Divestitures and Discontinued Operations

6 Months Ended

Jun. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

DIVESTITURES AND DISCONTINUED OPERATIONS

Permian Basin. In October 2011, we developed a plan to divest 100% of our Permian Basin assets, consisting of producing wells and undeveloped leaseholds. During the fourth quarter of 2011, we completed the sale of our non-core Permian assets to unrelated third parties for a total of $13.2 million. On December 20, 2011, we executed a purchase and sale agreement which was approved by our Board of Directors (the "Board"), with COG Operating LLC (“COG”), a wholly owned subsidiary of Concho Resources Inc., an unrelated third-party, for the sale of our core Permian Basin assets for a sale price of $173.9 million, subject to customary terms and adjustments, including adjustments based on title and environmental due diligence to be conducted by COG. The effective date of the transaction was November 1, 2011. Following the sale to COG, we do not have significant continuing involvement in the operations of, or cash flows from, these assets; accordingly, the Permian assets were reclassified as held for sale as of December 31, 2011, and the results of operations related to those assets have been separately reported as discontinued operations in the condensed consolidated statement of operations for all periods presented. On February 28, 2012, the divestiture closed. Upon final settlement, total proceeds received were $189.2 million after closing adjustments, resulting in a pretax gain on sale of $19.9 million.

North Dakota. During the fourth quarter of 2010, we developed a plan to divest 100% of our North Dakota assets, consisting of producing wells, undeveloped leaseholds and related facilities primarily located in Burke County. The plan received approval from our Board and, in December 2010, we executed a letter of intent with an unrelated third-party. In February 2011, we executed a purchase and sale agreement and subsequently closed with the same unrelated party. Proceeds from the sale were $9.5 million, net of non-affiliated investor partners' share of $3.8 million, resulting in a pretax gain on sale of $3.9 million. Following the sale to the unrelated party, we do not have significant continuing involvement in the operations of, or cash flows from, these assets; accordingly, the results of operations related to the North Dakota assets have been reported as discontinued operations in the condensed consolidated statement of operations for the six months ended 2011.

Selected financial information related to divested and discontinued operations. The table below presents selected operational information related to discontinued operations. While the reclassification of revenues and expenses related to discontinued operations for the prior period had no impact on previously reported net earnings, the statement of operations table below presents the revenues and expenses that were reclassified from the specified statement of operations line items to discontinued operations. The six months ended 2011, in addition to the discontinued operations data of our Permian assets, includes operations data related to the February 2011 divestiture of our North Dakota assets.

	Three Months Ended June 30,					Six Months Ended June 30,
Statement of Operations - Discontinued Operations	2012			2011		2012			2011
	(dollars in thousands)
Revenues
Natural gas, NGL and crude oil sales	$	—		$	6,453	$	4,456		$	11,969
Well operations, pipeline income and other	—			26		34			69
Total revenues	—			6,479		4,490			12,038
Costs, expenses and other
Production costs	—			2,779		1,668			5,478
Exploration expense	—			6		—			35
Depreciation, depletion and amortization	—			2,082		—			3,454
(Gain) loss on sale of properties and equipment	415			—		(19,920		)	(3,854		)
Total costs, expenses and other	415			4,867		(18,252		)	5,113
Income (loss) from discontinued operations	(415		)	1,612		22,742			6,925
Provision for income taxes	(34		)	612		8,668			2,602
Income (loss) from discontinued operations, net of tax	$	(381	)	$	1,000	$	14,074		$	4,323