11. SUBSEQUENT EVENTS

In April 2016, we entered into put contracts on 36,000 barrels of oil per month for the period from June 2016 through February 2017 at Dated Brent of $40 per barrel. This volume represents approximately one-third of our total forecast sales volumes for the period. While these crude oil derivative contracts are intended to be an economic hedge, they do not qualify for hedge accounting. The contracts will be marked to market each period, with changes in value flowing through net income. The $0.8 million cost of these puts will be recorded as a deferred asset and amortized to net income in the period to which they relate.