Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Components of prepayments and other assets

The components of prepayments and other are as follows (in thousands):

	June 30,		December 31,
	2012		2011
Cash collateral deposits for commodity purchases	$	5,000	$	6,521
Insurance premiums		2,266		2,033
Commodity imbalances and futures		1,058		1,452
Rents, license and other		759		645
	$	9,083	$	10,651

Capitalized costs for non-producing oil and gas leasehold interests

On a quarterly basis, management evaluates the carrying value of non-producing oil and gas leasehold properties and may deem them impaired based on remaining lease term, area drilling activity  and the Company's plans for the property.  This fair value measure depends highly on management's assessment of the likelihood of continued exploration efforts in a given area and, as such, data inputs are categorized as "unobservable or Level 3" inputs.  Importantly, this fair value measure only applies to the write-down of capitalized costs and will never result in an increase to reported earnings. Accordingly, impairment provisions on non-producing properties totaling $558,000 and $562,000 were recorded for the six-month periods ended June 30, 2012 and 2011, respectively.  Such impairment provisions were $294,000 and $335,000 for the three-month periods ended June 30, 2012 and 2011, respectively.  Capitalized costs for non-producing oil and gas leasehold interests currently represent approximately four percent of total oil and gas property costs and are categorized as follows:

	June 30,		December 31,
	2012		2011
South Texas Project acreage	$	2,930,000	$	2,212,000
West Texas Project acreage		226,000		288,000
Napoleonville, Louisiana acreage		323,000		320,000
Other acreage areas		407,000		475,000
Total Non-producing Leasehold Costs	$	3,886,000	$	3,295,000

Schedule of Gas and Oil Acreage

The South Texas, West Texas and Napoleonville acreage areas have active or scheduled drilling operations underway and holding the underlying acreage is essential to the ongoing exploration effort.  The "Other Acreage Areas" category consists of smaller onshore interests dispersed over a wide geographical area. Since the Company is generally not the operator of its oil and gas property interests, it  does not maintain underlying detail acreage data and is dependent on the operator when determining which specific acreage will ultimately be drilled.  The capitalized cost detail on a property-by-property basis is reviewed however, by management, and deemed impaired if development is not anticipated prior to lease expiration.  Onshore leasehold periods are normally three years and may contain renewal options.  Capitalized cost activity on the "Other Acreage Areas" was as follows:

Balance December 31, 2011	$	475,000
Property additions		490,000
Impairments		(558,000	)
Balance June 30, 2012	$	407,000

Components of prepayments, cash deposits and other assets

The Company has established certain deposits to support participation in its liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits.  Insurance collateral deposits are invested at the discretion of the Company's insurance carrier and such investments primarily consist of intermediate term federal government bonds and bonds backed by federal agencies.  Components of cash deposits and other assets are as follows (in thousands):

	June 30,		December 31,
	2012		2011
Insurance collateral deposits	$	3,101	$	3,331
State collateral deposits		141		168
Materials and supplies		697		668
	$	3,939	$	4,167

Derivatives reflected in the Unaudited Condensed Consolidated Balance Sheet

None of the Company's derivative instruments have been designated as hedging instruments and the estimated fair value of forward month commodity contracts (derivatives) is reflected in the accompanying Unaudited Condensed Consolidated Balance Sheet as of June 30, 2012 as follows (in thousands):

	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation	$	4,426		$	-	$	-		$	-
Liability Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation		-			-		4,036			-
Less Counterparty Offsets		(3,416	)		-		(3,416	)		-
As Reported Fair Value Contracts	$	1,010		$	-	$	620		$	-

Forward month commodity contracts (derivatives) are reflected in the accompanying Unaudited Condensed Consolidated Balance Sheet as of December 31, 2011 as follows (in thousands):

	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation	$	3,500		$	-	$	-		$	-
Liability Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation		-			-		2,117			-
Less Counterparty Offsets		(1,436	)		-		(1,436	)		-
As Reported Fair Value Contracts	$	2,064		$	-	$	681		$	-

Derivatives reflected in the Unaudited Condensed Consolidated Statement of Operations

Forward month commodity contracts (derivatives) are reflected in the accompanying Unaudited Condensed Consolidated Statement of Operations for the six and three-month periods ended June 30, 2012 and 2011 as follows (in thousands):

	Earnings (Loss) Six Months Ended June 30,					Earnings (Loss) Three Months Ended June 30,
	2012			2011		2012		2011
Revenues - marketing	$	(993	)	$	508	$	1,889	$	(306	)

Fair value assets and liabilities

As of June 30, 2012, the Company's fair value assets and liabilities are summarized and categorized as follows (in thousands):

	Market Data Inputs
	Gross Level 1			Gross Level 2			Gross Level 3		Counterparty
	Quoted Prices			Observable			Unobservable		Offsets			Total
Derivatives
- Current assets	$	-		$	4,426		$	-	$	(3,416	)	$	1,010
- Current liabilities		(513	)		(3,523	)		-		3,416			(620	)
Net Value	$	(513	)	$	903		$	-	$	-		$	390

As of December 31, 2011, the Company's fair value assets and liabilities are summarized and categorized as follows (in thousands):

	Market Data Inputs
	Gross Level 1			Gross Level 2			Gross Level 3		Counterparty
	Quoted Prices			Observable			Unobservable		Offsets			Total
Derivatives
- Current assets	$	1,455		$	2,045		$	-	$	(1,436	)	$	2,064
- Current liabilities		(675	)		(1,442	)		-		1,436			(681	)
Net Value	$	780		$	603		$	-	$	-		$	1,383