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## Index to Financial Statements 

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(1) Based on last day settlement prices from monthly futures contracts. 

(2) This discount includes a basis differential, a heating content adjustment, physical basis sales, third-party transportation charges and fuel charges, and excludes financial basis hedges. 

Sales of natural gas, oil and NGL production are conducted under contracts that reflect current prices and are subject to seasonal price swings. We are unable to predict changes in the market demand and price for natural gas, including changes that may be induced by the effects of weather on demand for our production. We regularly enter into various derivative and other financial arrangements with respect to a portion of our projected production to support certain desired levels of cash flow and to minimize the impact of price fluctuations. We limit derivative agreements to counterparties with appropriate credit standings, and our policies prohibit speculation. 

As of December 31, 2018, we had the following commodity price derivatives in place on our targeted future production: 

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As of February 26, 2019, we had the following commodity price derivatives in place on our targeted future production: 

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We intend to financially protect pricing on a large portion of expected future production volumes designed to assure certain desired levels of cash flow. We refer you to Item 7A of Part II of this Annual Report, “Quantitative and Qualitative Disclosures about Market Risk,”  for further information regarding our derivatives and risk management as of December 31, 2018. 

