Transactions with Affiliates and Other Related Parties

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

TRANSACTIONS WITH AFFILIATES AND OTHER RELATED PARTIES

Affiliated Partnerships. Our Gas Marketing segment markets the natural gas produced by our affiliated partnerships in the Eastern Operating Region. Our sales from natural gas marketing include $0.1 million and $0.2 millionin the three and six months ended 2012, respectively, related to the marketing of natural gas on behalf of our affiliated partnerships, compared to$0.5 million and $0.7 million in the three and six months ended 2011, respectively. Our cost of natural gas marketing includes $0.1 million and $0.2 millionin the three and six months ended 2012, respectively, compared to$0.4 million and $0.6 million in the three and six months ended 2011, respectively, related to these sales.

Amounts due from/to the affiliated partnerships are primarily related to derivative positions and, to a lesser extent, unbilled well lease operating expenses, and costs resulting from audit and tax preparation services. We have entered into derivative instruments on behalf of our 21 affiliated partnerships for a portion of their estimated production. As of June 30, 2012 and December 31, 2011, we had a payable to affiliates of $11.1 million and $14.2 million, respectively, representing their designated portion of the fair value of our gross derivative assets, and a receivable from affiliates of $4.6 million and $6.2 million, respectively, representing their designated portion of the fair value of our gross derivative liabilities.

We provide well operations and pipeline services to our affiliated partnerships. The majority of our revenue and expenses related to well operations and pipeline income are associated with services provided to our affiliated partnerships.

PDCM. Our Gas Marketing segment markets the natural gas produced by PDCM. Our sales from natural gas marketing include $2.2 million and $4.6 millionin the three and six months ended 2012, respectively, related to the marketing of natural gas on behalf of PDCM, compared to$3.3 million and $5.1 million in the three and six months ended 2011, respectively. Our cost of natural gas marketing includes $2.1 million and $4.5 millionin the three and six months ended 2012, respectively, compared to$3.3 million and $5.1 million in the three and six months ended 2011, respectively, related to these sales.

We provide certain well operating and administrative services for PDCM. Amounts billed to PDCM for these services were $3.0 million and $6.2 million in the three and six months ended 2012, respectively, compared to $2.2 million and $4.5 million in 2011. Our statements of operations include only our proportionate share of these billings.

Former Executive Officer. In June 2011, Richard W. McCullough resigned from his positions as our Chief Executive Officer and the Chairman of the Board, effective immediately. In connection with his resignation, in July 2011, Mr. McCullough and the Company executed a separation agreement whereby Mr. McCullough received those benefits to which he was entitled under Section 7(d) of his employment agreement, dated as of April 19, 2010, including without limitation separation compensation in the amount of $4.1 million, less required withholdings, his annual non-qualified deferred supplemental retirement benefit equal to $30,000 for each of the years 2012 through 2021 (not accelerated), less required withholdings, continued coverage under the Company’s group health plans at the Company’s cost for a period equal to the lesser of 18 months or such period ending as of the date Mr. McCullough is eligible to participate in another employer’s group health plan, immediate vesting of any unvested Company stock options, SARs and restricted stock and issuance of shares representing the vested portion of his 2009 performance share awards. Related to this separation agreement, the statement of operations for 2011 reflects a charge to general and administrative expense of $6.7 million.