Fair Value of Financial Instruments and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments and Concentrations of Credit Risk

7.     Fair Value of Financial Instruments and Concentrations of Credit Risk

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, receivables, payables and debt. We believe the carrying values of these instruments, with the exception of our Senior Notes, approximated their fair values at December 31, 2011 and December 31, 2010. The estimated fair value of our Senior Notes is $195.8 million at December 31, 2011 and $157.0 million at December 31, 2010, based on quoted market prices at these respective dates.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, trade accounts and notes receivable. At December 31, 2011, substantially all of our U.S. cash deposits are held in accounts at a financial institution with deposit ratings of P-1 by Moody’s, A-1 by Standard and Poor’s, and F1+ by Fitch. As part of our investment strategy, we perform periodic evaluations of the relative credit standing of these financial institutions.

Accounts Receivable.    Accounts receivable at December 31, 2011 and 2010 include the following:

	2011			2010
	(In thousands)
Gross trade receivables	$	306,791		$	193,349
Allowance for doubtful accounts		(3,161	)		(5,839	)
Net trade receivables		303,630			187,510
Other receivables		24,960			9,289
Total receivables, net	$	328,590		$	196,799

Other receivables includes $21.9 million for value added, goods and service taxes related to foreign jurisdictions and other tax related receivables.

We derive a significant portion of our revenues from companies in the E&P industry, and our customer base is highly concentrated in major and independent oil and gas E&P companies operating in the markets that we serve. In 2011, approximately 43% of our consolidated revenues were derived from our 20 largest customers. We maintain an allowance for losses based upon the expected collectability of accounts receivable. Changes in this allowance for 2011, 2010 and 2009 are as follows.

	2011			2010			2009
	(In thousands)
Balance at beginning of year	$	5,839		$	5,969		$	4,259
Provision for uncollectible accounts		2,400			478			2,301
Write-offs, net of recoveries		(5,078	)		(608	)		(591	)
Balance at end of year	$	3,161		$	5,839		$	5,969

During 2011, $5.2 million of fully reserved trade receivables were written off against the allowance for doubtful accounts. During the years ended December 31, 2011, 2010 and 2009, no single customer accounted for more than 10% of total sales.