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Oil and Gas Reserve Information - Unaudited
12 Months Ended
Dec. 31, 2013
Oil and Gas Exploration and Production Industries Disclosures [Abstract]  
Oil and Gas Reserve Information (Unaudited)
—Oil and Gas Reserve Information—Unaudited
The Company’s net proved oil and gas reserves at December 31, 2013 have been estimated by independent petroleum engineers in accordance with guidelines established by the SEC using a historical 12-month average pricing assumption.
The estimates of proved oil and gas reserves constitute those quantities of oil, gas,and natural gas liquids, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. However, there are numerous uncertainties inherent in estimating quantities of proved reserves and in providing the future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. In addition, the present values should not be construed as the current market value of the Company’s oil and gas properties or the cost that would be incurred to obtain equivalent reserves.
During 2013, the Company’s estimated proved reserves increased by 32%. This increase was primarily due to the Gulf of Mexico Acquisition, the success of the Company's drilling programs and approximately 33 Bcfe of PUD reserves added as a result of the increase in the historical 12-month average price per Mcf of natural gas used to calculate estimated proved reserves. In total, the Company added approximately 63 Bcfe of proved reserves in Oklahoma, 41 Bcfe in the Gulf Coast and 6 Bcfe in Texas. Overall, the Company had a 88% drilling success rate during 2013 on 40 gross wells drilled.

    
The following table sets forth an analysis of the Company’s estimated quantities of net proved and proved developed oil (including condensate), gas and natural gas liquid reserves, all located onshore and offshore the continental United States:
 
Oil
in
MBbls
 
NGL
in
MMcfe
 
Natural Gas
in
MMcf
 
Total
Reserves
in MMcfe
Proved reserves as of December 31, 2010
1,623

 
8,373

 
174,566

 
192,677

  Revisions of previous estimates
(294
)
 
308

 
8,418

 
6,962

  Extensions, discoveries and other additions
595

 
8,627

 
82,113

 
94,310

  Purchase of producing properties
43

 
91

 
1,292

 
1,641

  Production
(572
)
 
(2,288
)
 
(24,463
)
 
(30,183
)
Proved reserves as of December 31, 2011
1,395

 
15,111

 
241,926

 
265,407

  Revisions of previous estimates
215

 
(958
)
 
(52,076
)
 
(51,744
)
  Extensions, discoveries and other additions
647

 
14,572

 
46,390

 
64,844

  Sale of reserves in place
(81
)
 

 
(15,806
)
 
(16,292
)
  Production
(521
)
 
(3,365
)
 
(27,466
)
 
(33,957
)
Proved reserves as of December 31, 2012
1,655

 
25,360

 
192,968

 
228,258

  Revisions of previous estimates
(123
)
 
520

 
37,738

 
37,518

  Extensions, discoveries and other additions
434

 
6,099

 
30,429

 
39,132

  Purchase of producing properties
1,833

 
1,915

 
22,274

 
35,187

  Sale of reserves in place
(34
)
 

 
(15
)
 
(218
)
  Production
(681
)
 
(4,754
)
 
(29,226
)
 
(38,066
)
Proved reserves as of December 31, 2013
3,084

 
29,140

 
254,168

 
301,811

 
 
 
 
 
 
 
 
Proved developed reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  As of December 31, 2011
1,160

 
11,071

 
143,441

 
161,472

 
 
 
 
 
 
 
 
  As of December 31, 2012
1,225

 
20,608

 
140,307

 
168,265

 
 
 
 
 
 
 
 
  As of December 31, 2013
2,709

 
23,173

 
163,728

 
203,152

 
 
 
 
 
 
 
 
Proved undeveloped reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  As of December 31, 2011
235

 
4,040

 
98,485

 
103,935

 
 
 
 
 
 
 
 
  As of December 31, 2012
430

 
4,752

 
52,661

 
59,993

 
 
 
 
 
 
 
 
  As of December 31, 2013
375

 
5,967

 
90,440

 
98,659


    
The following tables (amounts in thousands) present the standardized measure of future net cash flows related to proved oil and gas reserves together with changes therein, as defined by ASC Topic 932. Future production and development costs are based on current costs with no escalations. Estimated future cash flows have been discounted to their present values based on a 10% annual discount rate.
Standardized Measure
 
 
December 31,
 
2013
 
2012
 
2011
Future cash flows
$
1,265,663

 
$
748,914

 
$
1,080,392

Future production costs
(301,710
)
 
(220,750
)
 
(264,219
)
Future development costs
(193,985
)
 
(121,346
)
 
(180,846
)
Future income taxes
(40,072
)
 
(10,205
)
 
(86,612
)
Future net cash flows
729,896

 
396,613

 
548,715

10% annual discount
(276,014
)
 
(164,218
)
 
(244,834
)
Standardized measure of discounted future net cash flows
$
453,882

 
$
232,395

 
$
303,881


Changes in Standardized Measure
 
Year Ended December 31,
 
2013
 
2012
 
2011
Standardized measure at beginning of year
$
232,395

 
$
303,881

 
$
236,375

 
 
 
 
 
 
Sales and transfers of oil and gas produced, net of production costs
(134,184
)
 
(92,562
)
 
(116,398
)
Changes in price, net of future production costs
57,293

 
(138,842
)
 
(10,219
)
Extensions and discoveries, net of future production and development costs
70,181

 
104,066

 
178,901

Changes in estimated future development costs, net of development costs incurred during this period
(24,327
)
 
69,499

 
915

Revisions of quantity estimates
57,468

 
(56,352
)
 
11,236

Accretion of discount
23,927

 
34,137

 
25,565

Net change in income taxes
(14,061
)
 
30,617

 
(18,215
)
Purchase of reserves in place
191,964

 

 
4,805

Sale of reserves in place
(411
)
 
(8,186
)
 

Changes in production rates (timing) and other
(6,363
)
 
(13,863
)
 
(9,084
)
Net increase (decrease) in standardized measure
221,487

 
(71,486
)
 
67,506

Standardized measure at end of year
$
453,882

 
$
232,395

 
$
303,881


The historical twelve-month average prices of oil, gas and natural gas liquids used in determining standardized measure were:
 
2013
 
2012
 
2011
Oil, $/Bbl
$106.19
 
$102.81
 
$101.42
Ngls, $/Mcfe
5.10

 
6.07

 
8.62

Natural Gas, $/Mcf
3.11

 
2.20

 
3.34