PROPERTIES AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2012

PROPERTIES AND EQUIPMENT, NET

PROPERTIES AND EQUIPMENT, NET

2. PROPERTIES AND EQUIPMENT, NET

Properties and equipment, net are comprised of the following:

	September 30,			December 31,
(In thousands)	2012			2011
Proved Oil and Gas Properties	$	5,618,507		$	5,006,846
Unproved Oil and Gas Properties	478,999			478,942
Gathering and Pipeline Systems	238,962			238,660
Land, Building and Other Equipment	83,301			80,908
	6,419,769			5,805,356
Accumulated Depreciation, Depletion and Amortization	(2,200,848		)	(1,870,772		)
	$	4,218,921		$	3,934,584

At September 30, 2012, the Company did not have any projects that had exploratory well costs that were capitalized for a period of greater than one year after drilling.

Divestitures

In June 2012, the Company sold a 35% non-operated working interest associated with certain of its Pearsall shale undeveloped leaseholds in south Texas to a wholly-owned subsidiary of Osaka Gas Co., Ltd. (Osaka) for total consideration of approximately $251.0 million.  The Company received $125.0 million in cash proceeds and Osaka agreed to fund 85% of the Company’s share of future drilling and completion costs associated with these leaseholds until it has paid approximately $126.0 million in accordance with a joint development agreement entered into at the closing. The drilling and completion carry will terminate two years after the closing of the transaction. The Company recognized a $67.0 million gain on sale of assets associated with this sale.

During the first nine months of 2011, the Company entered into two participation agreements with third parties related to certain of its Haynesville and Bossier shale leaseholds in east Texas. Under the terms of the participation agreements, the third parties agreed to fund 100% of the cost to drill and complete certain Haynesville and Bossier shale wells in the related leaseholds over a multi-year period in exchange for a 75% working interest in the leaseholds. During the first nine months of 2011, the Company received reimbursement of drilling costs incurred of approximately $11.2 million associated with wells that had commenced drilling prior to the execution of the participation agreements.

In May 2011, the Company sold certain of its Haynesville and Bossier Shale oil and gas properties in east Texas to a third party. The Company received approximately $47.0 million in cash proceeds and recognized a $34.2 million gain on sale of assets.