Decommissioning and Other Asset Retirement Obligations

6 Months Ended

Jun. 30, 2012

Notes to Financial Statements [Abstract]

Decommissioning and Other Asset Retirement Obligations

NOTE D - DECOMMISSIONING AND OTHER ASSET RETIREMENT OBLIGATIONS

The large majority of our asset retirement obligations consists of the future well abandonment and decommissioning costs for offshore oil and gas properties and platforms owned by our Maritech subsidiary, including the remaining abandonment, decommissioning, and debris removal costs associated with offshore platforms previously destroyed by hurricanes. The amount of decommissioning liabilities recorded by Maritech is reduced by amounts allocable to joint interest owners and any contractual amounts to be paid by the previous owners of the oil and gas properties when the liabilities are satisfied.

The changes in the asset retirement obligations during the three month and six month periods ended June 30, 2012 and 2011, are as follows:

	Three Months Ended June 30,
	2012			2011
	(In Thousands)
Beginning balance for the period, as reported	$	126,844		$	230,834
Activity in the period:
Accretion of liability		501			1,264
Retirement obligations incurred		-			-
Revisions in estimated cash flows		7,876			16,045
Settlement of retirement obligations		(22,083	)		(103,618	)
Ending balance as of June 30	$	113,138		$	144,525

11

	Six Months Ended June 30,
	2012			2011
	(In Thousands)
Beginning balance for the period, as reported	$	139,835		$	272,815
Activity in the period:
Accretion of liability		1,021			3,158
Retirement obligations incurred		-			-
Revisions in estimated cash flows		10,106			25,809
Settlement of retirement obligations		(37,824	)		(157,257	)
Ending balance as of June 30	$	113,138		$	144,525

Revisions in estimated cash flows during the second quarter of 2012 resulted primarily from additional work anticipated to be required on Maritech's offshore oil and gas properties. Settlements of retirement obligations during the three and six months ended June 30, 2011, include approximately $72.7 and $118.7 million, respectively, of obligations associated with oil and gas properties sold by Maritech during these periods.