Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION:

NOTE 12 — STOCK-BASED COMPENSATION:

We record stock compensation expense under U.S. GAAP for stock options and other equity-based compensation awards based on the fair value on the date of grant. Compensation expense for equity-based compensation awards is recognized in our financial statements over the vesting period of the award.

For the year ended December 31, 2011, we incurred $8,914 of stock based compensation, of which $8,796 related to restricted stock issuances, $118 related to stock option grants and of which a total of approximately $3,010 was capitalized into oil and gas properties. For the year ended December 31, 2010, we incurred $8,462 of stock based compensation, of which $8,263 related to restricted stock issuances, $199 related to stock option grants and of which a total of approximately $2,775 was capitalized into oil and gas properties. For the year ended December 31, 2009, we incurred $8,845 of stock based compensation, of which $7,624 related to restricted stock issuances, $1,221 related to stock option grants and of which a total of approximately $2,901 was capitalized into oil and gas properties. Because of the non-cash nature of stock based compensation, the expensed portion of stock based compensation is added back to the net income (loss) in arriving at net cash provided by operating activities in our statement of cash flows. The capitalized portion is not included in net cash used in investing activities.

Under our 2009 Amended and Restated Stock Incentive Plan (the “2009 Plan”), we may grant both incentive stock options qualifying under Section 422 of the Internal Revenue Code and options that are not qualified as incentive stock options to all employees and directors. All such options must have an exercise price of not less than the fair market value of the common stock on the date of grant and may not be re-priced without stockholder approval. Stock options to all employees vest ratably over a five-year service-vesting period and expire ten years subsequent to award. Stock options issued to non-employee directors vest ratably over a three-year service-vesting period and expire ten years subsequent to award. In addition, the 2009 Plan provides that shares available under the 2009 Plan may be granted as restricted stock. Restricted stock typically vests over a one to three-year period.

Stock Options. There were no stock option grants during the years ended December 31, 2011 or 2010, and stock options granted during the year ended December 31, 2009 were immaterial.

A summary of stock option activity under the Plan during the year ended December 31, 2011 is as follows (amounts in table represent actual values except where indicated otherwise):

	Number of Options			Wgtd. Avg. Exercise Price		Wgtd. Avg. Term		Aggregate Intrinsic Value (in  thousands)
Options outstanding, beginning of period		484,694		$	39.43
Granted		—			—
Exercised		—			—
Forfeited		(13,300	)		37.98
Expired		(33,000	)		48.85
Options outstanding, end of period		438,394			38.76		3.6 years	$	1,143
Options exercisable, end of period		378,710			41.66		3.1 years		457
Options unvested, end of period		59,684			20.36		6.1 years		686

Exercise prices for stock options outstanding at December 31, 2011 range from $6.97 to $53.20.

A summary of stock option activity under the Plan during the year ended December 31, 2010 is as follows (amounts in table represent actual values except where indicated otherwise):

	Number of Options			Wgtd. Avg. Exercise Price		Wgtd. Avg. Term		Aggregate Intrinsic Value (in  thousands)
Options outstanding, beginning of period		495,283		$	39.61
Granted		—			—
Exercised		—			—
Forfeited		(6,190	)		40.85
Expired		(4,399	)		57.76
Options outstanding, end of period		484,694			39.43		3.8 years	$	880
Options exercisable, end of period		396,115			43.21		3.4 years		176
Options unvested, end of period		88,579			22.50		6.9 years		704

A summary of stock option activity under the Plan during the year ended December 31, 2009 is as follows (amounts in table represent actual values except where indicated otherwise):

	Number of Options			Wgtd. Avg. Exercise Price		Wgtd. Avg. Term		Aggregate Intrinsic Value (in  thousands)
Options outstanding, beginning of period		510,779		$	45.21
Granted		64,474			8.64
Exercised		—			—
Forfeited		(14,470	)		33.59
Expired		(65,500	)		54.15
Options outstanding, end of period		495,283			39.61		4.7 years	$	607
Options exercisable, end of period		363,709			44.40		4.1 years		—
Options unvested, end of period		131,574			26.37		7.3 years		607

Restricted Stock. The fair value of restricted shares is typically determined based on the average of our high and low stock prices on the grant date. During the year ended December 31, 2011, we issued 597,062 shares of restricted stock valued at $14,100. During the year ended December 31, 2010, we issued 395,869 shares of restricted stock valued at $6,251. During the year ended December 31, 2009, we issued 538,635 shares of restricted stock valued at $5,831.

A summary of the restricted stock activity under the Plan for the years ended December 31, 2011, 2010 and 2009 is as follows (amounts in table represent actual values):

	2011					2010					2009
	Number of Restricted Shares			Wgtd. Avg. Fair Value Per Share		Number of Restricted Shares			Wgtd. Avg. Fair Value Per Share		Number of Restricted Shares			Wgtd. Avg. Fair Value Per Share
Restricted stock outstanding, beginning of period		783,606		$	17.24		751,437		$	20.68		408,383		$	43.31
Issuances		597,062			23.62		395,869			15.79		538,635			10.83
Lapse of restrictions		(419,543	)		19.91		(343,657	)		23.09		(177,123	)		41.73
Forfeitures		(37,385	)		18.92		(20,043	)		18.07		(18,458	)		26.74
Restricted stock outstanding, end of period		923,740		$	20.08		783,606		$	17.24		751,437		$	20.68

As of December 31, 2011, there was $11,541 of unrecognized compensation cost related to all non-vested share-based compensation arrangements under the Plan. That cost is being amortized on a straight-line basis over the vesting period and is expected to be recognized over a weighted-average period of 1.8 years.

Under U.S. GAAP, if tax deductions exceed book compensation expense, then excess tax benefits are credited to additional paid-in capital to the extent realized. If book compensation expense exceeds tax deductions, the tax deficit results in either a reduction in additional paid-in capital or an increase in income tax expense depending on certain circumstances. Adjustments to additional paid-in capital related to the net tax effect of stock option exercises and restricted stock vesting were $735, ($2) and ($1,647) in 2011, 2010 and 2009, respectively.