Commitments and Contingencies

9 Months Ended

Sep. 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.

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 September 30, 2012. In addition, as of September 30, 2012, we have an ARO liability of approximately $4.5 million attributable to the plugging of abandoned wells.