Investment in Oil and Gas Properties

12 Months Ended

Dec. 31, 2011

Investment in Oil and Gas Properties [Abstract]

INVESTMENT IN OIL AND GAS PROPERTIES:

NOTE 6 — INVESTMENT IN OIL AND GAS PROPERTIES:

The following table discloses certain financial data relative to our oil and gas producing activities located onshore and offshore the continental United States:

		$000,000,00			$000,000,00			$000,000,00
	Year Ended December 31,
	2011			2010			2009
Oil and gas properties, proved and unevaluated:
Balance, beginning of year	$	6,202,758		$	5,741,081		$	5,409,770
Costs incurred during the year (capitalized):
Acquisition costs, net of sales of unevaluated properties		270,354			127,069			9,072
Exploratory costs		84,199			42,205			78,582
Development costs (1)		426,355			241,387			199,375
Salaries, general and administrative costs		24,430			20,521			19,107
Interest		42,033			30,783			25,573
Less: overhead reimbursements		(352	)		(288	)		(398	)
Total costs incurred during the year, net of divestitures		847,019			461,677			331,311
Balance, end of year	$	7,049,777		$	6,202,758		$	5,741,081
Accumulated depreciation, depletion and amortization (DD&A):
Balance, beginning of year	($	4,804,949	)	($	4,555,372	)	($	3,781,600	)
Provision for DD&A		(276,480	)		(242,745	)		(253,790	)
Write-down of oil and gas properties		—			—			(508,989	)
Sale of proved properties		(93,300	)		(6,832	)		(10,993	)
Balance, end of year	($	5,174,729	)	($	4,804,949	)	($	4,555,372	)
Net capitalized costs, proved and unevaluated	$	1,875,048		$	1,397,809		$	1,185,709
DD&A per Mcfe	$	3.54		$	3.18		$	3.23

(1) Includes asset retirement costs of $96,386, $56,444 and $78,387, respectively.

		$000,000,000,		$000,000,000,		$000,000,000,
Costs incurred during the year (expensed):
Lease operating expenses	$	179,475	$	152,326	$	156,786
Production taxes		9,380		5,808		7,920
Accretion expense		30,764		34,469		39,306
Expensed costs	$	219,619	$	192,603	$	204,012

At December 31, 2009, our ceiling test computation (See Note 1) resulted in a write-down of our U.S. oil and gas properties of $165,057 based on twelve-month average prices of $58.95 per barrel of oil and $3.49 per Mcf of natural gas. The benefit of hedges in place at December 31, 2009 reduced the write-down by $94,541. At March 31, 2009, our ceiling test computation resulted in a write-down of our U.S. oil and gas properties of $343,932 based on a March 31, 2009 gas price of $3.62 per Mcf and an oil price of $45.64 per barrel.

The following table discloses net costs incurred (evaluated) on our unevaluated properties:

		$000,000,000			$000,000,000		$000,000,000
	Year Ended December 31,
	2011			2010		2009
Unevaluated oil and gas properties:
Net costs incurred (evaluated) during year:
Acquisition costs	($	2,397	)	$	42,664	($	203,776	)
Exploration costs		(51,207	)		10,491		15,337
Capitalized interest		42,033			30,783		23,943
	($	11,571	)	$	83,938	($	164,496	)

The following table discloses financial data associated with unevaluated costs at December 31, 2011:

	Balance as of December 31, 2011		Net Costs Incurred During the Year Ended December 31,
			2011		2010		2009		2008 and prior
Acquisition costs	$	245,771	$	61,496	$	108,344	$	9,603	$	66,328
Exploration costs		99,542		55,931		9,658		33,953		—
Capitalized interest		56,296		19,232		28,226		5,002		3,836
Total unevaluated costs	$	401,609	$	136,659	$	146,228	$	48,558	$	70,164

Approximately 80 specifically identified drilling projects are included in unevaluated costs at December 31, 2011 and are expected to be evaluated in the next four years. The excluded costs will be included in the amortization base as the properties are evaluated and proved reserves are established or impairment is determined. Interest costs capitalized on unevaluated properties during the years ended December 31, 2011, 2010 and 2009 totaled $42,033, $30,783 and $23,943, respectively.