Commitments And Contingencies

9 Months Ended

Sep. 30, 2014

Commitments And Contingencies [Abstract]

Commitments And Contingencies

(11) Commitments and Contingencies

The Company as designated operator of the Hoactzin properties was administratively issued an Incidence of Non-Compliance by BSEE during the quarter ended September 30, 2012 concerning one of Hoactzins operated properties. This action calls for payment of a civil penalty of $386,000 for failure to provide, upon request, documentation to the BSEE evidencing that certain safety inspections and tests had been conducted in 2011. In the 4^th quarter of 2012, the Company filed an administrative appeal with the Interior Board of Land Appeals (IBLA) of this action in order to attempt to significantly reduce the civil penalty. This appeal required a fully collateralized appeal bond to postpone the payment obligation until the appeal was determined. The Company posted and collateralized this bond with RLI Insurance Company. If the bond was not posted, the appeal would have been administratively denied and the order to the Company as operator to pay the $386,000 penalty would have become final. On June 23, 2014, the IBLA affirmed the civil penalty without reduction. On September 22, 2014, the Company sought judicial review of the June 23, 2014 agency action in the federal district court in the Eastern District of Louisiana at New Orleans. While the civil penalty could ultimately be reduced in the judicial review process, as a result of the determination by the IBLA, the Company recorded a liability of $386,000 in the Companys Consolidated Balance Sheets under Accrued and other current liabilities and an expense in its Consolidated Statements of Operations under Production costs and taxes for the nine months ended September 30, 2014.