Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies

10. Commitments and Contingencies

Commitments

Our most significant commitments consist of the purchase of oil and gas well drilling services, capacity utilization under firm transportation service agreements and operating leases for field and office equipment and office space, as more fully described in our Annual Report on Form 10-K for the year endedDecember 31, 2011.

We have contractual commitments for certain firm transportation capacity in the Appalachian region that expire in 2022 and, as a result of the recently completed sale, we will no longer have production to satisfy these commitments. While we intend to sell our unused firm transportation in the future to the extent possible, we expect to record a charge of approximately $15 million to $18 million in the third quarter of 2012 representing the liability for estimated discounted future net cash outflows over the remaining term of the contract.

Contingencies - Legal and Regulatory

We are involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, our management believes that these claims will not have a material effect on our financial position, results of operations or cash flows. During 2010, we established a $0.9 million reserve for a litigation matter pertaining to certain properties that remains outstanding as of June 30, 2012. In addition, as of June 30, 2012, we have an ARO liability of approximately $6.4 million attributable to the plugging of abandoned wells.