if oil and gas prices decline , our revenues , profitability and cash flows from operations will also likely decrease which could cause us to alter our business plans , including reducing our drilling activities . such declines will require us to write down the carrying value of our oil and gas assets which will also cause a reduction in net income . the realized prices that we receive for our production differ from nymex futures and spot market prices , principally due to : basis differentials which are dependent on actual delivery location ; adjustments for btu content ; quality of the hydrocarbons ; and gathering , processing and transportation costs . the following table sets forth our average differentials for the years ended december 31 , 2019 and 2020 : replace_table_token_12_th _ ( 1 ) average realized prices are before the impact of hedging activities . the company 's derivative contracts as of december 31 , 2020 and december 31 , 2019 consisted of nymex-based fixed price swaps and basis differential swaps . under fixed price swaps , we receive a fixed price for our production and pay a variable market price to the contract counter-party . 38 as of december 31 , 2020 , we had nymex-based fixed price commodity swap arrangements , on approximately 88 % of the oil production from our estimated net proved developed producing reserves ( as of december 31 , 2020 ) through december 31 , 2021 , 96 % for 2022 , 72 % for 2023 and 88 % for 2024. by removing a portion of price volatility on our future oil and gas production , we believe we will mitigate , but not eliminate , the potential effects of changing commodity prices on our cash flows from operations for those periods . however , when prevailing market prices are higher than our contract prices , we will not realize increased cash flows on the portion of the production that has been hedged . we have in the past and will in the future sustain losses on both open and settled derivative contracts if market prices are higher than our contract prices . conversely , when prevailing market prices are lower than our contract prices , we will sustain realized and unrealized gains on our commodity derivative contracts . in 2020 , we recorded a gain of $ 42.9 million , consisting of a gain of $ 17.5 million on closed contracts and a gain of $ 25.4 million related to open contracts . in 2019 , we recognized a loss of $ 26.8 million , consisting of a loss of $ 6.0 million on closed contracts and a loss of $ 20.8 million related to open contracts . we have not designated any of these derivative contracts as a hedge as permitted by applicable accounting rules if certain conditions are met . substantially all of our hedging contracts were terminated subsequent to march 31 , 2021. see note 14 `` subseqemt events `` . the following table sets forth our derivative contracts at december 31 , 2020 : replace_table_token_13_th at december 31 , 2020 , the aggregate fair market value of our commodity derivative contracts was an asset of approximately $ 19.4 million . in april 2021 , we received notice that certain of our hedging agreements were being terminated as a result of events of default under the first lien credit facility , and we voluntarily terminated most of our other hedging arrangements . as a result of the settlement of the terminated hedges , we have outstanding obligations of $ 9.9 million . the settlement values of the terminated hedges were determined at various dates between april 15 and april 30 , 2021. these obligations will be added to the balance of the first lien credit facility and accrue interest at the default interest rate , currently 6.7 % , until repaid . our remaining hedging agreements may also be terminated as a result of such events of default . the settlement of terminated hedging agreements may result in losses and limit our ability to reduce exposure to adverse fluctuations in oil and gas prices . see note 14 “ subsequent events ” for current information regarding non-compliance with certain covenants . production volumes . our proved reserves will decline as oil and gas is produced , unless we find , acquire or develop additional properties containing proved reserves or conduct successful exploration and development activities . based on the reserve information set forth in our reserve report as of december 31 , 2020 , our average annual estimated decline rate for our net proved developed producing reserves is 39 % , 18 % , 14 % , 13 % and 12 % in 2021 , 2022 , 2023 , 2024 and 2025 , respectively , 9 % in the following five years , and approximately 9 % thereafter . these rates of decline are estimates and actual production declines could be materially higher . while we have had some success in finding , acquiring and developing additional reserves , we have not always been able to fully replace the production volumes lost from natural field declines and property sales . our ability to acquire or find additional reserves in the future will be dependent , in part , upon the amount of available funds for acquisition , exploration and development projects . the decline in oil prices that occurred in march 2020 , resulted in the suspension of our 2020 drilling program as well as shutting in production for some period of time . both of these events impacted our production volumes and will impact them going forward . story_separator_special_tag the table below sets forth the components of these capital expenditures : replace_table_token_15_th 42 during 2020 capital expenditures were primarily expenditures on our existing properties , designed to reduce lease operating expense , such as purchasing certain equipment as opposed to renting . we also performed extensive workovers on several wells in 2020. in 2019 , capital expenditures were for the exploration and development of our existing properties . the level of capital expenditures will vary during future periods depending on economic and industry conditions and commodity prices . should the prices of oil and gas decline and if our costs of operations increase or if our production volumes decrease , our cash flows from operations will decrease which may result in a reduction of capital expenditure . due to capital expenditure limits imposed by our credit facilities , we have not adopted a capital drilling budget for 2021 , but do intend to complete the six previously drilled wells in the bakken . if we can not incur significant capital expenditure , we will not be able to offset oil and gas production decreases caused by natural field declines . sources and uses of capital . the net funds provided by and or used in each of the operating , investing and financing activities are summarized in the following table and discussed in further detail below : replace_table_token_16_th operating activities for the year ended december 31 , 2020 provided $ 16.0 million in cash compared to $ 73.6 million in 2019. the reduction was primarily due to lower net income due to lower commodity prices and lower production volumes . investing activities used $ 12.6 million in 2020 primarily for the development of our existing properties . cash expenditures for the year ended december 31 , 2020 included a decrease in the accounts payable balance related to capital expenditures of $ 7.2 million , resulting in accrual based capital expenditures incurred during the period of $ 5.4 million . operating activities for the year ended december 31 , 2019 provided $ 73.6 million in cash . the reduction from 2018 was primarily due to lower net income due to lower commodity prices . investing activities used $ 85.0 million in 2019 primarily for the development of our existing properties and leasehold acquisitions . cash expenditures for the year ended december 31 , 2019 included a decrease in the accounts payable balance related to capital expenditures of $ 16.5 million , and an increase in our asset retirement obligation liability of $ 0.8 million , resulting in accrual based capital expenditures , net of dispositions of $ 23.4 million , incurred during the period of $ 93.0 million . financing activities provided $ 10.5 million primarily from net borrowings under our first lien credit facility and second lien credit facility . 43 story_separator_special_tag `` times new roman `` , times , serif ; font-size : 10pt ; margin : 0px ; text-align : justify ; ' > outstanding amounts under the first lien credit facility accrue interest at a rate per annum equal to ( a ) ( i ) for borrowings that we elect to accrue interest at the reference rate at the greater of ( x ) the reference rate announced from time to time by société générale , ( y ) the federal funds rate plus 0.5 % , and ( z ) daily one-month libor plus , in each case , 1.5 % -2.5 % , depending on the utilization of the borrowing base , and ( ii ) for borrowings that we elect to accrue interest at the eurodollar rate , libor plus 2.5 % -3.5 % depending on the utilization of the borrowing base , and ( b ) at any time an event of default exists , 3.0 % plus the amounts set forth above . at december 31 , 2020 , the interest rate on the first lien credit facility was approximately 3.6 % . subject to earlier termination rights and events of default , the stated maturity date of the first lien credit facility is may 16 , 2022. interest is payable quarterly on reference rate advances and not less than quarterly on libor advances . the company is permitted to terminate the first lien credit facility and is able , from time to time , to permanently reduce the lenders ' aggregate commitment under the first lien credit facility in compliance with certain notice and dollar increment requirements . each of the company 's subsidiaries has guaranteed our obligations under the first lien credit facility on a senior secured basis . obligations under the first lien credit facility are secured by a first priority perfected security interest , subject to certain permitted encumbrances , in all of the company and its subsidiary guarantors ' material property and assets . as of december 31 , 2020 , the collateral is required to include properties comprising at least 90 % of the pv-9 of the company 's proven reserves and 95 % of the pv-9 of the company 's pdp reserves . under the amended first lien credit facility , the company is subject to customary covenants , including financial covenants and reporting covenants . the amendment to the first lien credit facility dated june 25 , 2020 ( the `` 1l amendment `` ) modified certain provisions of the first lien credit facility , including ( i ) the addition of monthly mandatory prepayments from excess cash ( defined as available cash minus certain cash set-asides and a $ 3.0 million working capital reserve ) with corresponding reductions to the borrowing base ; ( ii ) the elimination of scheduled redeterminations ( which were previously made every six months ) and interim redeterminations ( which were previously made at the request of the lenders no more than once in the six month period between scheduled redeterminations ) of the borrowing base ; ( iii ) the replacement of total debt leverage

future capital resources . our principal sources of capital going forward , are cash flows from operations , proceeds from the sale of properties , monetizing of derivative instruments and if an opportunity presents itself , the sale of debt or equity securities , although we may not be able to complete financing on terms acceptable to us , if at all . cash from operating activities is dependent upon commodity prices and production volumes . a decrease in commodity prices from current levels would likely reduce our cash flows from operations . this could cause us to alter our business plans , including reducing our exploration and development plans . unless we otherwise expand and develop reserves , our production volumes may decline as reserves are produced . in the future we may continue to sell producing properties , which could further reduce our production volumes . to offset the loss in production volumes resulting from natural field declines and sales of producing properties , we must conduct successful exploration and development activities , acquire additional producing properties or identify and develop additional behind-pipe zones or secondary recovery reserves . we believe our numerous drilling opportunities will allow us to increase our production volumes ; however , our drilling activities are subject to numerous risks , including the risk that no commercially productive oil and gas reservoirs will be found .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```future capital resources . our principal sources of capital going forward , are cash flows from operations , proceeds from the sale of properties , monetizing of derivative instruments and if an opportunity presents itself , the sale of debt or equity securities , although we may not be able to complete financing on terms acceptable to us , if at all . cash from operating activities is dependent upon commodity prices and production volumes . a decrease in commodity prices from current levels would likely reduce our cash flows from operations . this could cause us to alter our business plans , including reducing our exploration and development plans . unless we otherwise expand and develop reserves , our production volumes may decline as reserves are produced . in the future we may continue to sell producing properties , which could further reduce our production volumes . to offset the loss in production volumes resulting from natural field declines and sales of producing properties , we must conduct successful exploration and development activities , acquire additional producing properties or identify and develop additional behind-pipe zones or secondary recovery reserves . we believe our numerous drilling opportunities will allow us to increase our production volumes ; however , our drilling activities are subject to numerous risks , including the risk that no commercially productive oil and gas reservoirs will be found .
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 Suspicious Activity Report : if oil and gas prices decline , our revenues , profitability and cash flows from operations will also likely decrease which could cause us to alter our business plans , including reducing our drilling activities . such declines will require us to write down the carrying value of our oil and gas assets which will also cause a reduction in net income . the realized prices that we receive for our production differ from nymex futures and spot market prices , principally due to : basis differentials which are dependent on actual delivery location ; adjustments for btu content ; quality of the hydrocarbons ; and gathering , processing and transportation costs . the following table sets forth our average differentials for the years ended december 31 , 2019 and 2020 : replace_table_token_12_th _ ( 1 ) average realized prices are before the impact of hedging activities . the company 's derivative contracts as of december 31 , 2020 and december 31 , 2019 consisted of nymex-based fixed price swaps and basis differential swaps . under fixed price swaps , we receive a fixed price for our production and pay a variable market price to the contract counter-party . 38 as of december 31 , 2020 , we had nymex-based fixed price commodity swap arrangements , on approximately 88 % of the oil production from our estimated net proved developed producing reserves ( as of december 31 , 2020 ) through december 31 , 2021 , 96 % for 2022 , 72 % for 2023 and 88 % for 2024. by removing a portion of price volatility on our future oil and gas production , we believe we will mitigate , but not eliminate , the potential effects of changing commodity prices on our cash flows from operations for those periods . however , when prevailing market prices are higher than our contract prices , we will not realize increased cash flows on the portion of the production that has been hedged . we have in the past and will in the future sustain losses on both open and settled derivative contracts if market prices are higher than our contract prices . conversely , when prevailing market prices are lower than our contract prices , we will sustain realized and unrealized gains on our commodity derivative contracts . in 2020 , we recorded a gain of $ 42.9 million , consisting of a gain of $ 17.5 million on closed contracts and a gain of $ 25.4 million related to open contracts . in 2019 , we recognized a loss of $ 26.8 million , consisting of a loss of $ 6.0 million on closed contracts and a loss of $ 20.8 million related to open contracts . we have not designated any of these derivative contracts as a hedge as permitted by applicable accounting rules if certain conditions are met . substantially all of our hedging contracts were terminated subsequent to march 31 , 2021. see note 14 `` subseqemt events `` . the following table sets forth our derivative contracts at december 31 , 2020 : replace_table_token_13_th at december 31 , 2020 , the aggregate fair market value of our commodity derivative contracts was an asset of approximately $ 19.4 million . in april 2021 , we received notice that certain of our hedging agreements were being terminated as a result of events of default under the first lien credit facility , and we voluntarily terminated most of our other hedging arrangements . as a result of the settlement of the terminated hedges , we have outstanding obligations of $ 9.9 million . the settlement values of the terminated hedges were determined at various dates between april 15 and april 30 , 2021. these obligations will be added to the balance of the first lien credit facility and accrue interest at the default interest rate , currently 6.7 % , until repaid . our remaining hedging agreements may also be terminated as a result of such events of default . the settlement of terminated hedging agreements may result in losses and limit our ability to reduce exposure to adverse fluctuations in oil and gas prices . see note 14 “ subsequent events ” for current information regarding non-compliance with certain covenants . production volumes . our proved reserves will decline as oil and gas is produced , unless we find , acquire or develop additional properties containing proved reserves or conduct successful exploration and development activities . based on the reserve information set forth in our reserve report as of december 31 , 2020 , our average annual estimated decline rate for our net proved developed producing reserves is 39 % , 18 % , 14 % , 13 % and 12 % in 2021 , 2022 , 2023 , 2024 and 2025 , respectively , 9 % in the following five years , and approximately 9 % thereafter . these rates of decline are estimates and actual production declines could be materially higher . while we have had some success in finding , acquiring and developing additional reserves , we have not always been able to fully replace the production volumes lost from natural field declines and property sales . our ability to acquire or find additional reserves in the future will be dependent , in part , upon the amount of available funds for acquisition , exploration and development projects . the decline in oil prices that occurred in march 2020 , resulted in the suspension of our 2020 drilling program as well as shutting in production for some period of time . both of these events impacted our production volumes and will impact them going forward . story_separator_special_tag the table below sets forth the components of these capital expenditures : replace_table_token_15_th 42 during 2020 capital expenditures were primarily expenditures on our existing properties , designed to reduce lease operating expense , such as purchasing certain equipment as opposed to renting . we also performed extensive workovers on several wells in 2020. in 2019 , capital expenditures were for the exploration and development of our existing properties . the level of capital expenditures will vary during future periods depending on economic and industry conditions and commodity prices . should the prices of oil and gas decline and if our costs of operations increase or if our production volumes decrease , our cash flows from operations will decrease which may result in a reduction of capital expenditure . due to capital expenditure limits imposed by our credit facilities , we have not adopted a capital drilling budget for 2021 , but do intend to complete the six previously drilled wells in the bakken . if we can not incur significant capital expenditure , we will not be able to offset oil and gas production decreases caused by natural field declines . sources and uses of capital . the net funds provided by and or used in each of the operating , investing and financing activities are summarized in the following table and discussed in further detail below : replace_table_token_16_th operating activities for the year ended december 31 , 2020 provided $ 16.0 million in cash compared to $ 73.6 million in 2019. the reduction was primarily due to lower net income due to lower commodity prices and lower production volumes . investing activities used $ 12.6 million in 2020 primarily for the development of our existing properties . cash expenditures for the year ended december 31 , 2020 included a decrease in the accounts payable balance related to capital expenditures of $ 7.2 million , resulting in accrual based capital expenditures incurred during the period of $ 5.4 million . operating activities for the year ended december 31 , 2019 provided $ 73.6 million in cash . the reduction from 2018 was primarily due to lower net income due to lower commodity prices . investing activities used $ 85.0 million in 2019 primarily for the development of our existing properties and leasehold acquisitions . cash expenditures for the year ended december 31 , 2019 included a decrease in the accounts payable balance related to capital expenditures of $ 16.5 million , and an increase in our asset retirement obligation liability of $ 0.8 million , resulting in accrual based capital expenditures , net of dispositions of $ 23.4 million , incurred during the period of $ 93.0 million . financing activities provided $ 10.5 million primarily from net borrowings under our first lien credit facility and second lien credit facility . 43 story_separator_special_tag `` times new roman `` , times , serif ; font-size : 10pt ; margin : 0px ; text-align : justify ; ' > outstanding amounts under the first lien credit facility accrue interest at a rate per annum equal to ( a ) ( i ) for borrowings that we elect to accrue interest at the reference rate at the greater of ( x ) the reference rate announced from time to time by société générale , ( y ) the federal funds rate plus 0.5 % , and ( z ) daily one-month libor plus , in each case , 1.5 % -2.5 % , depending on the utilization of the borrowing base , and ( ii ) for borrowings that we elect to accrue interest at the eurodollar rate , libor plus 2.5 % -3.5 % depending on the utilization of the borrowing base , and ( b ) at any time an event of default exists , 3.0 % plus the amounts set forth above . at december 31 , 2020 , the interest rate on the first lien credit facility was approximately 3.6 % . subject to earlier termination rights and events of default , the stated maturity date of the first lien credit facility is may 16 , 2022. interest is payable quarterly on reference rate advances and not less than quarterly on libor advances . the company is permitted to terminate the first lien credit facility and is able , from time to time , to permanently reduce the lenders ' aggregate commitment under the first lien credit facility in compliance with certain notice and dollar increment requirements . each of the company 's subsidiaries has guaranteed our obligations under the first lien credit facility on a senior secured basis . obligations under the first lien credit facility are secured by a first priority perfected security interest , subject to certain permitted encumbrances , in all of the company and its subsidiary guarantors ' material property and assets . as of december 31 , 2020 , the collateral is required to include properties comprising at least 90 % of the pv-9 of the company 's proven reserves and 95 % of the pv-9 of the company 's pdp reserves . under the amended first lien credit facility , the company is subject to customary covenants , including financial covenants and reporting covenants . the amendment to the first lien credit facility dated june 25 , 2020 ( the `` 1l amendment `` ) modified certain provisions of the first lien credit facility , including ( i ) the addition of monthly mandatory prepayments from excess cash ( defined as available cash minus certain cash set-asides and a $ 3.0 million working capital reserve ) with corresponding reductions to the borrowing base ; ( ii ) the elimination of scheduled redeterminations ( which were previously made every six months ) and interim redeterminations ( which were previously made at the request of the lenders no more than once in the six month period between scheduled redeterminations ) of the borrowing base ; ( iii ) the replacement of total debt leverage

