Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2012

Location and Fair Value Amounts of Derivative Instruments Reported in Balance Sheet

The following tables disclose the location and fair value amounts of derivative instruments reported in our balance sheet at September 30, 2012 and December 31, 2011.

Fair Value of Derivative Instruments at September 30, 2012
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	34.0	Current liabilities: Fair value of hedging contracts	($	1.1	)
	Long-term assets: Fair value of hedging contracts		18.2	Long-term liabilities: Fair value of hedging contracts		(2.3	)
		$	52.2		($	3.4	)

Fair Value of Derivative Instruments at December 31, 2011
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	25.2	Current liabilities: Fair value of hedging contracts	($	11.1	)
	Long-term assets: Fair value of hedging contracts		22.5	Long-term liabilities: Fair value of hedging contracts		(0.8	)
		$	47.7		($	11.9	)

Effect of Derivative Instruments in Statement of Operations

The following tables disclose the effect of derivative instruments in the statement of operations for the three and nine-month periods ended September 30, 2012 and 2011.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended September 30, 2012 and 2011 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivatives (a)					Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (b)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2012			2011		Location	2012		2011		Location	2012			2011
Commodity contracts	($	33.2	)	$	76.0	Operating revenue – oil/gas production	$	10.0	$	1.3	Derivative income (expense), net	($	1.8	)	$	4.1
Total	($	33.2	)	$	76.0		$	10.0	$	1.3		($	1.8	)	$	4.1

(a) Net of related tax effect of ($19.2) million and $40.4 million for the three months ended September 30, 2012 and 2011, respectively.

(b) For the three months ended September 30, 2012, effective hedging contracts increased oil revenue by $4.1 million and increased gas revenue by $5.9 million. For the three months ended September 30, 2011, effective hedging contracts decreased oil revenue by $3.3 million and increased gas revenue by $4.6 million.

The Effect of Derivative Instruments on the Statement of Operations for the Nine Months Ended September 30, 2012 and 2011 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivatives (a)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (b)						Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2012		2011		Location	2012		2011			Location	2012		2011
Commodity contracts	$	7.9	$	79.6	Operating revenue – oil/gas production	$	18.4	($	13.1	)	Derivative income, net	$	3.1	$	3.3
Total	$	7.9	$	79.6		$	18.4	($	13.1	)		$	3.1	$	3.3

(a) Net of related tax effect of $4.6 million and $44.4 million for the nine months ended September 30, 2012 and 2011, respectively.

(b) For the nine months ended September 30, 2012, effective hedging contracts increased oil revenue by $1.1 million and increased gas revenue by $17.3 million. For the nine months ended September 30, 2011, effective hedging contracts decreased oil revenue by $26.1 million and increased gas revenue by $13.0 million.

Hedging Positions

The following table illustrates our hedging positions for calendar years 2012, 2013, 2014 and 2015 as of November 2, 2012:

	Fixed-Price Swaps NYMEX (except where noted)
	Natural Gas				Oil
	Daily Volume (MMBtus/d)		Swap Price ($)		Daily  Volume (Bbls/d)			Swap Price ($)
2012		10,000		5.035		1,000			90.30
2012		10,000		5.040		1,000			90.41
2012		10,000		5.050		1,000			90.45
2012						1,000			95.50
2012						2,000			97.60
2012						1,000			98.15
2012						1,000			100.00
2012						1,000			101.55
2012						1,000			104.25
2012						1,000	*		111.02
2013		10,000		4.000		1,000			92.80
2013		10,000		5.270		2,000	**		94.05
2013		10,000		5.320		1,000			94.45
2013						1,000			94.60
2013						1,000			97.15
2013						1,000			101.53
2013						1,000			103.00
2013						1,000			103.15
2013						1,000			104.25
2013						1,000			104.47
2013						1,000			104.50
2013						1,000	*		107.30
2014		10,000		4.000		1,000			90.06
2014		10,000		4.250		1,000			93.55
2014						1,000			98.00
2014						1,000			98.30
2014						1,000			99.65
2014						1,000	*		103.30
2015		10,000		4.005		1,000			90.00