 31,				December 31,
(In thousands)	Balance Sheet Location	2017		2016		2017		2016
Commodity contracts	Other assets (non-current)	$	2,239	$	2,991	$	—	$	—
Commodity contracts	Derivative instruments (current)	—		—		30,637		40,259
		$	2,239	$	2,991	$	30,637	$	40,259

Offsetting of Derivative Assets and Liabilities in the Consolidated Balance Sheet



	December 31,
(In thousands)	2017		2016
Derivative assets
Gross amounts of recognized assets	$	2,239	$	2,991
Gross amounts offset in the statement of financial position	—		—
Net amounts of assets presented in the statement of financial position	2,239		2,991
Gross amounts of financial instruments not offset in the statement of financial position	—		—
Net amount	$	2,239	$	2,991

Derivative liabilities
Gross amounts of recognized liabilities	$	30,637	$	40,259
Gross amounts offset in the statement of financial position	—		—
Net amounts of liabilities presented in the statement of financial position	30,637		40,259
Gross amounts of financial instruments not offset in the statement of financial position	241		757
Net amount	$	30,878	$	41,016

Effect of Derivative Instruments on the Consolidated Statement of Operations



	Year Ended December 31,
(In thousands)	2017		2016			2015
Cash received (paid) on settlement of derivative instruments
Gain (loss) on derivative instruments	$	8,056	$	(1,682	)	$	194,289
Non-cash gain (loss) on derivative instruments
Gain (loss) on derivative instruments	8,870		(37,268		)	(137,603		)
	$	16,926	$	(38,950	)	$	56,686

Additional Disclosures about Derivative Instruments and Hedging Activities

The use of derivative instruments involves the risk that the counterparties will be unable to meet their obligations under the agreements. The Company's counterparties are primarily commercial banks and financial service institutions that management believes present minimal credit risk and its derivative contracts are with multiple counterparties to minimize its exposure to any individual counterparty. The Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable.

Certain counterparties to the Company's derivative instruments are also lenders under its revolving credit facility. The Company's revolving credit facility and derivative instruments contain certain cross default and acceleration provisions that may require immediate payment of its derivative liabilities in certain situations. The Company also has netting arrangements with each of its counterparties that allow it to offset assets and liabilities from separate derivative contracts with that counterparty.