Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments

v2.4.1.9
Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2015
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

4.  Derivative Financial Instruments

Our market risk exposure relates primarily to commodity prices and interest rates. As of March 31, 2015 and December 31, 2014, we did not have any open derivative contracts.  During 2014, we used crude oil swap contracts and have used various derivative instruments in recent years to manage our exposure to commodity price risk from sales of our oil and natural gas. While these contracts were intended to reduce the effects of price volatility, they may have limited income from favorable price movements.

We have elected not to designate our commodity derivative contracts as hedging instruments; therefore, all changes in the fair value of derivative contracts were recognized currently in earnings during the three months ended March 31, 2014.  The cash flows of all of our commodity derivative contracts are included in Net cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows.

Changes in the fair value of our oil derivative contracts were as follows (in thousands):

 

 

Three Months Ended

 

 

March 31,

 

 

2015

 

 

2014

 

Derivative loss

$

—

 

 

$

7,492

 

 

Cash payments on derivative settlements, net, are included within Net cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows and were as follows (in thousands):

 

 

Three Months Ended

 

 

March 31,

 

 

2015

 

 

2014

 

Cash payments on derivative settlements, net

$

—

 

 

$

4,670