On October 9, 2012, we and our wholly-owned subsidiary, VNR Finance Corp., completed a public offering of $200.0 million aggregate principal amount of 7.875% senior unsecured notes due 2020 (the “Additional Senior Notes”), pursuant to a prospectus supplement to the 2012 Shelf Registration Statement. We received net proceeds of approximately $196.4 million from this offering, after deducting underwriting discounts of $3.5 million and offering costs of $0.1 million. We originally offered and sold $350.0 million aggregate principal amount of initial notes on April 4, 2012 (the “Senior Notes”). The Additional Senior Notes have identical terms, other than the issue date, and constitute part of the same series as and are fungible with the Senior Notes. Further, like the Senior Notes, the Additional Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by our Subsidiary Guarantors, subject to the same guaranty release conditions.On September 17, 2012, we completed a public offering of 6,000,000 of our common units at a price of $27.51 per unit. Offers were made pursuant to a prospectus supplement to the 2012 Shelf Registration Statement. After consideration of an additional 900,000 of our common units that were offered to the underwriters to cover over-allotments pursuant to this offering, we received net proceeds of approximately $182.3 million, after deducting underwriting discounts of $7.4 million and offering costs of $0.1 million. Hedging Activities We enter into derivative transactions in the form of hedging arrangements to reduce the impact of oil and natural gas price volatility on our cash flow from operations. We have mitigated some of the volatility through 2015 for crude oil and through 2017 for natural gas by implementing a hedging program on a portion of our total anticipated production. At September 30, 2012, the fair value of commodity derivative contracts was an asset of approximately $79.8 million, of which $36.6 million settles during the next twelve months. Currently, we use fixed-price swaps, basis swaps, swaptions, puts, three-way collars and NYMEX collars to hedge oil and natural gas prices.