Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Fair Value Measurements

v3.20.2
Note 3 - Fair Value Measurements
6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

3.

Fair Value Measurements

 

Derivative Financial Instruments

 

We measure the fair value of our open derivative financial instruments by applying the income approach, using models with inputs that are classified within Level 2 of the valuation hierarchy.  The inputs used for the fair value measurement of our open derivative financial instruments are the exercise price, the expiration date, the settlement date, notional quantities, the implied volatility, the discount curve with spreads and published commodity future prices.  Our open derivative financial instruments are reported in the Condensed Consolidated Balance Sheets using fair value.  See Note 6, Derivative Financial Instruments, for additional information on our derivative financial instruments.

 

The following table presents the fair value of our open derivative financial instruments (in thousands):

 

   

June 30, 2020

   

December 31, 2019

 

Assets:

               

Derivatives instruments - open contracts, current

  $ 15,266     $ 6,921  

Derivatives instruments - open contracts, long-term

    3,486       2,653  
                 

Liabilities:

               

Derivatives instruments - open contracts, current

    1,779       1,785  
Derivatives instruments - open contracts, long-term     2,137        

 

Long-Term Debt

 

We believe the carrying value of our debt under the Credit Agreement approximates fair value because the interest rates are variable and reflective of current market rates. The fair value of our Senior Second Lien Notes was measured using quoted prices, although the market is not a very active market. The fair value of our long-term debt was classified as Level 2 within the valuation hierarchy.  See Note 2, Long-Term Debt for additional information on our long-term debt.

 

The following table presents the carrying value and fair value of our long-term debt (in thousands):

 

   

June 30, 2020

   

December 31, 2019

 
   

Carrying Value

   

Fair Value

   

Carrying Value

   

Fair Value

 

Liabilities:

                               

Credit Agreement

  $ 80,000     $ 80,000     $ 105,000     $ 105,000  

Senior Second Lien Notes

    544,222       346,862       614,533       597,188