Annual report pursuant to Section 13 and 15(d)

DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)

v2.4.1.9
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables)
12 Months Ended
Dec. 31, 2014
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT [Abstract]  
Open commodity swap contracts
The following table reflects open commodity swap contracts as of December 31, 2014, the associated volumes and the corresponding fixed price.

Settlement Period
 
Oil (Barrels)
   
Fixed Price
 
Swaps-Crude Oil
           
01/01/15 – 06/30/15
    360,000       89.15  
01/01/15 – 06/30/15
    60,000       90.50  
01/01/15 – 06/30/15
    180,000       88.55  
01/01/15 – 06/30/15
    180,000       88.00  
01/01/15 – 06/30/15
    60,000       90.75  
01/01/15 – 06/30/15
    60,000       90.25  
01/01/15 – 06/30/15
    90,000       89.00  
01/01/15 – 06/30/15
    90,000       89.00  
01/01/15 – 12/31/15
    720,000       89.00  
01/01/15 – 12/31/15
    360,000       89.00  
01/01/15 – 12/31/15
    360,000       89.02  
01/01/15 – 12/31/15
    180,000       89.00  
01/01/15 – 12/31/15
    180,000       89.00  
07/01/15 – 12/31/15(1)
    180,000       90.75  
07/01/15 – 12/31/15(1)
    180,000       91.00  
07/01/15 – 12/31/15(1)
    180,000       91.25  
07/01/15 – 06/30/16
    360,000       89.00  
07/01/15 – 06/30/16
    360,000       90.00  
07/01/15 – 06/30/16
    360,000       91.00  
01/01/16 – 06/30/16
    180,000       90.00  
01/01/16 – 06/30/16
    90,000       90.00  
01/01/16 – 06/30/16
    90,000       90.00  
_________________

(1)
The Company has entered into crude oil derivative contracts that give counterparties the option to extend certain current derivative contracts for an additional six-month period.  Options covering a notional volume of 90,000 barrels per month are exercisable on or about December 31, 2015.  If the counterparties exercise all such options, the notional volume of the Company’s existing crude oil derivative contracts will increase by 90,000 barrels per month at an average price of $91.00 per barrel for each month during the period January 1, 2016 through June 30, 2016.
Schedule of weighted average price of open commodity derivative contracts
The following table reflects the weighted average price of open commodity derivative contracts as of December 31, 2014, by year with associated volumes.

Weighted Average Price
Of Open Commodity Swap Contracts
 
Year
 
Volumes (Bbl)
   
Weighted
Average Price
 
2015
    3,960,000       89.43  
2016
    900,000       90.00  
Derivatives instruments balance sheet location
The following table sets forth the amounts, on a gross basis, and classification of the Company’s outstanding derivative financial instruments at December 31, 2014 and 2013, respectively.  Certain amounts may be presented on a net basis on the consolidated financial statements when such amounts are with the same counterparty and subject to a master netting arrangement:

Type of Crude Oil Contract
 
Balance Sheet Location
   
 December 31,
Estimated Fair Value
 
2014
     
2013
                     
Derivative Assets:
                   
Swap Contracts
 
Current Assets
   
      128,893,220
   
            62,890
Swap Contracts
 
Non-Current Assets
     
25,013,011
     
1,745,405
Total Derivative Assets
       
      153,906,231
   
       1,808,295
                     
Derivative Liabilities:
                   
Swap Contracts
 
Current Liabilities
     
                        -
     
   (19,111,820)
Costless Collars
 
Current Assets/Liabilities
     
-
     
(7,826)
Swap Contracts
 
Non-Current Liabilities
     
-
     
(637,208)
Swaption Contracts
 
Non-Current Liabilities
   
(579,070)
   
-
Total Derivative Liabilities
       
          (579,070)
   
   (19,756,854)
Gain (loss) in statement of income
The following disclosures are applicable to the Company’s financial statements, as of December 31, 2014, 2013 and 2012:

Derivative Type
 
Location of Loss for Effective and Ineffective Portion of Derivative in Income
 
Amount of Loss Reclassified from AOCI into Income
 
       
Year Ended December 31,
 
       
2014
   
2013
   
2012
 
Commodity – Cash Flow
 
Loss on Settled Derivatives
  $ -     $ -     $ 101,309  
Reconciliation between gross assets and liabilities and the amounts reflected on balance sheet
The tables presented below provide reconciliation between the gross assets and liabilities and the amounts reflected on the balance sheet.  The amounts presented exclude derivative settlement receivables and payables as of the balance sheet dates.

   
Estimated Fair Value at December 31, 2014
 
   
Gross Amounts of Recognized Assets
   
Gross Amounts Offset in the
Balance Sheet
   
Net Amounts of Assets Presented in the Balance Sheet
 
                   
Offsetting of Derivative Assets:
       
Current Assets
  $ 128,893,220     $ -     $ 128,893,220  
Non-Current Assets
    25,013,011       -       25,013,011  
Total Derivative Assets
  $ 153,906,231     $ -     $ 153,906,231  
                         
Offsetting of Derivative Liabilities:
         
Current Liabilities
  $ -     $ -     $ -  
Non-Current Liabilities
    (579,070 )     -       (579,070 )
Total Derivative Liabilities
  $ (579,070 )   $ -     $ (579,070 )
 
   
Estimated Fair Value at December 31, 2013
 
   
Gross Amounts of Recognized Assets
   
Gross Amounts Offset in the
Balance Sheet
   
Net Amounts of Assets Presented in the Balance Sheet
 
                   
Offsetting of Derivative Assets:
       
Current Assets
  $ 629,178     $ (566,288 )   $ 62,890  
Non-Current Assets
    2,589,079       (843,674 )     1,745,405  
Total Derivative Assets
  $ 3,218,257     $ (1,409,962 )   $ 1,808,295  
                         
Offsetting of Derivative Liabilities:
         
Current Liabilities
  $ (19,685,934 )   $ 566,288     $ (19,119,646 )
Non-Current Liabilities
    (1,480,882 )     843,674       (637,208 )
Total Derivative Liabilities
  $ (21,166,816 )   $ 1,409,962     $ (19,756,854 )