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Divestitures and Assets Held for Sale
9 Months Ended
Sep. 30, 2012
Divestitures and Assets Held for Sale Disclosure [Abstract]  
Divestitures and Assets Held for Sale
Note 3 - Assets Held for Sale

Assets are classified as held for sale when the Company commits to a plan to sell the assets and there is reasonable certainty that the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated or depleted, and a measurement for impairment is performed and any excess carrying value over the fair value less costs to sell of the assets held for sale is expensed. Subsequent changes to the estimated fair value less the costs to sell will impact the measurement of assets held for sale for which fair value less costs to sell is determined to be less than the carrying value of the assets.

As of September 30, 2012, the accompanying condensed consolidated balance sheets (“accompanying balance sheets”) present $19.5 million of assets held for sale, net of accumulated depletion, depreciation, and amortization expense. A corresponding asset retirement obligation liability of $749,000 is separately presented. The assets held for sale include the Company’s Marcellus shale assets located in Pennsylvania and certain assets located in the Company’s Mid-Continent region, all of which were written down to their respective estimated fair values less costs to sell. This write down is reflected in the gain (loss) on divestiture activity line item in the accompanying condensed consolidated statements of operations (“accompanying statements of operations”). During the third quarter of 2012, the Company divested of assets that were located in its Rocky Mountain region that were classified as held for sale at June 30, 2012. The Company determined that neither these planned nor executed asset sales qualify for discontinued operations accounting under financial statement presentation authoritative guidance.

During the first nine months of 2012, the Company reclassified a portion of the assets previously held for sale to assets held and used, as the assets were no longer being actively marketed. The assets were measured at the lower of the carrying value of the assets before being classified as held for sale, adjusted for any depletion, depreciation, and amortization expense (“DD&A”) that would have been recognized had the assets been continuously held and used, or the fair value of the assets at the date they no longer met the criteria as held for sale. As a result of this measurement, the Company recognized $1.7 million of DD&A expense and a $33.2 million loss on unsuccessful sale of properties, which is included in the gain (loss) on divestiture activity line item in the accompanying statements of operations.