Business Combinations (Tables)

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Fair Value of Warrants as Part of Consideration for Acquisition

The fair value of the Replacement Warrants was estimated on the Acquisition Date using the Black-Scholes option pricing model with the following assumptions:

Exercise price (CDN dollars per warrant)	$	9.67
Risk-free interest rate	1.3		%
Expected life	0.45 years
Volatility	44		%
Expected annual dividend per share	Nil
Estimated fair value per warrant (CDN dollars)	$	0.32

Allocation of Consideration Transferred Based on Fair Values

The following table shows the allocation of the consideration transferred based on the fair values of the assets and liabilities acquired:

(Thousands of U.S. Dollars)
Consideration Transferred:
Common shares issued net of share issue costs	$	141,690
Replacement Warrants	1,354
	$	143,044
Allocation of Consideration Transferred:
Oil and gas properties
Proved	$	58,457
Unproved	161,278
Other long-term assets	4,417
Net working capital (including cash acquired of $7.7 million and accounts receivable of $6.4 million)	(17,223		)
Asset retirement obligation	(4,901		)
Bank debt	(22,853		)
Other long-term liabilities	(14,432		)
Gain on acquisition	(21,699		)
	$	143,044

Pro Forma Information

Pro forma results for the nine months ended September 30, 2011 are shown below, as if the acquisition had occurred on January 1, 2010. Pro forma results are not indicative of actual results or future performance.

	Nine Months Ended September 30,
(Thousands of U.S. Dollars, except per share amounts)	2011
Revenue and other income	$	444,867
Net income	$	61,542
Net income per share - basic	$	0.23
Net income per share - diluted	$	0.22