10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission file number 1-12074

STONE ENERGY CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	72-1235413
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

625 E. Kaliste Saloom Road
Lafayette, Louisiana	70508
(Address of Principal Executive Offices)	(Zip Code)

(337) 237-0410

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of May 2, 2013, there were 49,968,210 shares of the registrant’s common stock, par value $.01 per share, outstanding.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheet as of March 31, 2013 and December 31, 2012	1
	Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2013 and 2012	2
	Condensed Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2013 and 2012	3
	Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2013 and 2012	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	Not Applicable
Item 4.	Mine Safety Disclosures	Not Applicable
Item 5.	Other Information	Not Applicable
Item 6.	Exhibits	26
	Signature	29

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

STONE ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

	March 31,			December 31,
	2013			2012
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	261,353		$	279,526
Accounts receivable		147,336			167,288
Fair value of hedging contracts		18,712			39,655
Current income tax receivable		19,533			10,027
Deferred taxes		23,354			15,514
Inventory		4,027			4,207
Other current assets		3,587			3,626
Total current assets		477,902			519,843
Oil and gas properties, full cost method of accounting:
Proved		7,358,370			7,244,466
Less: accumulated depreciation, depletion and amortization		(5,584,698	)		(5,510,166	)
Net proved oil and gas properties		1,773,672			1,734,300
Unevaluated		471,457			447,795
Other property and equipment, net		22,059			22,115
Fair value of hedging contracts		6,792			9,199
Other assets, net		50,512			43,179
Total assets	$	2,802,394		$	2,776,431
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	81,491		$	94,361
Undistributed oil and gas proceeds		28,904			23,414
Accrued interest		15,351			18,546
Fair value of hedging contracts		5,376			149
Asset retirement obligations		68,978			66,260
Other current liabilities		5,840			16,765
Total current liabilities		205,940			219,495
Long-term debt		917,267			914,126
Deferred taxes		336,108			310,830
Asset retirement obligations		412,706			422,042
Fair value of hedging contracts		2,997			1,530
Other long-term liabilities		33,853			36,275
Total liabilities		1,908,871			1,904,298
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value; authorized 100,000,000 shares; issued 48,683,813 and 48,392,552 shares, respectively		487			484
Treasury stock (16,582 shares, at cost)		(860	)		(860	)
Additional paid-in capital		1,385,445			1,386,475
Accumulated deficit		(502,041	)		(542,799	)
Accumulated other comprehensive income		10,492			28,833
Total stockholders’ equity		893,523			872,133
Total liabilities and stockholders’ equity	$	2,802,394		$	2,776,431

The accompanying notes are an integral part of this statement.

1

STONE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Operating revenue:
Oil production	$	186,925		$	201,758
Gas production		36,822			28,857
Natural gas liquids production		9,178			13,452
Other operational income		807			890
Total operating revenue		233,732			244,957
Operating expenses:
Lease operating expenses		53,044			44,480
Transportation, processing and gathering expenses		5,397			3,657
Production taxes		2,089			3,378
Depreciation, depletion and amortization		75,435			84,575
Accretion expense		8,263			8,266
Salaries, general and administrative expenses		13,952			13,705
Incentive compensation expense		1,431			1,442
Derivative expense, net		1,221			485
Other operational expenses		72			42
Total operating expenses		160,904			160,030
Income from operations		72,828			84,927
Other (income) expenses:
Interest expense		9,635			5,731
Interest income		(117	)		(31	)
Other income		(726	)		(420	)
Total other expenses		8,792			5,280
Net income before income taxes		64,036			79,647
Provision (benefit) for income taxes:
Current		(3,746	)		1,234
Deferred		27,024			27,439
Total income taxes		23,278			28,673
Net income	$	40,758		$	50,974
Basic earnings per share	$	0.82		$	1.04
Diluted earnings per share	$	0.82		$	1.04
Average shares outstanding		48,619			48,254
Average shares outstanding assuming dilution		48,657			48,299

The accompanying notes are an integral part of this statement.

2

STONE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Net income	$	40,758		$	50,974
Other comprehensive loss, net of tax effect: Adjustment for fair value accounting of derivatives		(18,341	)		(22,065	)
Comprehensive income	$	22,417		$	28,909

The accompanying notes are an integral part of this statement.

3

STONE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	40,758		$	50,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		75,435			84,575
Accretion expense		8,263			8,266
Deferred income tax provision		27,024			27,439
Settlement of asset retirement obligations		(14,880	)		(2,980	)
Non-cash stock compensation expense		2,296			1,750
Excess tax benefits		(104	)		(847	)
Non-cash derivative expense		1,385			1,342
Non-cash interest expense		4,041			1,573
Change in current income taxes		(9,402	)		(2,647	)
(Increase) decrease in accounts receivable		19,952			(22,111	)
Decrease in other current assets		40			35
Decrease in inventory		158			—
Increase (decrease) in accounts payable		2,004			(6,015	)
Decrease in other current liabilities		(8,942	)		(22,168	)
Other		(1,262	)		(254	)
Net cash provided by operating activities		146,766			118,932
Cash flows from investing activities:
Investment in oil and gas properties		(160,968	)		(106,469	)
Proceeds from sale of oil and gas properties, net of expenses		—			403
Sale of fixed assets		—			134
Investment in fixed and other assets		(599	)		(909	)
Net cash used in investing activities		(161,567	)		(106,841	)
Cash flows from financing activities:
Proceeds from bank borrowings		—			25,000
Repayments of bank borrowings		—			(70,000	)
Proceeds from issuance of senior convertible notes		—			300,000
Deferred financing costs of senior convertible notes		—			(8,855	)
Proceeds from Sold Warrants		—			40,170
Payments for Purchased Call Options		—			(70,830	)
Deferred financing costs		(11	)		—
Excess tax benefits		104			847
Net payments for share based compensation		(3,465	)		(3,033	)
Net cash (used in) provided by financing activities		(3,372	)		213,299
Net change in cash and cash equivalents		(18,173	)		225,390
Cash and cash equivalents, beginning of period		279,526			38,451
Cash and cash equivalents, end of period	$	261,353		$	263,841

The accompanying notes are an integral part of this statement.

4

STONE ENERGY CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Interim Financial Statements

The condensed consolidated financial statements of Stone Energy Corporation (“Stone”) and its subsidiaries as of March 31, 2013 and for the three-month periods ended March 31, 2013 and 2012 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The condensed consolidated balance sheet as of December 31, 2012 has been derived from the audited financial statements as of that date contained in our Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 Annual Report on Form 10-K”). The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations contained in our 2012 Annual Report on Form 10-K. The results of operations for the three-month period ended March 31, 2013 are not necessarily indicative of future financial results. Certain prior period amounts have been reclassified to conform to current period presentation.

Note 2 – Earnings Per Share

The following table sets forth the calculation of basic and diluted weighted average shares outstanding and earnings per share for the indicated periods.

	Three Months Ended March 31,
	2013			2012
	(in thousands, except per share data)
Income (numerator):
Basic:
Net income	$	40,758		$	50,974
Net income attributable to participating securities		(770	)		(877	)
Net income attributable to common stock—basic	$	39,988		$	50,097
Diluted:
Net income	$	40,758		$	50,974
Net income attributable to participating securities		(770	)		(876	)
Net income attributable to common stock—diluted	$	39,988		$	50,098
Weighted average shares (denominator):
Weighted average shares—basic		48,619			48,254
Diluted effect of stock options		38			45
Weighted average shares—diluted		48,657			48,299
Basic income per common share	$	0.82		$	1.04
Diluted income per common share	$	0.82		$	1.04

Stock options that were considered antidilutive because the exercise price of the options exceeded the average price of our common stock for the applicable period totaled approximately 347,000 and 372,000 shares during the three months ended March 31, 2013 and 2012, respectively. During the three months ended March 31, 2013 and 2012, respectively, approximately 291,000 and 232,000 shares of common stock were issued from authorized shares upon the vesting (lapse of forfeiture restrictions) of restricted stock by employees and nonemployee directors.

Because it is management’s stated intention to redeem the principal amount of our 1 ³/₄% Senior Convertible Notes due 2017 (the “2017 Convertible Notes”) (see Note 4 – Long-Term Debt) in cash, we have used the treasury method for determining potential dilution in the diluted earnings per share computation. Since the average price of our common stock was less than the effective conversion price for such notes during the reporting period, the 2017 Convertible Notes were not dilutive for such period. Additionally, since the average price of our common stock was less than the strike price of the Sold Warrants (as defined in Note 4 – Long-Term Debt) for the reporting period, such warrants were also not dilutive for such period.

5

Note 3 – Derivative Instruments and Hedging Activities

Our hedging strategy is designed to protect our near and intermediate term cash flow from future declines in oil and natural gas prices. This protection is essential to capital budget planning, which is sensitive to expenditures that must be committed to in advance such as rig contracts and the purchase of tubular goods. We enter into hedging transactions to secure a commodity price for a portion of future production that is acceptable at the time of the transaction. These hedges are designated as cash flow hedges upon entering into the contract. We do not enter into hedging transactions for trading purposes. We have no fair value hedges.

The nature of a derivative instrument must be evaluated to determine if it qualifies for hedge accounting treatment. If the instrument qualifies for hedge accounting treatment, it is recorded as either an asset or liability measured at fair value and subsequent changes in the derivative’s fair value are recognized in equity through other comprehensive income (loss), net of related taxes, to the extent the hedge is considered effective. Additionally, monthly settlements of effective hedges are reflected in revenue from oil and gas production and cash flows from operations. Instruments not qualifying for hedge accounting treatment are recorded in the balance sheet at fair value and changes in fair value are recognized in earnings through derivative expense (income). Typically, a small portion of our derivative contracts are determined to be ineffective. This is because oil and natural gas price changes in the markets in which we sell our products are not 100% correlative to changes in the underlying price basis indicative in the derivative contract. Monthly settlements of ineffective hedges are recognized in earnings through derivative expense (income) and cash flows from operations.

We have entered into fixed-price swaps with various counterparties for a portion of our expected 2013, 2014 and 2015 oil and natural gas production from the Gulf Coast Basin. Some of our fixed-price oil swap settlements are based on an average of the New York Mercantile Exchange (“NYMEX”) closing price for West Texas Intermediate during the entire calendar month, and some are based on the average of the Intercontinental Exchange closing price for Brent crude oil during the entire calendar month. Our fixed-price gas swap settlements are based on the NYMEX price for the last day of a respective contract month. Swaps typically provide for monthly payments by us if prices rise above the swap price or to us if prices fall below the swap price. Our fixed-price swap contracts are with The Toronto-Dominion Bank, Barclays Bank PLC, BNP Paribas, The Bank of Nova Scotia, Bank of America, Natixis and Regions Bank.

All of our derivative instruments at March 31, 2013 and December 31, 2012 were designated as effective cash flow hedges; however, during the three-month periods ended March 31, 2013 and 2012, certain of our derivative contracts were determined to be partially ineffective. The following tables disclose the location and fair value amounts of derivative instruments reported in our balance sheet at March 31, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at March 31, 2013
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	18.7	Current liabilities: Fair value of hedging contracts	($	5.4	)
	Long-term assets: Fair value of hedging contracts		6.8	Long-term liabilities: Fair value of hedging contracts		(3.0	)
		$	25.5		($	8.4	)

Fair Value of Derivative Instruments at December 31, 2012
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	39.7	Current liabilities: Fair value of hedging contracts	($	0.1	)
	Long-term assets: Fair value of hedging contracts		9.2	Long-term liabilities: Fair value of hedging contracts		(1.5	)
		$	48.9		($	1.6	)

6

The following table discloses the effect of derivative instruments in the statement of operations for the three-month periods ended March 31, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended March 31, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives (a)						Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (b)						Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013			2012			Location	2013		2012			Location	2013			2012
Commodity contracts	($	12.9	)	($	22.7	)	Operating revenue—oil/gas production	$	5.4	($	0.6	)	Derivative income (expense), net	($	1.2	)	($	0.5	)
Total	($	12.9	)	($	22.7	)		$	5.4	($	0.6	)		($	1.2	)	($	0.5	)

(a) Net of related tax effect of ($7.4) million and ($12.8) million for the three months ended March 31, 2013 and 2012, respectively.

(b) Net of related tax effect of ($3.1) million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively. For the three months ended March 31, 2013, effective hedging contracts increased oil revenue by $4.5 million and increased gas revenue by $4.0 million. For the three months ended March 31, 2012, effective hedging contracts decreased oil revenue by $5.8 million and increased gas revenue by $4.8 million.

At March 31, 2013, we had accumulated other comprehensive income of $10.5 million, net of tax, which related to the fair value of our swap contracts that were outstanding as of March 31, 2013. We believe that approximately $8.1 million of the accumulated other comprehensive income will be reclassified into earnings in the next 12 months.

Our derivative contracts are subject to netting arrangements. It is our policy to not offset our derivative contracts in presenting the fair value of these contracts as assets and liabilities in our consolidated balance sheet. The following presents the potential impact of the rights of offset associated with our recognized assets and liabilities at March 31, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	18.7		($	5.7	)	$	13.0
Long-term assets: Fair value of hedging contracts		6.8			(2.0	)		4.8
Current liabilities: Fair value of hedging contracts		(5.4	)		4.7			(0.7	)
Long-term liabilities: Fair value of hedging contracts		(3.0	)		3.0			—

7

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of May 2, 2013:

	Fixed-Price Swaps NYMEX (except where noted)
	Natural Gas					Oil
	Daily Volume (MMBtus/d)			Swap Price ($)		Daily  Volume (Bbls/d)			Swap Price ($)
2013		10,000			4.000		2,000	(a)		92.35
2013		10,000	(b)		4.050		1,000			92.80
2013		20,000	(a)		4.450		2,000	(c)		94.05
2013		10,000			5.270		1,000			94.45
2013		10,000			5.320		1,000			94.60
2013							1,000			97.15
2013							1,000			101.53
2013							1,000			103.00
2013							1,000			103.15
2013							1,000			104.25
2013							1,000			104.47
2013							1,000			104.50
2013							1,000	(d)		107.30
2014		10,000			4.000		1,000			90.06
2014		10,000			4.040		1,000			93.55
2014		10,000			4.105		1,000			94.00
2014		10,000			4.190		1,000			98.00
2014		10,000			4.250		1,000			98.30
2014		10,000			4.350		1,000			99.65
2014							1,000	(d)		103.30
2015		10,000			4.005		1,000			90.00
2015		10,000			4.220
2015		10,000			4.255

(a) July through December

(b) April through December

(c) January through June

(d) Brent oil contract

Note 4 – Long-Term Debt

Long-term debt consisted of the following at:

	March 31, 2013		December 31, 2012
	(in millions)
8 5/8% Senior Notes due 2017	$	375.0	$	375.0
1 3/4% Senior Convertible Notes due 2017		242.3		239.1
7 1/2% Senior Notes due 2022		300.0		300.0
Bank debt		—		—
Total long-term debt	$	917.3	$	914.1

Bank Debt

On April 26, 2011, we entered into an amended and restated revolving credit facility with commitments totaling $700 million (subject to borrowing base limitations) through a syndicated bank group, replacing our previous facility. Our bank credit facility matures on April 26, 2015. On April 30, 2013, the bank group reaffirmed our existing borrowing base at $400 million. As of March 31 and May 2, 2013, we had no outstanding borrowings under our bank credit facility and letters of credit totaling $21.0 million had been issued pursuant to the facility, leaving $379.0 million of availability under the facility.

8

The borrowing base under our bank credit facility is redetermined semi-annually, in May and November, by the lenders taking into consideration the estimated value of our oil and gas properties and those of our direct and indirect material subsidiaries in accordance with the lenders’ customary practices for oil and gas loans. In addition, we and the lenders each have discretion at any time, but not more than two additional times in any calendar year, to have the borrowing base redetermined. Our bank credit facility is guaranteed by our only material subsidiary, Stone Energy Offshore, L.L.C. (“Stone Offshore”). Our bank credit facility is collateralized by substantially all of Stone’s and Stone Offshore’s assets. Stone and Stone Offshore are required to mortgage, and grant a security interest in, their oil and gas reserves representing at least 80% of the discounted present value of the future net cash flows from their oil and gas reserves reviewed in determining the borrowing base. At Stone’s option, loans under our bank credit facility will bear interest at a rate based on the adjusted London Interbank Offering Rate (“Libor”) plus an applicable margin, or a rate based on the prime rate or federal funds rate plus an applicable margin. Our bank credit facility provides for optional and mandatory prepayments, affirmative and negative covenants, and interest coverage ratio and leverage ratio maintenance covenants. We were in compliance with all covenants as of March 31, 2013.

Senior Convertible Notes

On March 6, 2012, we issued in a private offering $300 million in aggregate principal amount of the 2017 Convertible Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The 2017 Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on an initial conversion rate of 23.4449 shares of our common stock per $1,000 principal amount of 2017 Convertible Notes, which corresponds to an initial conversion price of approximately $42.65 per share of our common stock. On March 28, 2013, our closing share price was $21.75. The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the indenture related to the 2017 Convertible Notes. Upon conversion, we will be obligated to pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. Prior to December 1, 2016, the 2017 Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date.

In connection with the offering, we entered into convertible note hedge transactions with respect to our common stock (the “Purchased Call Options”) with Barclays Capital Inc., acting as agent for Barclays Bank PLC, and Bank of America, N.A. (the “Dealers”). We paid an aggregate amount of approximately $70.8 million to the Dealers for the Purchased Call Options. The Purchased Call Options cover, subject to customary antidilution adjustments, approximately 7,033,470 shares of our common stock at a strike price that corresponds to the initial conversion price of the 2017 Convertible Notes, also subject to adjustment, and are exercisable upon conversion of the 2017 Convertible Notes.

We also entered into separate warrant transactions whereby, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, we sold to the Dealers warrants to acquire, subject to customary antidilution adjustments, approximately 7,033,470 shares of our common stock (the “Sold Warrants”) at a strike price of $55.91 per share of common stock. We received aggregate proceeds of approximately $40.1 million from the sale of the Sold Warrants to the Dealers. If, upon expiration of the Sold Warrants, the price per share of our common stock, as measured under the Sold Warrants, is greater than the strike price of the Sold Warrants, we will be required to issue, without further consideration, under each Sold Warrant a number of shares of our common stock with a value equal to the amount of such difference.

The estimated liability and equity components of this offering were recorded in accordance with Accounting Standards Codification (“ASC”) 470-20. The initial carrying amount of the liability component of $229.2 million was determined by measuring the fair value of a similar liability that does not have an associated equity component. An effective market interest rate of 7.51% was used in the fair value determination. The carrying amount of the equity component of $70.8 million was determined by deducting the fair value of the liability component from the initial proceeds from the 2017 Convertible Notes. Transaction costs of approximately $8.9 million were allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance and equity issuance costs, respectively. The cost of the convertible note hedge of $70.8 million and proceeds from the warrant transaction of $40.1 million were recorded as adjustments to equity.

As of March 31, 2013, the carrying amount of the liability component of the 2017 Convertible Notes was $242.3 million. During the three months ended March 31, 2013, we recognized $3.1 million of interest expense for the amortization of the discount and $0.3 million of interest expense for the amortization of deferred financing costs related to the 2017 Convertible Notes. During the three months ended March 31, 2013, we recognized $1.3 million of interest expense related to the contractual interest coupon on the 2017 Convertible Notes.

9

Senior Notes

During the three months ended March 31, 2013, we recognized $0.4 million of interest expense for the amortization of net deferred financing costs related to the 8 ⁵/₈% Senior Notes due 2017 (the “2017 Notes”). During the three months ended March 31, 2013, we recognized $8.1 million of interest expense related to the contractual interest coupon on the 2017 Notes.

During the three months ended March 31, 2013, we recognized $0.2 million of interest expense for the amortization of net deferred financing costs related to the 7 ¹/₂% Senior Notes due 2022 (the “2022 Notes”). During the three months ended March 31, 2013, we recognized $5.6 million of interest expense related to the contractual interest coupon on the 2022 Notes.

Note 5 – Asset Retirement Obligations

The change in our asset retirement obligations during the three months ended March 31, 2013 is set forth below:

	Three Months Ended March  31, 2013
	(in millions)
Asset retirement obligations as of the beginning of the period, including current portion	$	488.3
Liabilities settled		(14.9	)
Accretion expense		8.3
Asset retirement obligations as of the end of the period, including current portion	$	481.7

Note 6 – Acquisitions

In December 2012, we closed on the acquisition of an office building. The acquisition was accounted for according to the guidance provided in ASC 805, Business Combinations, which requires application of the acquisition method. This methodology requires us to record net assets acquired and consideration transferred at fair value. Differences between the net fair value of assets acquired and consideration transferred are recorded as goodwill or a bargain purchase gain. The building and land were recorded at fair value of $8.5 million. Consideration transferred in the transaction was $8.5 million in cash, with no goodwill or bargain purchase gain recorded.

On June 18, 2012, we completed the acquisition of a 25% working interest in the five block deep water Pompano field in Mississippi Canyon, an approximate 14% working interest in Mississippi Canyon Block 29 and a 10% working interest in certain aliquots of Mississippi Canyon Block 72. The acquisition was accounted for according to the guidance provided in ASC 805, Business Combinations. Consideration transferred in the transaction was $26.4 million in cash, with no goodwill or bargain purchase gain recorded. The following represents the allocation of the recorded value of net assets acquired in the transaction.

	(in millions)
Proved oil and gas properties.	$	39.2
Unevaluated oil and gas properties.		1.6
Asset retirement obligations.		(14.4	)
Total fair value of net assets.	$	26.4

Note 7 – Fair Value Measurements

U.S. Generally Accepted Accounting Principles establish a fair value hierarchy that has three levels based on the reliability of the inputs used to determine the fair value. These levels include: Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2013 and December 31, 2012, we held certain financial assets and liabilities that are required to be measured at fair value on a recurring basis, including our commodity derivative instruments and our investments in marketable securities. We utilize the services of an independent third party to assist us in valuing our derivative instruments. We used the income approach in determining the fair value of our derivative instruments utilizing a proprietary pricing model. The model accounts for our credit risk and the credit risk of our counterparties in the discount rate applied to estimated future cash inflows and outflows. Our swap contracts are included within the Level 2 fair value hierarchy. For a more detailed description of our derivative instruments, see Note 3 – Derivative Instruments and Hedging Activities. We used the market approach in determining the fair value of our investments in marketable securities, which are included within the Level 1 fair value hierarchy.

10

The following tables present our assets and liabilities that are measured at fair value on a recurring basis at March 31, 2013:

	Fair Value Measurements at March 31, 2013
Assets	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Marketable securities	$	13.9		$	13.9	$	—		$	—
Hedging contracts		25.5			—		25.5			—
Total	$	39.4		$	13.9	$	25.5		$	—
	Fair Value Measurements at March 31, 2013
Liabilities	Total			Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Hedging contracts	($	8.4	)	$	—	($	8.4	)	$	—
Total	($	8.4	)	$	—	($	8.4	)	$	—

The following tables present our assets and liabilities that are measured at fair value on a recurring basis at December 31, 2012:

	Fair Value Measurements at December 31, 2012
Assets	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Marketable securities	$	13.5		$	13.5	$	—		$	—
Hedging contracts		48.9			—		48.9			—
Total	$	62.4		$	13.5	$	48.9		$	—
	Fair Value Measurements at December 31, 2012
Liabilities	Total			Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Hedging contracts	($	1.6	)	$	—	($	1.6	)	$	—
Total	($	1.6	)	$	—	($	1.6	)	$	—

The fair value of cash and cash equivalents and our variable-rate bank debt approximated book value at March 31, 2013 and December 31, 2012. As of March 31, 2013 and December 31, 2012, the fair value of our 2017 Notes was approximately $403.1 million and $401.3 million, respectively. As of March 31, 2013 and December 31, 2012, the fair value of the liability component of our 2017 Convertible Notes was approximately $265.9 million and $249.6 million, respectively. As of March 31, 2013 and December 31, 2012, the fair value of our 2022 Notes was approximately $324.8 million and $314.3 million, respectively.

The fair value of our 2017 Notes and the fair value of our 2022 Notes were determined based upon quotes obtained from brokers, which represent Level 2 inputs. We applied fair value concepts in determining the liability component of our 2017 Convertible Notes (see Note 4 – Long-Term Debt) at inception, March 31, 2013 and December 31, 2012. The fair value of the liability was estimated using an income approach. The significant inputs in these determinations were market interest rates based on quotes obtained from brokers and represent Level 2 inputs.

11

Note 8 – Commitments and Contingencies

We are named as a defendant in certain lawsuits and are a party to certain regulatory proceedings arising in the ordinary course of business. We do not expect that these matters, individually or in the aggregate, will have a material adverse effect on our financial condition.

Franchise Tax Action. We have been served with several petitions filed by the Louisiana Department of Revenue (“LDR”) in Louisiana state court claiming additional franchise taxes due. In addition, we received preliminary assessments from the LDR for additional franchise taxes resulting from audits of Stone and other subsidiaries. These assessments all relate to the LDR’s assertion that sales of crude oil and natural gas from properties located on the Outer Continental Shelf (“OCS”), which are transported through the State of Louisiana, should be sourced to the State of Louisiana for purposes of computing the Louisiana franchise tax apportionment ratio. We disagree with these contentions and are defending ourselves against these claims. Total asserted claims plus estimated accrued interest amount to approximately $29.9 million. The franchise tax years 2010, 2011 and 2012 for Stone remain subject to examination, which potentially exposes us to additional estimated assessments of $2.5 million including accrued interest. We estimate the potential range of loss upon resolution of this matter to be between $0 and $32.4 million.

12

Note 9 – Guarantor Financial Statements

Stone Offshore is an unconditional guarantor (the “Guarantor Subsidiary”) of our 2017 Convertible Notes, our 2017 Notes and our 2022 Notes. Our other subsidiaries (the “Non-Guarantor Subsidiaries”) did not provide guarantees. We have two subsidiaries that do not own any assets at this time. One of our other non-guarantor subsidiaries was merged into Stone Offshore on September 6, 2012. The following presents unaudited condensed consolidating financial information as of March 31, 2013 and December 31, 2012 and for the three-month periods ended March 31, 2013 and 2012 on an issuer (parent company), guarantor subsidiary, non-guarantor subsidiaries and consolidated basis. Elimination entries presented are necessary to combine the entities.

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	210,189		$	51,164		$	—	$	—		$	261,353
Accounts receivable		48,545			221,703			—		(122,912	)		147,336
Fair value of hedging contracts		—			18,712			—		—			18,712
Current income tax receivable		19,533			—			—		—			19,533
Deferred taxes *		3,387			19,967			—		—			23,354
Inventory		3,744			283			—		—			4,027
Other current assets		3,587			—			—		—			3,587
Total current assets		288,985			311,829			—		(122,912	)		477,902
Oil and gas properties, full cost method:
Proved		1,078,367			6,280,003			—		—			7,358,370
Less: accumulated DD&A		(379,399	)		(5,205,299	)		—		—			(5,584,698	)
Net proved oil and gas properties		698,968			1,074,704			—		—			1,773,672
Unevaluated		270,373			201,084			—		—			471,457
Other property and equipment, net		22,059			—			—		—			22,059
Fair value of hedging contracts		—			6,792			—		—			6,792
Other assets, net		48,951			1,561			—		—			50,512
Investment in subsidiary		774,817			—			—		(774,817	)		—
Total assets	$	2,104,153		$	1,595,970		$	—	($	897,729	)	$	2,802,394
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	182,210		$	22,193		$	—	($	122,912	)	$	81,491
Undistributed oil and gas proceeds		16,580			12,324			—		—			28,904
Accrued interest		15,351			—			—		—			15,351
Fair value of hedging contracts		—			5,376			—		—			5,376
Asset retirement obligations		—			68,978			—		—			68,978
Other current liabilities		5,522			318			—		—			5,840
Total current liabilities		219,663			109,189			—		(122,912	)		205,940
Long-term debt		917,267			—			—		—			917,267
Deferred taxes *		40,988			295,120			—		—			336,108
Asset retirement obligations		5,572			407,134			—		—			412,706
Fair value of hedging contracts		—			2,997			—		—			2,997
Other long-term liabilities		27,140			6,713			—		—			33,853
Total liabilities		1,210,630			821,153			—		(122,912	)		1,908,871
Commitments and contingencies Stockholders’ equity:
Common stock		487			—			—		—			487
Treasury stock		(860	)		—			—		—			(860	)
Additional paid-in capital		1,385,445			1,496,509			—		(1,496,509	)		1,385,445
Accumulated deficit		(502,041	)		(732,184	)		—		732,184			(502,041	)
Accumulated other comprehensive income		10,492			10,492			—		(10,492	)		10,492
Total stockholders’ equity		893,523			774,817			—		(774,817	)		893,523
Total liabilities and stockholders’ equity	$	2,104,153		$	1,595,970		$	—	($	897,729	)	$	2,802,394

* Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside.

13

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	228,398		$	51,128		$	—	$	—		$	279,526
Accounts receivable		59,213			108,075			—		—			167,288
Fair value of hedging contracts		—			39,655			—		—			39,655
Current income tax receivable		10,027			—			—		—			10,027
Deferred taxes *		5,947			9,567			—		—			15,514
Inventory		3,924			283			—		—			4,207
Other current assets		3,626			—			—		—			3,626
Total current assets		311,135			208,708			—		—			519,843
Oil and gas properties, full cost method:
Proved		1,004,808			6,239,658			—		—			7,244,466
Less: accumulated DD&A		(370,111	)		(5,140,055	)		—		—			(5,510,166	)
Net proved oil and gas properties		634,697			1,099,603			—		—			1,734,300
Unevaluated		254,757			193,038			—		—			447,795
Other property and equipment, net		22,115			—			—		—			22,115
Fair value of hedging contracts		—			9,199			—		—			9,199
Other assets, net		41,679			1,500			—		—			43,179
Investment in subsidiary		736,331			—			—		(736,331	)		—
Total assets	$	2,000,714		$	1,512,048		$	—	($	736,331	)	$	2,776,431
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	74,503		$	19,858		$	—	$	—		$	94,361
Undistributed oil and gas proceeds		21,841			1,573			—		—			23,414
Accrued interest		18,546			—			—		—			18,546
Fair value of hedging contracts		—			149			—		—			149
Asset retirement obligations		—			66,260			—		—			66,260
Other current liabilities		16,765			—			—		—			16,765
Total current liabilities		131,655			87,840			—		—			219,495
Long-term debt		914,126			—			—		—			914,126
Deferred taxes *		47,758			263,072			—		—			310,830
Asset retirement obligations		5,479			416,563			—		—			422,042
Fair value of hedging contracts		—			1,530			—		—			1,530
Other long-term liabilities		29,563			6,712			—		—			36,275
Total liabilities		1,128,581			775,717			—		—			1,904,298
Commitments and contingencies Stockholders’ equity:
Common stock		484			—			—		—			484
Treasury stock		(860	)		—			—		—			(860	)
Additional paid-in capital		1,386,475			1,496,510			—		(1,496,510	)		1,386,475
Accumulated deficit		(542,799	)		(789,012	)		—		789,012			(542,799	)
Accumulated other comprehensive income		28,833			28,833			—		(28,833	)		28,833
Total stockholders’ equity		872,133			736,331			—		(736,331	)		872,133
Total liabilities and stockholders’ equity	$	2,000,714		$	1,512,048		$	—	($	736,331	)	$	2,776,431

* Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside.

14

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Operating revenue:
Oil production	$	5,343		$	181,582		$	—	$	—		$	186,925
Gas production		7,198			29,624			—		—			36,822
Natural gas liquids production		2,299			6,879			—		—			9,178
Other operational income		649			158			—		—			807
Total operating revenue		15,489			218,243			—		—			233,732
Operating expenses:
Lease operating expenses		2,291			50,753			—		—			53,044
Transportation, processing and gathering expenses		2,052			3,345			—		—			5,397
Production taxes		867			1,222			—		—			2,089
Depreciation, depletion, amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Salaries, general and administrative		13,948			4			—		—			13,952
Incentive compensation expense		1,431			—			—		—			1,431
Derivative expense, net		—			1,221			—		—			1,221
Other operational expenses		50			22			—		—			72
Total operating expenses		30,923			129,981			—		—			160,904
Income (loss) from operations		(15,434	)		88,262			—		—			72,828
Other (income) expenses:
Interest expense		9,627			8			—		—			9,635
Interest income		(80	)		(37	)		—		—			(117	)
Other income		(224	)		(502	)		—		—			(726	)
Income from investment in subsidiaries		(56,828	)		—			—		56,828			—
Total other (income) expenses		(47,505	)		(531	)		—		56,828			8,792
Income before taxes		32,071			88,793			—		(56,828	)		64,036
Provision (benefit) for income taxes:
Current		(3,746	)		—			—		—			(3,746	)
Deferred		(4,941	)		31,965			—		—			27,024
Total income taxes		(8,687	)		31,965			—		—			23,278
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Comprehensive income	$	22,417		$	56,828		$	—	($	56,828	)	$	22,417

15

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,234		$	195,524		$	—		$	—		$	201,758
Gas production		5,631			23,226			—			—			28,857
Natural gas liquids production		3,864			9,588			—			—			13,452
Other operational income		694			63			133			—			890
Total operating revenue		16,423			228,401			133			—			244,957
Operating expenses:
Lease operating expenses		4,904			39,387			189			—			44,480
Transportation, processing and gathering expenses		2,488			1,169			—			—			3,657
Production taxes		1,163			2,215			—			—			3,378
Depreciation, depletion, amortization		11,477			73,000			98			—			84,575
Accretion expense		148			8,032			86			—			8,266
Salaries, general and administrative		12,654			1,051			—			—			13,705
Incentive compensation expense		1,442			—			—			—			1,442
Derivative expense, net		—			485			—			—			485
Other operational expenses		42			—			—						42
Total operating expenses		34,318			125,339			373			—			160,030
Income (loss) from operations		(17,895	)		103,062			(240	)		—			84,927
Other (income) expenses:
Interest expense		5,846			(115	)		—			—			5,731
Interest income		(30	)		(1	)		—			—			(31	)
Other income		(19	)		(401	)		—			—			(420	)
(Income) loss from investment in subsidiaries		(66,137	)		239			—			65,898			—
Total other (income) expenses		(60,340	)		(278	)		—			65,898			5,280
Income (loss) before taxes		42,445			103,340			(240	)		(65,898	)		79,647
Provision (benefit) for income taxes:
Current		1,234			—			—			—			1,234
Deferred		(9,763	)		37,202			—			—			27,439
Total income taxes		(8,529	)		37,202			—			—			28,673
Net income (loss)	$	50,974		$	66,138		($	240	)	($	65,898	)	$	50,974
Comprehensive income (loss)	$	28,909		$	66,138		($	240	)	($	65,898	)	$	28,909

16

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Deferred income tax provision (benefit)		(4,941	)		31,965			—		—			27,024
Settlement of asset retirement obligations		—			(14,880	)		—		—			(14,880	)
Non-cash stock compensation expense		2,296			—			—		—			2,296
Excess tax benefits		(104	)		—			—		—			(104	)
Non-cash derivative expense		—			1,385			—		—			1,385
Non-cash interest expense		4,041			—			—		—			4,041
Non-cash income from investment in subsidiaries		(56,828	)		—					56,828			—
Change in current income taxes		(9,402	)		—			—		—			(9,402	)
Change in intercompany receivables/payables		122,912			(122,912	)		—		—			—
Decrease in accounts receivable		10,668			9,284			—		—			19,952
Decrease in other current assets		40			—			—		—			40
Decrease in inventory		158			—			—		—			158
Increase (decrease) in accounts payable		(1,890	)		3,894			—		—			2,004
Increase (decrease) in other current liabilities		(20,011	)		11,069			—		—			(8,942	)
Other		(761	)		(501	)		—		—			(1,262	)
Net cash provided by operating activities		97,220			49,546			—		—			146,766
Cash flows from investing activities:
Investment in oil and gas properties		(111,458	)		(49,510	)		—		—			(160,968	)
Investment in fixed and other assets		(599	)		—			—		—			(599	)
Net cash used in investing activities		(112,057	)		(49,510	)		—		—			(161,567	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—		—			(11	)
Excess tax benefits		104			—			—		—			104
Net payments for share based compensation		(3,465	)		—			—		—			(3,465	)
Net cash used in financing activities		(3,372	)		—			—		—			(3,372	)
Net change in cash and cash equivalents		(18,209	)		36			—		—			(18,173	)
Cash and cash equivalents, beginning of period		228,398			51,128			—		—			279,526
Cash and cash equivalents, end of period	$	210,189		$	51,164		$	—	$	—		$	261,353

17

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	50,974		$	66,138		($	240	)	($	65,898	)	$	50,974
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		11,477			73,000			98			—			84,575
Accretion expense		148			8,032			86			—			8,266
Deferred income tax provision (benefit)		(9,763	)		37,202			—			—			27,439
Settlement of asset retirement obligations		—			(2,980	)		—			—			(2,980	)
Non-cash stock compensation expense		1,750			—			—			—			1,750
Excess tax benefits		(847	)		—			—			—			(847	)
Non-cash derivative expense		—			1,342									1,342
Non-cash interest expense		1,573			—			—			—			1,573
Non-cash income from investment in subsidiaries		(65,737	)		(161	)		—			65,898			—
Change in current income taxes		(2,647	)		—			—			—			(2,647	)
Change in intercompany receivables/payables		18,655			(18,445	)		(210	)		—			—
(Increase) decrease in accounts receivable		(983	)		(21,226	)		98			—			(22,111	)
Decrease in other current assets		35			—			—			—			35
Increase (decrease) in accounts payable		(25	)		(6,157	)		167			—			(6,015	)
Increase (decrease) in other current liabilities		(23,155	)		987			—			—			(22,168	)
Other		(254	)		—			—			—			(254	)
Net cash provided by (used in) operating activities		(18,799	)		137,732			(1	)		—			118,932
Cash flows from investing activities:
Investment in oil and gas properties		(8,767	)		(97,703	)		1			—			(106,469	)
Proceeds from sale of oil and gas properties, net of expenses		403			—			—			—			403
Sale of fixed assets		134			—			—			—			134
Investment in fixed and other assets		(909	)		—			—			—			(909	)
Net cash (used in) provided by investing activities		(9,139	)		(97,703	)		1			—			(106,841	)
Cash flows from financing activities:
Proceeds from bank borrowings		25,000			—			—			—			25,000
Repayments of bank borrowings		(70,000	)		—			—			—			(70,000	)
Proceeds from issuance of senior convertible notes		300,000			—			—			—			300,000
Deferred financing costs of senior convertible notes		(8,855	)		—			—			—			(8,855	)
Proceeds from Sold Warrants		40,170			—			—			—			40,170
Payments for Purchased Call Options		(70,830	)		—			—			—			(70,830	)
Excess tax benefits		847			—			—			—			847
Net payments for share based compensation		(3,033	)		—			—			—			(3,033	)
Net cash provided by financing activities		213,299			—			—			—			213,299
Net change in cash and cash equivalents		185,361			40,029			—			—			225,390
Cash and cash equivalents, beginning of period		37,389			926			136			—			38,451
Cash and cash equivalents, end of period	$	222,750		$	40,955		$	136		$	—		$	263,841

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The information in this Quarterly Report on Form 10-Q and other publicly available documents include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical or current facts, that address activities, events, outcomes and other matters that we plan, expect, intend, assume, believe, budget, predict, forecast, project, estimate or anticipate (and other similar expressions) will, should or may occur in the future are forward-looking statements. These forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements as described in our 2012 Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q.

Forward-looking statements appear in a number of places and include statements with respect to, among other things:

• any expected results or benefits associated with our acquisitions;

• expected results from risked weighted drilling success;

• estimates of our future oil and natural gas production, including estimates of any increases in oil and gas production;

• planned capital expenditures and the availability of capital resources to fund capital expenditures;

• our outlook on oil and gas prices;

• estimates of our oil and gas reserves;

• any estimates of future earnings growth;

• the impact of political and regulatory developments;

• our outlook on the resolution of pending litigation and government inquiry;

• estimates of the impact of new accounting pronouncements on earnings in future periods;

• our future financial condition or results of operations and our future revenues and expenses;

• our access to capital and our anticipated liquidity;

• estimates of future income taxes; and

• our business strategy and other plans and objectives for future operations.

We caution you that these forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, incident to the exploration for and development, production and marketing of oil and natural gas. These risks include, among other things:

• commodity price volatility;

• consequences of a catastrophic event like the Deepwater Horizon oil spill;

• domestic and worldwide economic conditions;

• the availability of capital on economic terms to fund our capital expenditures and acquisitions;

• our level of indebtedness;

• declines in the value of our oil and gas properties resulting in a decrease in our borrowing base under our bank credit facility and ceiling test write-downs and impairments;

• our ability to replace and sustain production;

• the impact of a financial crisis on our business operations, financial condition and ability to raise capital;

• the ability of financial counterparties to perform or fulfill their obligations under existing agreements;

• third-party interruption of sales to market;

• inflation;

• lack of availability and cost of goods and services;

• regulatory and environmental risks associated with drilling and production activities;

• drilling and other operating risks;

• unsuccessful exploration and development drilling activities;

• hurricanes and other weather conditions;

• adverse effects of changes in applicable tax, environmental, derivatives and other regulatory legislation, including changes affecting our offshore and Appalachian operations;

• uncertainty inherent in estimating proved oil and natural gas reserves and in projecting future rates of production and timing of development expenditures; and

• other risks described in our 2012 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.

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Should one or more of the risks or uncertainties described above, in our 2012 Annual Report on Form 10-K or in our Quarterly Reports on Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We specifically disclaim all responsibility to publicly update any information contained in a forward-looking statement or any forward-looking statement in its entirety and therefore disclaim any resulting liability for potentially related damages. All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contained in this Quarterly Report on Form 10-Q should be read in conjunction with the MD&A contained in our 2012 Annual Report on Form 10-K.

Overview

We are an independent oil and gas company engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. We have been operating in the Gulf Coast Basin since our incorporation in 1993 and have established a technical and operational expertise in this area. We have expanded our reserve base outside of the conventional shelf of the Gulf of Mexico (“GOM”) and into the more prolific reserve basins of the GOM deep water and Gulf Coast deep gas, as well as onshore oil and gas shale opportunities, including the Marcellus Shale in Appalachia.

Critical Accounting Estimates

Our 2012 Annual Report on Form 10-K describes the accounting estimates that we believe are critical to the reporting of our financial position and operating results and that require management’s most difficult, subjective or complex judgments. Our most significant estimates are:

• remaining proved oil and gas reserve volumes and the timing of their production;

• estimated costs to develop and produce proved oil and gas reserves;

• accruals of exploration costs, development costs, operating costs and production revenue;

• timing and future costs to abandon our oil and gas properties;

• the effectiveness and estimated fair value of derivative positions;

• classification of unevaluated property costs;

• capitalized general and administrative costs and interest;

• insurance recoveries related to hurricanes and other events;

• estimates of fair value in business combinations;

• current income taxes; and

• contingencies.

This Quarterly Report on Form 10-Q should be read together with the discussion contained in our 2012 Annual Report on Form 10-K regarding these critical accounting policies.

Other Factors Affecting Our Business and Financial Results

In addition to the matters discussed above, our business, financial condition and results of operations are affected by a number of other factors. This Quarterly Report on Form 10-Q should be read in conjunction with the discussion in Part I, Item 1A, of our 2012 Annual Report on Form 10-K regarding these other risk factors and in this report under Part II, Item 1A. “Risk Factors.”

Known Trends and Uncertainties

Hurricanes – Since the majority of our production originates in the GOM, we are particularly vulnerable to the effects of hurricanes on production. Additionally, affordable insurance coverage for property damage to our facilities for hurricanes has been difficult to obtain for some time. We have assumed all hurricane related risk due to these rising insurance rates. Significant hurricane impacts could include reductions and/or deferrals of future oil and natural gas production and revenues, increased lease operating expenses for evacuations and repairs and possible acceleration of plugging and abandonment costs.

Louisiana Franchise Taxes – We have been involved in litigation with the State of Louisiana over the proper computation of franchise taxes allocable to the state. This litigation relates to the state’s position that sales of crude oil and natural gas from properties located on the OCS, which are transported through the State of Louisiana, should be sourced to Louisiana for purposes of computing franchise taxes. We disagree with the state’s position. However, if the state’s position were to be upheld, we could incur additional expenses for alleged underpaid franchise taxes in prior years and higher franchise tax expense in future years. See Part II, Item 1. Legal Proceedings.

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Deep Water Operations – With our acquisition of interests in the Pompano field, we are now operating two significant properties in the deep water of the GOM. Operations in the deep water can result in increased operational risks as has been demonstrated by the Deepwater Horizon disaster in 2010. Despite technological advances since this disaster, liabilities for environmental losses, personal injury and loss of life and significant regulatory fines in the event of a disaster could be well in excess of insured amounts and result in significant current losses on our statement of operations as well as going concern issues.

Earnings Per Share – On March 6, 2012, we issued $300 million of 2017 Convertible Notes. These notes are convertible into cash, shares of our common stock or a combination thereof at our election. Current accounting standards require us to use the treasury method for determining potential dilution in our diluted earnings per share computation since it is management’s intention to settle the principal in cash. However, if due to changes in facts and circumstances beyond our control such intention were to change, or it becomes probable that we will be unable to settle the principal amount of the notes in cash, we could be required to change our methodology for determining fully diluted earnings per share to the if-converted method. The if-converted method would result in a substantial dilutive effect on diluted earnings per share when compared to the treasury method.

Liquidity and Capital Resources

At May 2, 2013, we had $379 million of availability under our bank credit facility and cash on hand of approximately $235 million. Our capital expenditure budget for 2013 has been set at $650 million, which excludes material acquisitions and capitalized salaries, general and administrative expenses and interest. Based on our outlook of commodity prices and our estimated production, we expect our 2013 capital expenditures to exceed our cash flow from operating activities. We intend to finance our remaining capital expenditure budget with cash on hand and cash flow from operations.

Cash Flow and Working Capital. Net cash from operating activities totaled $146.8 million during the three months ended March 31, 2013 compared to $118.9 million in the comparable period in 2012.

Net cash used in investing activities totaled $161.6 million and $106.8 million during the three months ended March 31, 2013 and 2012, respectively, which primarily represents our investment in oil and natural gas properties.

Net cash used in financing activities totaled $3.4 million for the three months ended March 31, 2013, which primarily represents net payments for share based compensation. Net cash provided by financing activities totaled $213.3 million for the three months ended March 31, 2012, which primarily represents $291.1 million of net proceeds from the issuance of our 2017 Convertible Notes and $40.1 million of proceeds from the Sold Warrants, partially offset by $70.8 million for the cost of the Purchased Call Options. Additionally, we had $25.0 million of borrowings and $70.0 million of repayments of borrowings under our bank credit facility during the three months ended March 31, 2012.

We had working capital at March 31, 2013 of $272.0 million. Included in working capital at March 31, 2013 is a portion of the proceeds received from the issuance of the 2017 Convertible Notes and the 2022 Notes.

Capital Expenditures. During the three months ended March 31, 2013, additions to oil and gas property costs of $137.6 million included $10.9 million of lease and property acquisition costs, $6.6 million of capitalized salaries, general and administrative expenses (inclusive of incentive compensation) and $10.0 million of capitalized interest. These investments were financed with cash on hand and cash flow from operations.

Bank Credit Facility. On April 26, 2011, we entered into an amended and restated revolving credit facility totaling $700 million through a syndicated bank group, replacing our previous facility. Our bank credit facility matures on April 26, 2015. On April 30, 2013, the bank group reaffirmed our existing borrowing base at $400 million. As of March 31 and May 2, 2013, we had no outstanding borrowings under our bank credit facility and letters of credit totaling $21.0 million had been issued pursuant to the bank credit facility, leaving $379.0 million of availability under the facility. Our bank credit facility is guaranteed by our only material subsidiary, Stone Offshore.

The borrowing base under our bank credit facility is redetermined semi-annually, in May and November, by the lenders taking into consideration the estimated value of our oil and gas properties and those of our direct and indirect material subsidiaries in accordance with the lenders’ customary practices for oil and gas loans. In addition, we and the lenders each have discretion at any time, but not more than two additional times in any calendar year, to have the borrowing base redetermined. Our bank credit facility is collateralized by substantially all of Stone’s and Stone Offshore’s assets. Stone and Stone Offshore are required to mortgage, and grant a security interest in, their oil and gas reserves representing at least 80% of the discounted present value of the future net cash flows from their oil and gas reserves reviewed in determining the borrowing base. At our option, loans under

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the bank credit facility will bear interest at a rate based on the Libor Rate plus an applicable margin, or a rate based on the prime rate or federal funds rate plus an applicable margin. Our bank credit facility provides for optional and mandatory prepayments, affirmative and negative covenants, and interest coverage ratio and leverage ratio maintenance covenants. We were in compliance with all covenants as of March 31, 2013.

Contractual Obligations and Other Commitments

In addition to our significant contractual obligations and commitments summarized in our 2012 Annual Report on Form 10-K, in April 2013, we contracted two deep water drilling rigs for minimum total commitments of approximately $123.5 million to be incurred during the second half of 2013 and the first half of 2014.

Results of Operations

The following table sets forth certain information with respect to our oil and gas operations.

	Three Months Ended March 31,
	2013		2012		Variance			% Change
Production:
Oil (MBbls)		1,667		1,862		(195	)		(10	%)
Natural gas (MMcf)		10,358		9,994		364			4	%
Natural gas liquids (“NGLs”) (MBbls)		216		200		16			8	%
Oil, natural gas and NGLs (MMcfe)		21,656		22,366		(710	)		(3	%)
Revenue data (in thousands) (a):
Oil revenue	$	186,925	$	201,758	($	14,833	)		(7	%)
Natural gas revenue		36,822		28,857		7,965			28	%
Natural gas liquids revenue		9,178		13,452		(4,274	)		(32	%)
Total oil, natural gas and NGL revenue	$	232,925	$	244,067	($	11,142	)		(5	%)
Average prices (a):
Oil (per Bbl)	$	112.13	$	108.36	$	3.77			3	%
Natural gas (per Mcf)		3.55		2.89		0.66			23	%
Natural gas liquids (per Bbl)		42.49		67.26		(24.77	)		(37	%)
Oil, natural gas and NGLs (per Mcfe)		10.76		10.91		(0.15	)		(1	%)
Expenses (per Mcfe):
Lease operating expenses	$	2.45	$	1.99	$	0.46			23	%
Salaries, general and administrative expenses (b)		0.64		0.61		0.03			5	%
DD&A expense on oil and gas properties		3.44		3.75		(0.31	)		(8	%)

(a) Includes the cash settlement of effective hedging contracts.

(b) Exclusive of incentive compensation expense.

Net Income. During the three months ended March 31, 2013, we reported net income totaling $40.8 million, or $0.82 per share, compared to net income for the three months ended March 31, 2012 of $51.0 million, or $1.04 per share. All per share amounts are on a diluted basis.

The variance in the three-month periods’ results was due to the following components:

Production. During the three months ended March 31, 2013, total production volumes decreased to 21.7 Bcfe compared to 22.4 Bcfe produced during the comparable 2012 period, representing a 3% decrease. Oil production during the three months ended March 31, 2013 totaled approximately 1,667,000 Bbls compared to 1,862,000 Bbls produced during the three months ended March 31, 2012; natural gas production totaled 10.4 Bcf during the three months ended March 31, 2013 compared to 10.0 Bcf during the comparable 2012 period; and NGL production during the three months ended March 31, 2013 totaled approximately 216,000 Bbls compared to 200,000 Bbls produced during the comparable period of 2012.

During the three months ended March 31, 2013, production was negatively impacted by third-party pipeline failures in Appalachia. Partially offsetting this decrease in production was a non-recurring production adjustment relating to the retroactive grant of royalty relief volumes of approximately 9 MMcfe per day with respect to 2012 production at two of our deep water fields.

Prices. Prices realized during the three months ended March 31, 2013 averaged $112.13 per Bbl of oil, $3.55 per Mcf of natural gas and $42.49 per Bbl of NGLs, or 1% lower, on an Mcfe basis, than average realized prices of $108.36 per Bbl of oil, $2.89 per Mcf of natural gas and $67.26 per Bbl of NGLs during the comparable 2012 period. All unit pricing amounts include the cash settlement of effective hedging contracts.

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We enter into various hedging contracts in order to reduce our exposure to the possibility of declining oil and gas prices. Our effective hedging transactions increased our average realized natural gas price by $0.38 per Mcf and increased our average realized oil price by $2.72 per Bbl during the three months ended March 31, 2013. During the three months ended March 31, 2012, our effective hedging transactions increased our average realized natural gas price by $0.48 per Mcf and decreased our average realized oil price by $3.13 per Bbl.

Revenue. Oil, natural gas and NGL revenue was $232.9 million during the three months ended March 31, 2013, compared to $244.1 million during the comparable period of 2012. The decrease was attributable to a 3% decrease in production quantities on a gas equivalent basis and a 1% decrease in average realized prices.

Expenses. Lease operating expenses during the three months ended March 31, 2013 and 2012 totaled $53.0 million and $44.5 million, respectively. On a unit of production basis, lease operating expenses were $2.45 per Mcfe and $1.99 per Mcfe for the three months ended March 31, 2013 and 2012, respectively. The increase in lease operating expenses during the three months ended March 31, 2013 was attributable to our increased working interest in the Pompano field acquired in June 2012 and seasonal major maintenance projects.

Depreciation, depletion and amortization (“DD&A”) expense on oil and gas properties for the three months ended March 31, 2013 totaled $74.5 million, or $3.44 per Mcfe, compared to $83.8 million, or $3.75 per Mcfe, during the comparable period of 2012.

Salaries, general and administrative (“SG&A”) expenses (exclusive of incentive compensation) for the three months ended March 31, 2013 were $14.0 million compared to $13.7 million for the three months ended March 31, 2012. The increase was primarily the result of increased staffing and compensation adjustments (including stock based compensation). Partially offsetting this increase was a reimbursement of $1.6 million of legal fees relating to the settlement of litigation in prior periods.

For each of the three month periods ended March 31, 2013 and 2012, incentive compensation expense totaled $1.4 million. These amounts relate to the accrual of estimated incentive compensation bonuses calculated based on the projected achievement of certain strategic objectives for each fiscal year.

Interest expense for the three months ended March 31, 2013 totaled $9.6 million, net of $10.0 million of capitalized interest, compared to interest expense of $5.7 million, net of $8.7 million of capitalized interest, during the comparable 2012 period. The increase in interest expense was primarily the result of interest associated with the 2022 Notes issued in November 2012 and the 2017 Convertible Notes issued in March 2012. Partially offsetting these increases was a decrease in interest expense as a result of the redemption in December 2012 of our 6 ³/₄% Senior Subordinated Notes due 2014.

Off Balance Sheet Arrangements

None.

Recent Accounting Developments

None.

Defined Terms

Oil, condensate and NGLs are stated in barrels (“Bbls”) or thousand barrels (“MBbls”). Natural gas is stated herein in billion cubic feet (“Bcf”), million cubic feet (“MMcf”) or thousand cubic feet (“Mcf”). Oil, condensate and NGLs are converted to natural gas at a ratio of one barrel of liquids per six Mcf of gas. Bcfe, MMcfe, and Mcfe represent one billion cubic feet, one million cubic feet and one thousand cubic feet of gas equivalent, respectively. MMBtu represents one million British Thermal Units and BBtu represents one billion British Thermal Units. An active property is an oil and gas property with existing production. A primary term lease is an oil and gas property with no existing production, in which we have a specific time frame to establish production without losing the rights to explore the property. Liquidity is defined as the ability to obtain cash quickly either through the conversion of assets or incurrence of liabilities.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

Our major market risk exposure continues to be the pricing applicable to our oil and natural gas production. Our revenues, profitability and future rate of growth depend substantially upon the market prices of oil and natural gas, which fluctuate widely. Oil and natural gas price declines and volatility could adversely affect our revenues, cash flows and profitability. Price volatility is expected to continue. In order to manage our exposure to oil and natural gas price declines, we occasionally enter into oil and natural gas price hedging arrangements to secure a price for a portion of our expected future production.

Our hedging policy provides that not more than 50% of our estimated production quantities can be hedged for any given year without the consent of the Board of Directors. We believe our current hedging positions have hedged approximately 49% of our estimated 2013 production from estimated proved reserves, 41% of our estimated 2014 production from estimated proved reserves, and 17% of our estimated 2015 production from estimated proved reserves. See Part I, Item 1. Financial Statements—Note 3 – Derivative Instruments and Hedging Activities for a detailed discussion of hedges in place to manage our exposure to oil and natural gas price declines.

Since the filing of our 2012 Annual Report on Form 10-K, there have been no material changes in reported market risk as it relates to commodity prices.

Interest Rate Risk

We had total debt outstanding of $917.3 million at March 31, 2013, all of which bears interest at fixed rates. The $917.3 million of fixed-rate debt is comprised of $242.3 million ($300 million face value) of 1 ³/₄% Senior Convertible Notes due 2017, $375 million of 8 ⁵/₈% Senior Notes due 2017 and $300 million of 7 ¹/₂% Senior Notes due 2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of March 31, 2013 at the reasonable assurance level.

Changes in Internal Controls Over Financial Reporting

There has not been any change in our internal control over financial reporting that occurred during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On December 30, 2004, we were served with two petitions (civil action numbers 2004-6227 and 2004-6228) filed by the LDR in the 15th Judicial District Court (Parish of Lafayette, Louisiana) claiming additional franchise taxes due. In one case, the LDR is seeking additional franchise taxes from Stone in the amount of $640,000, plus accrued interest of $352,000 (calculated through December 15, 2004), for the franchise tax year 2001. In the other case, the LDR is seeking additional franchise taxes from Stone (as successor to Basin Exploration, Inc.) in the amount of $274,000, plus accrued interest of $159,000 (calculated through December 15, 2004), for the franchise tax years 1999, 2000 and 2001. On December 29, 2005, the LDR filed another petition (civil action number 2005-6524) in the 15th Judicial District Court claiming additional franchise taxes due for the

24

franchise tax years 2002 and 2003 in the amount of $2.6 million, plus accrued interest of $1.2 million (calculated through December 15, 2005). Also, on January 2, 2008, we were served with a petition (civil action number 2007-6754) claiming $1.5 million of additional franchise taxes due for the 2004 franchise tax year, plus accrued interest of $800,000 (calculated through November 30, 2007). Further, on January 7, 2009, we were served with a petition (civil action number 2008-7193) claiming additional franchise taxes due for the franchise tax years 2005 and 2006 in the amount of $4.0 million, plus accrued interest of $1.7 million (calculated through October 21, 2008). In addition, we have received proposed assessments from the LDR for additional franchise taxes in the amount of $8.1 million resulting from audits of Stone and our subsidiaries. These assessments all relate to the LDR’s assertion that sales of crude oil and natural gas from properties located on the OCS, which are transported through the State of Louisiana, should be sourced to the State of Louisiana for purposes of computing the Louisiana franchise tax apportionment ratio. We disagree with these contentions and intend to vigorously defend ourselves against these claims. The franchise tax years 2010, 2011 and 2012 for Stone remain subject to examination.

In October 2012, we received a notice from the Bureau of Safety and Environmental Enforcement (“BSEE”) that it was initiating an enforcement proceeding with respect to an Incident of Non-Compliance observed at our Vermillion Block 255 Platform H in April 2012. The notice indicates that BSEE may seek to impose a penalty of up to $25,000 a day for up to as many as eight days of alleged improper venting of gas at the platform. We believe that the conditions observed were not actually violations of applicable rules and have initiated discussions with BSEE to resolve the matter. We do not believe that this proceeding will have a material adverse effect on our financial condition or results of operations.

Litigation is subject to substantial uncertainties concerning the outcome of material factual and legal issues relating to the litigation. Accordingly, we cannot currently predict the manner and timing of the resolution of these matters and are unable to estimate a range of possible losses or any minimum loss from such matters.

Item 1A. Risk Factors

The following risk factor updates the Risk Factors included in our 2012 Annual Report on Form 10-K. Except as set forth below, there have been no material changes to the risks described in Part I, Item 1A, of our 2012 Annual Report on Form 10-K.

We may not be insured against all of the operating risks to which our business is exposed.

Effective May 1, 2013, we no longer purchase physical damage insurance coverage for our platforms for losses resulting from named windstorms or operational activities with the exception of our Amberjack and Pompano platforms for which we purchase operational loss coverage. We have continued purchasing physical damage insurance for operational losses for a selected group of pipelines including the pipelines and umbilicals associated with our Amberjack and Pompano facilities.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On September 24, 2007, our Board of Directors authorized a share repurchase program for an aggregate amount of up to $100 million. The shares may be repurchased from time to time in the open market or through privately negotiated transactions. The repurchase program is subject to business and market conditions, and may be suspended or discontinued at any time. Additionally, shares were withheld from certain employees to pay taxes associated with the employees’ vesting of restricted stock. The following table sets forth information regarding our repurchases or acquisitions of common stock during the three months ended March 31, 2013:

Period	Total Number of Shares (or Units) Purchased			Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs
Share Repurchase Program:
January 2013		—			—		—
February 2013		—			—		—
March 2013		—			—		—
		—			—		—	$	92,928,632
Other:
January 2013		164,172	(a)	$	21.11		—
February 2013		—			—		—
March 2013		—			—		—
		164,172		$	21.11		—		N/A
Total		164,172		$	21.11		—

(a) Amount includes shares withheld from employees and nonemployee directors upon the vesting of restricted stock in order to satisfy the required tax withholding obligations.

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Item 6. Exhibits
3.1	Certificate of Incorporation of the Registrant, as amended on June 4, 1993, February 1, 2001 and February 19, 2002 (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed August 7, 2012 (File No. 001-12074)).
3.2	Amended & Restated Bylaws of Stone Energy Corporation, dated May 15, 2008 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 21, 2008 (File No. 001-12074)).
4.1	Indenture between Stone Energy Corporation and JPMorgan Chase Bank, National Association, as trustee, dated December 15, 2004 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed December 17, 2004 (File No. 001-12074)).
4.2	First Supplemental Indenture, dated August 28, 2008, to the Indenture between Stone Energy Corporation and JPMorgan Chase Bank, National Association, as trustee, dated December 15, 2004 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed August 29, 2008 (File No. 001-12074)).
4.3	Second Supplemental Indenture, dated January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., successor to JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed January 29, 2010 (File No. 001-12074)).
4.4	Indenture, dated January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed January 29, 2010 (File No. 001-12074)).
4.5	First Supplemental Indenture, dated January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed January 29, 2010 (File No. 001-12074)).
4.6	Indenture related to the 1 3/4% Senior Convertible Notes due 2017, dated as of March 6, 2012, among Stone Energy Corporation, Stone Energy Offshore, L.L.C. and The Bank of New York Mellon Trust Company, N.A., as trustee (including form of 1 3/4% Senior Convertible Senior Note due 2017) (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
4.7	Second Supplemental Indenture, dated as of November 6, 2012, to the Indenture, dated as of December 15, 2004, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed November 8, 2012 (File No. 001-12074)).
4.8	Second Supplemental Indenture, dated as of November 8, 2012, to the Indenture, dated as of January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed November 8, 2012 (File No. 001-12074)).
10.1	$700,000,000 Third Amended and Restated Credit Agreement among Stone Energy Corporation as Borrower, Bank of America, N.A. as Administrative Agent and Issuing Bank, and the financial institutions named therein, dated April 26, 2011 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File No. 001-12074)).
10.2	Amendment No. 1 and Consent dated as of February 28, 2012 to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 5, 2012 (File No. 001-12074)).

26

10.3	Amendment No. 2 and Consent dated as of October 22, 2012 to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 22, 2012 (File No. 001-12074)).
10.4*	Amendment No. 3 dated as of April 30, 2013 to the Third Amended and Restated Credit Agreement.
10.5	Base Bond Hedge Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.6	Base Bond Hedge Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.7	Additional Bond Hedge Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.8	Additional Bond Hedge Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.9	Base Warrant Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.10	Base Warrant Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.11	Additional Warrant Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.12	Additional Warrant Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.13	Amendment to Base Warrant Confirmation and Additional Warrant Confirmation dated March 5, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.14	Amendment to Base Warrant Confirmation and Additional Warrant Confirmation dated March 5, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
*31.1	Certification of Principal Executive Officer of Stone Energy Corporation as required by Rule 13a-14(a) of the Securities Exchange Act of 1934.
*31.2	Certification of Principal Financial Officer of Stone Energy Corporation as required by Rule 13a-14(a) of the Securities Exchange Act of 1934.
*#32.1	Certification of Chief Executive Officer and Chief Financial Officer of Stone Energy Corporation pursuant to 18 U.S.C. § 1350.

27

**101.INS	XBRL Instance Document
**101.SCH	XBRL Schema Document
**101.CAL	XBRL Calculation Linkbase Document
**101.DEF	XBRL Definition Linkbase Document
**101.LAB	XBRL Label Linkbase Document
**101.PRE	XBRL Presentation Linkbase Document

* Filed or furnished herewith.

** Furnished, not filed. Users of this data submitted electronically herewith are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

# Not considered to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

28

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STONE ENERGY CORPORATION
Date: May 8, 2013	By:	/s/ J. Kent Pierret
		J. Kent Pierret
		Senior Vice President,
		Chief Accounting Officer and Treasurer
		(On behalf of the Registrant and as
		Chief Accounting Officer)

29

EXHIBIT INDEX

Exhibit   Number	Description
3.1	Certificate of Incorporation of the Registrant, as amended on June 4, 1993, February 1, 2001 and February 19, 2002 (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed August 7, 2012 (File No. 001-12074)).
3.2	Amended & Restated Bylaws of Stone Energy Corporation, dated May 15, 2008 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 21, 2008 (File No. 001-12074)).
4.1	Indenture between Stone Energy Corporation and JPMorgan Chase Bank, National Association, as trustee, dated December 15, 2004 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed December 17, 2004 (File No. 001-12074)).
4.2	First Supplemental Indenture, dated August 28, 2008, to the Indenture between Stone Energy Corporation and JPMorgan Chase Bank, National Association, as trustee, dated December 15, 2004 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed August 29, 2008 (File No. 001-12074)).
4.3	Second Supplemental Indenture, dated January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., successor to JPMorgan Chase Bank, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed January 29, 2010 (File No. 001-12074)).
4.4	Indenture, dated January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed January 29, 2010 (File No. 001-12074)).
4.5	First Supplemental Indenture, dated January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed January 29, 2010 (File No. 001-12074)).
4.6	Indenture related to the 1 3/4% Senior Convertible Notes due 2017, dated as of March 6, 2012, among Stone Energy Corporation, Stone Energy Offshore, L.L.C. and The Bank of New York Mellon Trust Company, N.A., as trustee (including form of 1 3/4% Senior Convertible Senior Note due 2017) (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
4.7	Second Supplemental Indenture, dated as of November 6, 2012, to the Indenture, dated as of December 15, 2004, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed November 8, 2012 (File No. 001-12074)).
4.8	Second Supplemental Indenture, dated as of November 8, 2012, to the Indenture, dated as of January 26, 2010, among Stone Energy Corporation, Stone Energy Offshore, L.L.C., and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed November 8, 2012 (File No. 001-12074)).
10.1	$700,000,000 Third Amended and Restated Credit Agreement among Stone Energy Corporation as Borrower, Bank of America, N.A. as Administrative Agent and Issuing Bank, and the financial institutions named therein, dated April 26, 2011 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File No. 001-12074)).

30

10.2	Amendment No. 1 and Consent dated as of February 28, 2012 to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 5, 2012 (File No. 001-12074)).
10.3	Amendment No. 2 and Consent dated as of October 22, 2012 to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 22, 2012 (File No. 001-12074)).
10.4*	Amendment No. 3 dated as of April 30, 2013 to the Third Amended and Restated Credit Agreement.
10.5	Base Bond Hedge Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.6	Base Bond Hedge Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.7	Additional Bond Hedge Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.8	Additional Bond Hedge Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.9	Base Warrant Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.10	Base Warrant Confirmation dated as of February 29, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.11	Additional Warrant Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.12	Additional Warrant Confirmation dated as of March 2, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.13	Amendment to Base Warrant Confirmation and Additional Warrant Confirmation dated March 5, 2012, by and between Stone Energy Corporation and Barclays Capital Inc., acting as agent for Barclays Bank PLC (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
10.14	Amendment to Base Warrant Confirmation and Additional Warrant Confirmation dated March 5, 2012, by and between Stone Energy Corporation and Bank of America N.A. (incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed March 6, 2012 (File No. 001-12074)).
*31.1	Certification of Principal Executive Officer of Stone Energy Corporation as required by Rule 13a-14(a) of the Securities Exchange Act of 1934.
*31.2	Certification of Principal Financial Officer of Stone Energy Corporation as required by Rule 13a-14(a) of the Securities Exchange Act of 1934.

31

*#32.1	Certification of Chief Executive Officer and Chief Financial Officer of Stone Energy Corporation pursuant to 18 U.S.C. § 1350.
**101.INS	XBRL Instance Document
**101.SCH	XBRL Schema Document
**101.CAL	XBRL Calculation Linkbase Document
**101.DEF	XBRL Definition Linkbase Document
**101.LAB	XBRL Label Linkbase Document
**101.PRE	XBRL Presentation Linkbase Document

* Filed or furnished herewith.

** Furnished, not filed. Users of this data submitted electronically herewith are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

# Not considered to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

32

EX-10.4

Exhibit 10.4

Execution Version

AMENDMENT NO. 3 TO CREDIT AGREEMENT AND GUARANTY

This Amendment No. 3 to Credit Agreement and Guaranty dated as of April 30, 2013 (this “Agreement”) is among Stone Energy Corporation, a Delaware corporation (the “Borrower”), Stone Energy Offshore, L.L.C., a Delaware limited liability company (the “Guarantor”), the financial institutions party to the Credit Agreement described below as Banks (the “Banks”), and Bank of America, N.A., as Agent for the Banks (the “Agent”) and as Issuing Bank (the “Issuing Bank”).

INTRODUCTION

A. The Borrower, the Banks, the Issuing Bank, and the Agent have entered into the Third Amended and Restated Credit Agreement dated as of April 26, 2011 (as amended by Amendment No. 1 and Consent, dated as of February 28, 2012 and the Amendment No. 2 and Consent dated as of October 22, 2012, and as further amended, restated, amended and restated or otherwise modified, the “Credit Agreement”).

B. The Guarantor entered into that certain Amended and Restated Guaranty dated as of April 26, 2011 (the “Stone Offshore Guaranty”).

C. The Guarantor wishes to reaffirm its guarantee of the Obligations as amended by this Agreement.

THEREFORE, in fulfillment of the foregoing, the Borrower, the Guarantor, the Agent, the Issuing Bank, and the Banks hereby agree as follows:

Section 1. Definitions; References. Unless otherwise defined in this Agreement, each term used in this Agreement which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.

Section 2. Amendments. Upon the satisfaction of the conditions specified in Section 7 of this Agreement, and, unless otherwise specified, effective as of the date set forth above, the Credit Agreement is amended as follows:

(a) Section 5.2(a) of the Credit Agreement is amended to read in its entirety as follows:

“(a) Required Insurance Coverage. Borrower will maintain, and will cause each Subsidiary to maintain, property and physical damage insurance on selected real and personal property on an all risks basis (including the perils of flood and quake on a sub-limited basis), covering the repair and replacement cost of all such selected property. Borrower will also maintain commercial general liability and excess liability insurance and products/completed operations liability coverage. Each of the policies described in this clause (a) shall be of the kinds and in the amounts customarily carried or maintained by Persons of established

reputation engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates; provided that the Borrower may self-insure against wind damage if deemed appropriate by the Borrower. All such insurance (other than permitted self-insurance) shall be provided by insurers having a minimum A.M. Best policyholders rating of A-, VII. Borrower will not, and will not permit any of its Subsidiaries to, bring or keep any article on any business location of Borrower or any of its Subsidiaries, or cause or allow any condition to exist, if the presence of such article or the occurrence of such condition would reasonably cause the invalidation of any insurance required by this Section 5.2, or would otherwise be prohibited by the terms thereof.”

Section 3. Reaffirmation of Liens.

(a) Each of the Borrower and the Guarantor (i) is party to certain Security Documents securing and supporting the Borrower’s and Guarantor’s obligations under the Credit Documents, (ii) represents and warrants that it has no defenses to the enforcement of the Security Documents and that according to their terms the Security Documents will continue in full force and effect to secure the Borrower’s and Guarantor’s obligations under the Credit Documents, as the same may be amended, supplemented, or otherwise modified, and (iii) acknowledges, represents, and warrants that the liens and security interests created by the Security Documents are valid and subsisting and create an Acceptable Security Interest in the Collateral to secure the Borrower’s and Guarantor’s obligations under the Credit Documents, as the same may be amended, supplemented, or otherwise modified.

(b) The delivery of this Agreement does not indicate or establish a requirement that any Guaranty or Security Document requires the Borrower’s or any Guarantor’s approval of amendments to the Credit Agreement.

Section 4. Representations and Warranties. Each of the Borrower and the Guarantor represents and warrants to the Agent and the Banks that:

(a) the representations and warranties set forth in the Credit Agreement and in the other Credit Documents are true and correct in all material respects as of the date of this Agreement (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); provided that such materiality qualifier shall not apply if such representation or warranty is already subject to a materiality qualifier in the Credit Agreement or such other Credit Document;

(b) (i) the execution, delivery, and performance of this Agreement are within the corporate or limited liability company power, as appropriate, and authority of the Borrower and Guarantor and have been duly authorized by appropriate proceedings and (ii) this Agreement constitutes a legal, valid, and binding obligation of the Borrower and Guarantor, enforceable against the Borrower and Guarantor in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; and

-2-

(c) as of the effectiveness of this Agreement and after giving effect thereto, no Default or Event of Default has occurred and is continuing.

Section 5. Reaffirmation of Guaranty. The Guarantor hereby ratifies, confirms, and acknowledges that its obligations under the Stone Offshore Guaranty are in full force and effect and that the Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all of the Obligations (subject to the terms of the Stone Offshore Guaranty), as such Obligations may have been amended by this Agreement. The Guarantor hereby acknowledges that its execution and delivery of this Agreement do not indicate or establish an approval or consent requirement by the Guarantor under the Stone Offshore Guaranty in connection with the execution and delivery of amendments, modifications or waivers to the Credit Agreement, the Notes or any of the other Credit Documents.

Section 6. Effectiveness. This Agreement shall become effective as of the date hereof, and the Credit Agreement shall be amended as provided herein, upon the occurrence of all of the following: (a) the Majority Banks’, the Borrower’s, and the Guarantor’s duly and validly executing originals of this Agreement and delivery thereof to the Agent; (b) the representations and warranties in this Agreement being true and correct in all material respects before and after giving effect to this Agreement; and (c) the Borrower’s having paid all costs, expenses, and fees which have been invoiced and are payable pursuant to Section 9.4 of the Credit Agreement or any other written agreement.

Section 7. Effect on Credit Documents. Except as amended herein, the Credit Agreement and the Credit Documents remain in full force and effect as originally executed, and nothing herein shall act as a waiver of any of the Agent’s or Banks’ rights under the Credit Documents, as amended. This Agreement is a Credit Document for the purposes of the provisions of the other Credit Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Agreement may be a Default or Event of Default under other Credit Documents.

Section 8. Choice of Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York.

Section 9. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original.

[The remainder of this page has been left blank intentionally.]

-3-

THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

EXECUTED as of the date first set forth above.

BORROWER: STONE ENERGY CORPORATION
By:	/s/ David H. Welch
Name:	David H. Welch
Title:	President and Chief Executive Officer
By:	/s/ Kenneth H. Beer
Name:	Kenneth H. Beer
Title:	Executive Vice President and Chief Financial Officer
GUARANTOR: STONE ENERGY OFFSHORE, L.L.C.
By:	/s/ David H. Welch
Name:	David H. Welch
Title:	President and Chief Executive Officer
By:	/s/ Kenneth H. Beer
Name:	Kenneth H. Beer
Title:	Executive Vice President and Chief Financial Officer

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

AGENT AND ISSUING BANK: BANK OF AMERICA, N.A., as Agent and Issuing Bank
By:	/s/ Ronald E. McKaig
Name:	Ronald E. McKaig
Title:	Managing Director
BANKS: BANK OF AMERICA, N.A.
By:	/s/ Ronald E. McKaig
Name:	Ronald E. McKaig
Title:	Managing Director

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

WELLS FARGO BANK, N.A.
By:	/s/ Patrick J. Fults
Name:	Patrick J. Fults
Title:	Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

NATIXIS
By:	/s/ Louis P. Laville III
Name:	Louis P. Laville III
Title:	Managing Director
By:	/s/ Stuart Murray
Name:	Stuart Murray
Title:	Managing Director

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

THE BANK OF NOVA SCOTIA
By:	/s/ Terry Donovan
Name:	Terry Donovan
Title:	Managing Director

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

CAPITAL ONE, N.A.
By:	/s/ Matthew Molero
Name:	Matthew Molero
Title:	Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

TORONTO DOMINION (NEW YORK) LLC
By:	/s/ Marie Fernandes
Name:	Marie Fernandes
Title:	Authorized Signatory

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

BARCLAYS BANK PLC
By:	/s/ Vanessa A. Kurbatskiy
Name:	Vanessa A. Kurbatskiy
Title:	Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

REGIONS BANK
By:	/s/ William A. Philipp
Name:	William A. Philipp
Title:	Senior Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

U.S. BANK NATIONAL ASSOCIATION
By:	/s/ John C. Springer
Name:	John C. Springer
Title:	Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

WHITNEY BANK
By:	/s/ William Jochetz
Name:	William Jochetz
Title:	Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

IBERIABANK
By:	/s/ W. Bryan Chapman
Name:	W. Bryan Chapman
Title:	Executive Vice President

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

SUMITOMO MITSUI BANKING CORPORATION
By:	/s/ Shuji Yabe
Name:	Shuji Yabe
Title:	Managing Director

[SIGNATURE PAGE TO AMD NO. 3 TO 3^rd A&R CREDIT AGREEMENT]

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, David H. Welch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Stone Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ David H. Welch
May 8, 2013	David H. Welch
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Kenneth H. Beer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Stone Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Kenneth H. Beer
May 8, 2013	Kenneth H. Beer
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. § 1350 and in connection with the accompanying report on Form 10-Q of Stone Energy Corporation (the “Company”) for the quarterly period ended March 31, 2013 that is being filed concurrently with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, to the best of his knowledge, that:

(i.) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii.) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 8, 2013

/s/ David H. Welch

David H. Welch

President and Chief Executive Officer

/s/ Kenneth H. Beer

Kenneth H. Beer

Executive Vice President and Chief Financial Officer

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Condensed Consolidating Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012		Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 261,353		$ 279,526		$ 263,841	$ 38,451
Accounts receivable	147,336		167,288
Fair value of hedging contracts	18,712		39,655
Current income tax receivable	19,533		10,027
Deferred taxes	23,354	[1]	15,514	[1]
Inventory	4,027		4,207
Other current assets	3,587		3,626
Total current assets	477,902		519,843
Oil and gas properties, full cost method:
Proved	7,358,370		7,244,466
Less: accumulated DD&A	(5,584,698)		(5,510,166)
Net proved oil and gas properties	1,773,672		1,734,300
Unevaluated	471,457		447,795
Other property and equipment, net	22,059		22,115
Fair value of hedging contracts	6,792		9,199
Other assets, net	50,512		43,179
Investment in subsidiary
Total assets	2,802,394		2,776,431
Current liabilities:
Accounts payable to vendors	81,491		94,361
Undistributed oil and gas proceeds	28,904		23,414
Accrued interest	15,351		18,546
Fair value of hedging contracts	5,376		149
Asset retirement obligations	68,978		66,260
Other current liabilities	5,840		16,765
Total current liabilities	205,940		219,495
Long-term debt	917,267		914,126
Deferred taxes	336,108	[1]	310,830	[1]
Asset retirement obligations	412,706		422,042
Fair value of hedging contracts	2,997		1,530
Other long-term liabilities	33,853		36,275
Total liabilities	1,908,871		1,904,298
Commitments and contingencies
Stockholders' equity:
Common stock	487		484
Treasury stock	(860)		(860)
Additional paid-in capital	1,385,445		1,386,475
Accumulated deficit	(502,041)		(542,799)
Accumulated other comprehensive income	10,492		28,833
Total stockholders' equity	893,523		872,133
Total liabilities and stockholders' equity	2,802,394		2,776,431
Parent
Current assets:
Cash and cash equivalents	210,189		228,398		222,750	37,389
Accounts receivable	48,545		59,213
Fair value of hedging contracts
Current income tax receivable	19,533		10,027
Deferred taxes	3,387	[1]	5,947	[1]
Inventory	3,744		3,924
Other current assets	3,587		3,626
Total current assets	288,985		311,135
Oil and gas properties, full cost method:
Proved	1,078,367		1,004,808
Less: accumulated DD&A	(379,399)		(370,111)
Net proved oil and gas properties	698,968		634,697
Unevaluated	270,373		254,757
Other property and equipment, net	22,059		22,115
Fair value of hedging contracts
Other assets, net	48,951		41,679
Investment in subsidiary	774,817		736,331
Total assets	2,104,153		2,000,714
Current liabilities:
Accounts payable to vendors	182,210		74,503
Undistributed oil and gas proceeds	16,580		21,841
Accrued interest	15,351		18,546
Fair value of hedging contracts
Asset retirement obligations
Other current liabilities	5,522		16,765
Total current liabilities	219,663		131,655
Long-term debt	917,267		914,126
Deferred taxes	40,988	[1]	47,758	[1]
Asset retirement obligations	5,572		5,479
Fair value of hedging contracts
Other long-term liabilities	27,140		29,563
Total liabilities	1,210,630		1,128,581
Commitments and contingencies
Stockholders' equity:
Common stock	487		484
Treasury stock	(860)		(860)
Additional paid-in capital	1,385,445		1,386,475
Accumulated deficit	(502,041)		(542,799)
Accumulated other comprehensive income	10,492		28,833
Total stockholders' equity	893,523		872,133
Total liabilities and stockholders' equity	2,104,153		2,000,714
Guarantor Subsidiary
Current assets:
Cash and cash equivalents	51,164		51,128		40,955	926
Accounts receivable	221,703		108,075
Fair value of hedging contracts	18,712		39,655
Current income tax receivable
Deferred taxes	19,967	[1]	9,567	[1]
Inventory	283		283
Other current assets
Total current assets	311,829		208,708
Oil and gas properties, full cost method:
Proved	6,280,003		6,239,658
Less: accumulated DD&A	(5,205,299)		(5,140,055)
Net proved oil and gas properties	1,074,704		1,099,603
Unevaluated	201,084		193,038
Other property and equipment, net
Fair value of hedging contracts	6,792		9,199
Other assets, net	1,561		1,500
Investment in subsidiary
Total assets	1,595,970		1,512,048
Current liabilities:
Accounts payable to vendors	22,193		19,858
Undistributed oil and gas proceeds	12,324		1,573
Accrued interest
Fair value of hedging contracts	5,376		149
Asset retirement obligations	68,978		66,260
Other current liabilities	318
Total current liabilities	109,189		87,840
Long-term debt
Deferred taxes	295,120	[1]	263,072	[1]
Asset retirement obligations	407,134		416,563
Fair value of hedging contracts	2,997		1,530
Other long-term liabilities	6,713		6,712
Total liabilities	821,153		775,717
Commitments and contingencies
Stockholders' equity:
Common stock
Treasury stock
Additional paid-in capital	1,496,509		1,496,510
Accumulated deficit	(732,184)		(789,012)
Accumulated other comprehensive income	10,492		28,833
Total stockholders' equity	774,817		736,331
Total liabilities and stockholders' equity	1,595,970		1,512,048
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents					136	136
Accounts receivable
Fair value of hedging contracts
Current income tax receivable
Deferred taxes		[1]
Inventory
Other current assets
Total current assets
Oil and gas properties, full cost method:
Proved
Less: accumulated DD&A
Net proved oil and gas properties
Unevaluated
Other property and equipment, net
Fair value of hedging contracts
Other assets, net
Investment in subsidiary
Total assets
Current liabilities:
Accounts payable to vendors
Undistributed oil and gas proceeds
Accrued interest
Fair value of hedging contracts
Asset retirement obligations
Other current liabilities
Total current liabilities
Long-term debt
Deferred taxes		[1]		[1]
Asset retirement obligations
Fair value of hedging contracts
Other long-term liabilities
Total liabilities
Commitments and contingencies
Stockholders' equity:
Common stock
Treasury stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income
Total stockholders' equity
Total liabilities and stockholders' equity
Eliminations
Current assets:
Cash and cash equivalents
Accounts receivable	(122,912)
Fair value of hedging contracts
Current income tax receivable
Deferred taxes		[1]
Inventory
Other current assets
Total current assets	(122,912)
Oil and gas properties, full cost method:
Proved
Less: accumulated DD&A
Net proved oil and gas properties
Unevaluated
Other property and equipment, net
Fair value of hedging contracts
Other assets, net
Investment in subsidiary	(774,817)		(736,331)
Total assets	(897,729)		(736,331)
Current liabilities:
Accounts payable to vendors	(122,912)
Undistributed oil and gas proceeds
Accrued interest
Fair value of hedging contracts
Asset retirement obligations
Other current liabilities
Total current liabilities	(122,912)
Long-term debt
Deferred taxes		[1]		[1]
Asset retirement obligations
Fair value of hedging contracts
Other long-term liabilities
Total liabilities	(122,912)
Commitments and contingencies
Stockholders' equity:
Common stock
Treasury stock
Additional paid-in capital	(1,496,509)		(1,496,510)
Accumulated deficit	732,184		789,012
Accumulated other comprehensive income	(10,492)		(28,833)
Total stockholders' equity	(774,817)		(736,331)
Total liabilities and stockholders' equity	$ (897,729)		$ (736,331)

[1] Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside

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Changes in Asset Retirement Obligations (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Asset Retirement Obligation [Line Items]
Asset retirement obligations as of the beginning of the period, including current portion	$ 488,300,000
Liabilities settled	(14,900,000)
Accretion expense	8,263,000	8,266,000
Asset retirement obligations as of the end of the period, including current portion	$ 481,700,000

XML

Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Maximum correlation between price of oil & natural gas in market and underlying price basis indicative in the derivative contract	100.00%
Accumulated other comprehensive income (loss)	$ 10,492,000	$ 28,833,000
Accumulated other comprehensive income, to be reclassified into earning in the next twelve months	$ 8,100,000

XML

Fair Value Measurements - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
8.625 % Senior Notes Due 2017
Debt Instrument [Line Items]
Long term debt, Fair Value	$ 403.1	$ 401.3
Convertible Notes Due 2017
Debt Instrument [Line Items]
Liability component of convertible note	265.9	249.6
7.5% Senior Notes due 2022
Debt Instrument [Line Items]
Liability component of convertible note	$ 324.8	$ 314.3

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Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities

Note 3 – Derivative Instruments and Hedging Activities

Our hedging strategy is designed to protect our near and intermediate term cash flow from future declines in oil and natural gas prices. This protection is essential to capital budget planning, which is sensitive to expenditures that must be committed to in advance such as rig contracts and the purchase of tubular goods. We enter into hedging transactions to secure a commodity price for a portion of future production that is acceptable at the time of the transaction. These hedges are designated as cash flow hedges upon entering into the contract. We do not enter into hedging transactions for trading purposes. We have no fair value hedges.

The nature of a derivative instrument must be evaluated to determine if it qualifies for hedge accounting treatment. If the instrument qualifies for hedge accounting treatment, it is recorded as either an asset or liability measured at fair value and subsequent changes in the derivative’s fair value are recognized in equity through other comprehensive income (loss), net of related taxes, to the extent the hedge is considered effective. Additionally, monthly settlements of effective hedges are reflected in revenue from oil and gas production and cash flows from operations. Instruments not qualifying for hedge accounting treatment are recorded in the balance sheet at fair value and changes in fair value are recognized in earnings through derivative expense (income). Typically, a small portion of our derivative contracts are determined to be ineffective. This is because oil and natural gas price changes in the markets in which we sell our products are not 100% correlative to changes in the underlying price basis indicative in the derivative contract. Monthly settlements of ineffective hedges are recognized in earnings through derivative expense (income) and cash flows from operations.

We have entered into fixed-price swaps with various counterparties for a portion of our expected 2013, 2014 and 2015 oil and natural gas production from the Gulf Coast Basin. Some of our fixed-price oil swap settlements are based on an average of the New York Mercantile Exchange (“NYMEX”) closing price for West Texas Intermediate during the entire calendar month, and some are based on the average of the Intercontinental Exchange closing price for Brent crude oil during the entire calendar month. Our fixed-price gas swap settlements are based on the NYMEX price for the last day of a respective contract month. Swaps typically provide for monthly payments by us if prices rise above the swap price or to us if prices fall below the swap price. Our fixed-price swap contracts are with The Toronto-Dominion Bank, Barclays Bank PLC, BNP Paribas, The Bank of Nova Scotia, Bank of America, Natixis and Regions Bank.

All of our derivative instruments at March 31, 2013 and December 31, 2012 were designated as effective cash flow hedges; however, during the three-month periods ended March 31, 2013 and 2012, certain of our derivative contracts were determined to be partially ineffective. The following tables disclose the location and fair value amounts of derivative instruments reported in our balance sheet at March 31, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at March 31, 2013
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	18.7	Current liabilities: Fair value of hedging contracts	($	5.4	)
	Long-term assets: Fair value of hedging contracts		6.8	Long-term liabilities: Fair value of hedging contracts		(3.0	)
		$	25.5		($	8.4	)

Fair Value of Derivative Instruments at December 31, 2012
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	39.7	Current liabilities: Fair value of hedging contracts	($	0.1	)
	Long-term assets: Fair value of hedging contracts		9.2	Long-term liabilities: Fair value of hedging contracts		(1.5	)
		$	48.9		($	1.6	)

The following table discloses the effect of derivative instruments in the statement of operations for the three-month periods ended March 31, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended March 31, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives (a)						Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (b)						Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013			2012			Location	2013		2012			Location	2013			2012
Commodity contracts	($	12.9	)	($	22.7	)	Operating revenue—oil/gas production	$	5.4	($	0.6	)	Derivative income (expense), net	($	1.2	)	($	0.5	)
Total	($	12.9	)	($	22.7	)		$	5.4	($	0.6	)		($	1.2	)	($	0.5	)

(a) Net of related tax effect of ($7.4) million and ($12.8) million for the three months ended March 31, 2013 and 2012, respectively.

(b) Net of related tax effect of ($3.1) million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively. For the three months ended March 31, 2013, effective hedging contracts increased oil revenue by $4.5 million and increased gas revenue by $4.0 million. For the three months ended March 31, 2012, effective hedging contracts decreased oil revenue by $5.8 million and increased gas revenue by $4.8 million.

At March 31, 2013, we had accumulated other comprehensive income of $10.5 million, net of tax, which related to the fair value of our swap contracts that were outstanding as of March 31, 2013. We believe that approximately $8.1 million of the accumulated other comprehensive income will be reclassified into earnings in the next 12 months.

Our derivative contracts are subject to netting arrangements. It is our policy to not offset our derivative contracts in presenting the fair value of these contracts as assets and liabilities in our consolidated balance sheet. The following presents the potential impact of the rights of offset associated with our recognized assets and liabilities at March 31, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	18.7		($	5.7	)	$	13.0
Long-term assets: Fair value of hedging contracts		6.8			(2.0	)		4.8
Current liabilities: Fair value of hedging contracts		(5.4	)		4.7			(0.7	)
Long-term liabilities: Fair value of hedging contracts		(3.0	)		3.0			—

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of May 2, 2013:

	Fixed-Price Swaps NYMEX (except where noted)
	Natural Gas					Oil
	Daily Volume (MMBtus/d)			Swap Price ($)		Daily  Volume (Bbls/d)			Swap Price ($)
2013		10,000			4.000		2,000	(a)		92.35
2013		10,000	(b)		4.050		1,000			92.80
2013		20,000	(a)		4.450		2,000	(c)		94.05
2013		10,000			5.270		1,000			94.45
2013		10,000			5.320		1,000			94.60
2013							1,000			97.15
2013							1,000			101.53
2013							1,000			103.00
2013							1,000			103.15
2013							1,000			104.25
2013							1,000			104.47
2013							1,000			104.50
2013							1,000	(d)		107.30
2014		10,000			4.000		1,000			90.06
2014		10,000			4.040		1,000			93.55
2014		10,000			4.105		1,000			94.00
2014		10,000			4.190		1,000			98.00
2014		10,000			4.250		1,000			98.30
2014		10,000			4.350		1,000			99.65
2014							1,000	(d)		103.30
2015		10,000			4.005		1,000			90.00
2015		10,000			4.220
2015		10,000			4.255

(a) July through December

(b) April through December

(c) January through June

(d) Brent oil contract

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Impact of Rights of Offset Associated with Recognized Assets and Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Current Asset
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	$ 18.7
Long-term assets
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	6.8
Current liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	(5.4)
Long-term liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	(3.0)
Effects of Netting | Current Asset
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	(5.7)
Effects of Netting | Long-term assets
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	(2.0)
Effects of Netting | Current liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	4.7
Effects of Netting | Long-term liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	3.0
With Effects Of Netting | Current Asset
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	13.0
With Effects Of Netting | Long-term assets
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	4.8
With Effects Of Netting | Current liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	$ (0.7)

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Effect of Derivative Instruments in Statement of Operations (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net, Total	$ (7.4)	$ (12.8)
Derivative Instruments, Gain (Loss) Reclassified in Other Comprehensive Income (Loss), Effective Portion, Net, Total	(3.1)	0.4
Oil
Derivative Instruments, Gain (Loss) [Line Items]
Decrease/increase in oil revenue owing to effective hedging contracts	4.5	5.8
Natural Gas
Derivative Instruments, Gain (Loss) [Line Items]
Decrease/increase in gas revenue owing to effective hedging contracts	$ 4.0	$ 4.8

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Hedging Positions (Detail)	Mar. 31, 2013 MMBTU
Natural Gas | 2013 Hedging Position One
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.000
Natural Gas | 2013 Hedging Position Two
Derivative [Line Items]
Daily Volume	10,000	[1]
Swap Price	4.050
Natural Gas | 2013 Hedging Position Three
Derivative [Line Items]
Daily Volume	20,000	[2]
Swap Price	4.450
Natural Gas | 2013 Hedging Position Four
Derivative [Line Items]
Daily Volume	10,000
Swap Price	5.270
Natural Gas | 2013 Hedging Position Five
Derivative [Line Items]
Daily Volume	10,000
Swap Price	5.320
Natural Gas | 2014 Hedging Position One
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.000
Natural Gas | 2014 Hedging Position Two
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.040
Natural Gas | 2014 Hedging Position Three
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.105
Natural Gas | 2014 Hedging Position Four
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.190
Natural Gas | 2014 Hedging Position Five
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.250
Natural Gas | 2014 Hedging Position Six
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.350
Natural Gas | 2015 Hedging Position One
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.005
Natural Gas | 2015 Hedging Position Two
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.220
Natural Gas | 2015 Hedging Position Three
Derivative [Line Items]
Daily Volume	10,000
Swap Price	4.255
Oil | 2013 Hedging Position One
Derivative [Line Items]
Daily Volume	2,000	[2]
Swap Price	92.350
Oil | 2013 Hedging Position Two
Derivative [Line Items]
Daily Volume	1,000
Swap Price	92.800
Oil | 2013 Hedging Position Three
Derivative [Line Items]
Daily Volume	2,000	[3]
Swap Price	94.050
Oil | 2013 Hedging Position Four
Derivative [Line Items]
Daily Volume	1,000
Swap Price	94.450
Oil | 2013 Hedging Position Five
Derivative [Line Items]
Daily Volume	1,000
Swap Price	94.600
Oil | 2013 Hedging Position Six
Derivative [Line Items]
Daily Volume	1,000
Swap Price	97.15
Oil | 2013 Hedging Position Seven
Derivative [Line Items]
Daily Volume	1,000
Swap Price	101.53
Oil | 2013 Hedging Position Eight
Derivative [Line Items]
Daily Volume	1,000
Swap Price	103.00
Oil | 2013 Hedging Position Nine
Derivative [Line Items]
Daily Volume	1,000
Swap Price	103.15
Oil | 2013 Hedging Position Ten
Derivative [Line Items]
Daily Volume	1,000
Swap Price	104.25
Oil | 2013 Hedging Position Eleven
Derivative [Line Items]
Daily Volume	1,000
Swap Price	104.47
Oil | 2013 Hedging Position Twelve
Derivative [Line Items]
Daily Volume	1,000
Swap Price	104.50
Oil | 2013 Hedging Position Thirteen
Derivative [Line Items]
Daily Volume	1,000	[4]
Swap Price	107.30
Oil | 2014 Hedging Position One
Derivative [Line Items]
Daily Volume	1,000
Swap Price	90.060
Oil | 2014 Hedging Position Two
Derivative [Line Items]
Daily Volume	1,000
Swap Price	93.550
Oil | 2014 Hedging Position Three
Derivative [Line Items]
Daily Volume	1,000
Swap Price	94.000
Oil | 2014 Hedging Position Four
Derivative [Line Items]
Daily Volume	1,000
Swap Price	98.000
Oil | 2014 Hedging Position Five
Derivative [Line Items]
Daily Volume	1,000
Swap Price	98.300
Oil | 2014 Hedging Position Six
Derivative [Line Items]
Daily Volume	1,000
Swap Price	99.650
Oil | 2014 Hedging Position Three
Derivative [Line Items]
Daily Volume	1,000	[4]
Swap Price	103.30
Oil | 2015 Hedging Position One
Derivative [Line Items]
Daily Volume	1,000
Swap Price	90.000

[1] April through December

[2] July through December

[3] January through June

[4] Brent oil contract

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Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Long-term debt	$ 917,267	$ 914,126
8.625% Senior Notes due 2017
Debt Instrument [Line Items]
Long-term debt	375,000	375,000
Senior Convertible Notes due 2017
Debt Instrument [Line Items]
Long-term debt	242,300	239,100
7.5% Senior Notes due 2022
Debt Instrument [Line Items]
Long-term debt	300,000	300,000
Bank Debt
Debt Instrument [Line Items]
Long-term debt

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Earnings Per Share

3 Months Ended

Mar. 31, 2013

Earnings Per Share

Note 2 – Earnings Per Share

The following table sets forth the calculation of basic and diluted weighted average shares outstanding and earnings per share for the indicated periods.

	Three Months Ended March 31,
	2013			2012
	(in thousands, except per share data)
Income (numerator):
Basic:
Net income	$	40,758		$	50,974
Net income attributable to participating securities		(770	)		(877	)
Net income attributable to common stock—basic	$	39,988		$	50,097
Diluted:
Net income	$	40,758		$	50,974
Net income attributable to participating securities		(770	)		(876	)
Net income attributable to common stock—diluted	$	39,988		$	50,098
Weighted average shares (denominator):
Weighted average shares—basic		48,619			48,254
Diluted effect of stock options		38			45
Weighted average shares—diluted		48,657			48,299
Basic income per common share	$	0.82		$	1.04
Diluted income per common share	$	0.82		$	1.04

Stock options that were considered antidilutive because the exercise price of the options exceeded the average price of our common stock for the applicable period totaled approximately 347,000 and 372,000 shares during the three months ended March 31, 2013 and 2012, respectively. During the three months ended March 31, 2013 and 2012, respectively, approximately 291,000 and 232,000 shares of common stock were issued from authorized shares upon the vesting (lapse of forfeiture restrictions) of restricted stock by employees and nonemployee directors.

Because it is management’s stated intention to redeem the principal amount of our 1 ³/₄% Senior Convertible Notes due 2017 (the “2017 Convertible Notes”) (see Note 4 – Long-Term Debt) in cash, we have used the treasury method for determining potential dilution in the diluted earnings per share computation. Since the average price of our common stock was less than the effective conversion price for such notes during the reporting period, the 2017 Convertible Notes were not dilutive for such period. Additionally, since the average price of our common stock was less than the strike price of the Sold Warrants (as defined in Note 4 – Long-Term Debt) for the reporting period, such warrants were also not dilutive for such period.

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Long-Term Debt - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended		3 Months Ended		3 Months Ended				3 Months Ended
	Mar. 28, 2013 Senior Convertible Notes due 2017	Mar. 31, 2013 Senior Convertible Notes due 2017	Mar. 06, 2012 Senior Convertible Notes due 2017	Mar. 31, 2013 Bank Debt	Apr. 26, 2011 Bank Debt	Mar. 31, 2013 Bank Credit Facility	May 02, 2013 Bank Credit Facility Subsequent Event	Mar. 31, 2013 Letter of Credit	May 02, 2013 Letter of Credit Subsequent Event	Mar. 31, 2013 8.625 % Senior Notes Due 2017	Mar. 31, 2013 Seven Point Five Percent Senior Notes Due Two Thousand Twenty Two [Member]	Mar. 31, 2013 7.5% Senior Notes due 2022
Debt Instrument [Line Items]
Credit facility initial date				Apr. 26, 2011
Redetermined base borrowing and credit facility					$ 700
Maturity of new credit facility if note issue under 2004 indenture are retired on or before April 15, 2014						Apr. 26, 2015
Initial bank and availability under facility				400.0		379.0	379.0
Outstanding borrowing under bank credit facility						0	0	21.0	21.0
Oil and gas reserve as proportion of discounted present value of future net cash flow, for mortgage				80.00%
Aggregate principal amount of Senior Subordinated Notes			300
Initial conversion rate of convertible note 2017		An initial conversion rate of 23.4449 shares of our common stock per $1,000 principal amount of 2017 Convertible Notes
Initial conversion price of convertible note 2017		$ 42.65
Closing share price	$ 21.75
Payment for call option		70.8
Anti-dilution adjustments for purchases of call option		7,033,470
Strike price per share		$ 55.91
Proceeds from sale of warrants		40.1
Carrying amount of liability component		229.2
Effective market interest rate		7.51%
Carrying amount of equity component		70.8
Transaction costs allocated to liability and equity components		8.9
Proceeds from warrant transaction		40.1
Liability component of convertible note		242.3
Interest cost related to amortization of discount		3.1
Amortization of deferred financing cost		0.3								0.4	0.2
Interest expense related to contractual interest coupon of convertible notes		$ 1.3								$ 8.1		$ 5.6

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Condensed Consolidating Statement of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating revenue:
Oil production	$ 186,925	$ 201,758
Gas production	36,822	28,857
Natural gas liquids production	9,178	13,452
Other operational income	807	890
Total operating revenue	233,732	244,957
Operating expenses:
Lease operating expenses	53,044	44,480
Transportation, processing and gathering expenses	5,397	3,657
Production taxes	2,089	3,378
Depreciation, depletion, amortization	75,435	84,575
Accretion expense	8,263	8,266
Salaries, general and administrative	13,952	13,705
Incentive compensation expense	1,431	1,442
Derivative expense, net	1,221	485
Other operational expenses	72	42
Total operating expenses	160,904	160,030
Income (loss) from operations	72,828	84,927
Other (income) expenses:
Interest expense	9,635	5,731
Interest income	(117)	(31)
Other income	(726)	(420)
(Income) loss from investment in subsidiaries
Total other (income) expenses	8,792	5,280
Income (loss) before taxes	64,036	79,647
Provision (benefit) for income taxes:
Current	(3,746)	1,234
Deferred	27,024	27,439
Total income taxes	23,278	28,673
Net income	40,758	50,974
Comprehensive income	22,417	28,909
Parent
Operating revenue:
Oil production	5,343	6,234
Gas production	7,198	5,631
Natural gas liquids production	2,299	3,864
Other operational income	649	694
Total operating revenue	15,489	16,423
Operating expenses:
Lease operating expenses	2,291	4,904
Transportation, processing and gathering expenses	2,052	2,488
Production taxes	867	1,163
Depreciation, depletion, amortization	10,191	11,477
Accretion expense	93	148
Salaries, general and administrative	13,948	12,654
Incentive compensation expense	1,431	1,442
Other operational expenses	50	42
Total operating expenses	30,923	34,318
Income (loss) from operations	(15,434)	(17,895)
Other (income) expenses:
Interest expense	9,627	5,846
Interest income	(80)	(30)
Other income	(224)	(19)
(Income) loss from investment in subsidiaries	(56,828)	(66,137)
Total other (income) expenses	(47,505)	(60,340)
Income (loss) before taxes	32,071	42,445
Provision (benefit) for income taxes:
Current	(3,746)	1,234
Deferred	(4,941)	(9,763)
Total income taxes	(8,687)	(8,529)
Net income	40,758	50,974
Comprehensive income	22,417	28,909
Guarantor Subsidiary
Operating revenue:
Oil production	181,582	195,524
Gas production	29,624	23,226
Natural gas liquids production	6,879	9,588
Other operational income	158	63
Total operating revenue	218,243	228,401
Operating expenses:
Lease operating expenses	50,753	39,387
Transportation, processing and gathering expenses	3,345	1,169
Production taxes	1,222	2,215
Depreciation, depletion, amortization	65,244	73,000
Accretion expense	8,170	8,032
Salaries, general and administrative	4	1,051
Incentive compensation expense
Derivative expense, net	1,221	485
Other operational expenses	22
Total operating expenses	129,981	125,339
Income (loss) from operations	88,262	103,062
Other (income) expenses:
Interest expense	8	(115)
Interest income	(37)	(1)
Other income	(502)	(401)
(Income) loss from investment in subsidiaries		239
Total other (income) expenses	(531)	(278)
Income (loss) before taxes	88,793	103,340
Provision (benefit) for income taxes:
Current
Deferred	31,965	37,202
Total income taxes	31,965	37,202
Net income	56,828	66,138
Comprehensive income	56,828	66,138
Non-Guarantor Subsidiaries
Operating revenue:
Gas production
Natural gas liquids production
Other operational income		133
Total operating revenue		133
Operating expenses:
Lease operating expenses		189
Transportation, processing and gathering expenses
Production taxes
Depreciation, depletion, amortization		98
Accretion expense		86
Salaries, general and administrative
Incentive compensation expense
Derivative expense, net
Other operational expenses
Total operating expenses		373
Income (loss) from operations		(240)
Other (income) expenses:
Income (loss) before taxes		(240)
Provision (benefit) for income taxes:
Current
Deferred
Total income taxes
Net income		(240)
Comprehensive income		(240)
Eliminations
Operating expenses:
Depreciation, depletion, amortization
Accretion expense
Other (income) expenses:
(Income) loss from investment in subsidiaries	56,828	65,898
Total other (income) expenses	56,828	65,898
Income (loss) before taxes	(56,828)	(65,898)
Provision (benefit) for income taxes:
Current
Deferred
Total income taxes
Net income	(56,828)	(65,898)
Comprehensive income	$ (56,828)	$ (65,898)

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CONDENSED CONSOLIDATED BALANCE SHEET (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012		Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 261,353		$ 279,526		$ 263,841	$ 38,451
Accounts receivable	147,336		167,288
Fair value of hedging contracts	18,712		39,655
Current income tax receivable	19,533		10,027
Deferred taxes	23,354	[1]	15,514	[1]
Inventory	4,027		4,207
Other current assets	3,587		3,626
Total current assets	477,902		519,843
Oil and gas properties, full cost method of accounting:
Proved	7,358,370		7,244,466
Less: accumulated depreciation, depletion and amortization	(5,584,698)		(5,510,166)
Net proved oil and gas properties	1,773,672		1,734,300
Unevaluated	471,457		447,795
Other property and equipment, net	22,059		22,115
Fair value of hedging contracts	6,792		9,199
Other assets, net	50,512		43,179
Total assets	2,802,394		2,776,431
Current liabilities:
Accounts payable to vendors	81,491		94,361
Undistributed oil and gas proceeds	28,904		23,414
Accrued interest	15,351		18,546
Fair value of hedging contracts	5,376		149
Asset retirement obligations	68,978		66,260
Other current liabilities	5,840		16,765
Total current liabilities	205,940		219,495
Long-term debt	917,267		914,126
Deferred taxes	336,108	[1]	310,830	[1]
Asset retirement obligations	412,706		422,042
Fair value of hedging contracts	2,997		1,530
Other long-term liabilities	33,853		36,275
Total liabilities	1,908,871		1,904,298
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; authorized 100,000,000 shares; issued 48,683,813 and 48,392,552 shares, respectively	487		484
Treasury stock (16,582 shares, at cost)	(860)		(860)
Additional paid-in capital	1,385,445		1,386,475
Accumulated deficit	(502,041)		(542,799)
Accumulated other comprehensive income	10,492		28,833
Total stockholders' equity	893,523		872,133
Total liabilities and stockholders' equity	$ 2,802,394		$ 2,776,431

[1] Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 40,758	$ 50,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	75,435	84,575
Accretion expense	8,263	8,266
Deferred income tax provision	27,024	27,439
Settlement of asset retirement obligations	(14,880)	(2,980)
Non-cash stock compensation expense	2,296	1,750
Excess tax benefits	(104)	(847)
Non-cash derivative expense	1,385	1,342
Non-cash interest expense	4,041	1,573
Change in current income taxes	(9,402)	(2,647)
(Increase) decrease in accounts receivable	19,952	(22,111)
Decrease in other current assets	40	35
Decrease in inventory	158
Increase (decrease) in accounts payable	2,004	(6,015)
Decrease in other current liabilities	(8,942)	(22,168)
Other	(1,262)	(254)
Net cash provided by (used in) operating activities	146,766	118,932
Cash flows from investing activities:
Investment in oil and gas properties	(160,968)	(106,469)
Proceeds from sale of oil and gas properties, net of expenses		403
Sale of fixed assets		134
Investment in fixed and other assets	(599)	(909)
Net cash used in investing activities	(161,567)	(106,841)
Cash flows from financing activities:
Proceeds from bank borrowings		25,000
Repayments of bank borrowings		(70,000)
Proceeds from issuance of senior convertible notes		300,000
Deferred financing costs of senior convertible notes		(8,855)
Proceeds from Sold Warrants		40,170
Payments for Purchased Call Options		(70,830)
Deferred financing costs	(11)
Excess tax benefits	104	847
Net payments for share based compensation	(3,465)	(3,033)
Net cash (used in) provided by financing activities	(3,372)	213,299
Net change in cash and cash equivalents	(18,173)	225,390
Cash and cash equivalents, beginning of period	279,526	38,451
Cash and cash equivalents, end of period	$ 261,353	$ 263,841

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Allocation of Recorded Value of Net Assets Acquired in Transaction (Detail) (USD $) In Millions, unless otherwise specified	Jun. 18, 2012
Business Acquisition [Line Items]
Proved oil and gas properties.	$ 39.2
Unevaluated oil and gas properties.	1.6
Asset retirement obligations.	(14.4)
Total fair value of net assets.	$ 26.4

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Guarantor Financial Statements (Tables)

3 Months Ended

Mar. 31, 2013

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	210,189		$	51,164		$	—	$	—		$	261,353
Accounts receivable		48,545			221,703			—		(122,912	)		147,336
Fair value of hedging contracts		—			18,712			—		—			18,712
Current income tax receivable		19,533			—			—		—			19,533
Deferred taxes *		3,387			19,967			—		—			23,354
Inventory		3,744			283			—		—			4,027
Other current assets		3,587			—			—		—			3,587
Total current assets		288,985			311,829			—		(122,912	)		477,902
Oil and gas properties, full cost method:
Proved		1,078,367			6,280,003			—		—			7,358,370
Less: accumulated DD&A		(379,399	)		(5,205,299	)		—		—			(5,584,698	)
Net proved oil and gas properties		698,968			1,074,704			—		—			1,773,672
Unevaluated		270,373			201,084			—		—			471,457
Other property and equipment, net		22,059			—			—		—			22,059
Fair value of hedging contracts		—			6,792			—		—			6,792
Other assets, net		48,951			1,561			—		—			50,512
Investment in subsidiary		774,817			—			—		(774,817	)		—
Total assets	$	2,104,153		$	1,595,970		$	—	($	897,729	)	$	2,802,394
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	182,210		$	22,193		$	—	($	122,912	)	$	81,491
Undistributed oil and gas proceeds		16,580			12,324			—		—			28,904
Accrued interest		15,351			—			—		—			15,351
Fair value of hedging contracts		—			5,376			—		—			5,376
Asset retirement obligations		—			68,978			—		—			68,978
Other current liabilities		5,522			318			—		—			5,840
Total current liabilities		219,663			109,189			—		(122,912	)		205,940
Long-term debt		917,267			—			—		—			917,267
Deferred taxes *		40,988			295,120			—		—			336,108
Asset retirement obligations		5,572			407,134			—		—			412,706
Fair value of hedging contracts		—			2,997			—		—			2,997
Other long-term liabilities		27,140			6,713			—		—			33,853
Total liabilities		1,210,630			821,153			—		(122,912	)		1,908,871
Commitments and contingencies Stockholders’ equity:
Common stock		487			—			—		—			487
Treasury stock		(860	)		—			—		—			(860	)
Additional paid-in capital		1,385,445			1,496,509			—		(1,496,509	)		1,385,445
Accumulated deficit		(502,041	)		(732,184	)		—		732,184			(502,041	)
Accumulated other comprehensive income		10,492			10,492			—		(10,492	)		10,492
Total stockholders’ equity		893,523			774,817			—		(774,817	)		893,523
Total liabilities and stockholders’ equity	$	2,104,153		$	1,595,970		$	—	($	897,729	)	$	2,802,394

* Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	228,398		$	51,128		$	—	$	—		$	279,526
Accounts receivable		59,213			108,075			—		—			167,288
Fair value of hedging contracts		—			39,655			—		—			39,655
Current income tax receivable		10,027			—			—		—			10,027
Deferred taxes *		5,947			9,567			—		—			15,514
Inventory		3,924			283			—		—			4,207
Other current assets		3,626			—			—		—			3,626
Total current assets		311,135			208,708			—		—			519,843
Oil and gas properties, full cost method:
Proved		1,004,808			6,239,658			—		—			7,244,466
Less: accumulated DD&A		(370,111	)		(5,140,055	)		—		—			(5,510,166	)
Net proved oil and gas properties		634,697			1,099,603			—		—			1,734,300
Unevaluated		254,757			193,038			—		—			447,795
Other property and equipment, net		22,115			—			—		—			22,115
Fair value of hedging contracts		—			9,199			—		—			9,199
Other assets, net		41,679			1,500			—		—			43,179
Investment in subsidiary		736,331			—			—		(736,331	)		—
Total assets	$	2,000,714		$	1,512,048		$	—	($	736,331	)	$	2,776,431
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	74,503		$	19,858		$	—	$	—		$	94,361
Undistributed oil and gas proceeds		21,841			1,573			—		—			23,414
Accrued interest		18,546			—			—		—			18,546
Fair value of hedging contracts		—			149			—		—			149
Asset retirement obligations		—			66,260			—		—			66,260
Other current liabilities		16,765			—			—		—			16,765
Total current liabilities		131,655			87,840			—		—			219,495
Long-term debt		914,126			—			—		—			914,126
Deferred taxes *		47,758			263,072			—		—			310,830
Asset retirement obligations		5,479			416,563			—		—			422,042
Fair value of hedging contracts		—			1,530			—		—			1,530
Other long-term liabilities		29,563			6,712			—		—			36,275
Total liabilities		1,128,581			775,717			—		—			1,904,298
Commitments and contingencies Stockholders’ equity:
Common stock		484			—			—		—			484
Treasury stock		(860	)		—			—		—			(860	)
Additional paid-in capital		1,386,475			1,496,510			—		(1,496,510	)		1,386,475
Accumulated deficit		(542,799	)		(789,012	)		—		789,012			(542,799	)
Accumulated other comprehensive income		28,833			28,833			—		(28,833	)		28,833
Total stockholders’ equity		872,133			736,331			—		(736,331	)		872,133
Total liabilities and stockholders’ equity	$	2,000,714		$	1,512,048		$	—	($	736,331	)	$	2,776,431

* Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside.

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Operating revenue:
Oil production	$	5,343		$	181,582		$	—	$	—		$	186,925
Gas production		7,198			29,624			—		—			36,822
Natural gas liquids production		2,299			6,879			—		—			9,178
Other operational income		649			158			—		—			807
Total operating revenue		15,489			218,243			—		—			233,732
Operating expenses:
Lease operating expenses		2,291			50,753			—		—			53,044
Transportation, processing and gathering expenses		2,052			3,345			—		—			5,397
Production taxes		867			1,222			—		—			2,089
Depreciation, depletion, amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Salaries, general and administrative		13,948			4			—		—			13,952
Incentive compensation expense		1,431			—			—		—			1,431
Derivative expense, net		—			1,221			—		—			1,221
Other operational expenses		50			22			—		—			72
Total operating expenses		30,923			129,981			—		—			160,904
Income (loss) from operations		(15,434	)		88,262			—		—			72,828
Other (income) expenses:
Interest expense		9,627			8			—		—			9,635
Interest income		(80	)		(37	)		—		—			(117	)
Other income		(224	)		(502	)		—		—			(726	)
Income from investment in subsidiaries		(56,828	)		—			—		56,828			—
Total other (income) expenses		(47,505	)		(531	)		—		56,828			8,792
Income before taxes		32,071			88,793			—		(56,828	)		64,036
Provision (benefit) for income taxes:
Current		(3,746	)		—			—		—			(3,746	)
Deferred		(4,941	)		31,965			—		—			27,024
Total income taxes		(8,687	)		31,965			—		—			23,278
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Comprehensive income	$	22,417		$	56,828		$	—	($	56,828	)	$	22,417

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,234		$	195,524		$	—		$	—		$	201,758
Gas production		5,631			23,226			—			—			28,857
Natural gas liquids production		3,864			9,588			—			—			13,452
Other operational income		694			63			133			—			890
Total operating revenue		16,423			228,401			133			—			244,957
Operating expenses:
Lease operating expenses		4,904			39,387			189			—			44,480
Transportation, processing and gathering expenses		2,488			1,169			—			—			3,657
Production taxes		1,163			2,215			—			—			3,378
Depreciation, depletion, amortization		11,477			73,000			98			—			84,575
Accretion expense		148			8,032			86			—			8,266
Salaries, general and administrative		12,654			1,051			—			—			13,705
Incentive compensation expense		1,442			—			—			—			1,442
Derivative expense, net		—			485			—			—			485
Other operational expenses		42			—			—						42
Total operating expenses		34,318			125,339			373			—			160,030
Income (loss) from operations		(17,895	)		103,062			(240	)		—			84,927
Other (income) expenses:
Interest expense		5,846			(115	)		—			—			5,731
Interest income		(30	)		(1	)		—			—			(31	)
Other income		(19	)		(401	)		—			—			(420	)
(Income) loss from investment in subsidiaries		(66,137	)		239			—			65,898			—
Total other (income) expenses		(60,340	)		(278	)		—			65,898			5,280
Income (loss) before taxes		42,445			103,340			(240	)		(65,898	)		79,647
Provision (benefit) for income taxes:
Current		1,234			—			—			—			1,234
Deferred		(9,763	)		37,202			—			—			27,439
Total income taxes		(8,529	)		37,202			—			—			28,673
Net income (loss)	$	50,974		$	66,138		($	240	)	($	65,898	)	$	50,974
Comprehensive income (loss)	$	28,909		$	66,138		($	240	)	($	65,898	)	$	28,909

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Deferred income tax provision (benefit)		(4,941	)		31,965			—		—			27,024
Settlement of asset retirement obligations		—			(14,880	)		—		—			(14,880	)
Non-cash stock compensation expense		2,296			—			—		—			2,296
Excess tax benefits		(104	)		—			—		—			(104	)
Non-cash derivative expense		—			1,385			—		—			1,385
Non-cash interest expense		4,041			—			—		—			4,041
Non-cash income from investment in subsidiaries		(56,828	)		—					56,828			—
Change in current income taxes		(9,402	)		—			—		—			(9,402	)
Change in intercompany receivables/payables		122,912			(122,912	)		—		—			—
Decrease in accounts receivable		10,668			9,284			—		—			19,952
Decrease in other current assets		40			—			—		—			40
Decrease in inventory		158			—			—		—			158
Increase (decrease) in accounts payable		(1,890	)		3,894			—		—			2,004
Increase (decrease) in other current liabilities		(20,011	)		11,069			—		—			(8,942	)
Other		(761	)		(501	)		—		—			(1,262	)
Net cash provided by operating activities		97,220			49,546			—		—			146,766
Cash flows from investing activities:
Investment in oil and gas properties		(111,458	)		(49,510	)		—		—			(160,968	)
Investment in fixed and other assets		(599	)		—			—		—			(599	)
Net cash used in investing activities		(112,057	)		(49,510	)		—		—			(161,567	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—		—			(11	)
Excess tax benefits		104			—			—		—			104
Net payments for share based compensation		(3,465	)		—			—		—			(3,465	)
Net cash used in financing activities		(3,372	)		—			—		—			(3,372	)
Net change in cash and cash equivalents		(18,209	)		36			—		—			(18,173	)
Cash and cash equivalents, beginning of period		228,398			51,128			—		—			279,526
Cash and cash equivalents, end of period	$	210,189		$	51,164		$	—	$	—		$	261,353

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	50,974		$	66,138		($	240	)	($	65,898	)	$	50,974
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		11,477			73,000			98			—			84,575
Accretion expense		148			8,032			86			—			8,266
Deferred income tax provision (benefit)		(9,763	)		37,202			—			—			27,439
Settlement of asset retirement obligations		—			(2,980	)		—			—			(2,980	)
Non-cash stock compensation expense		1,750			—			—			—			1,750
Excess tax benefits		(847	)		—			—			—			(847	)
Non-cash derivative expense		—			1,342									1,342
Non-cash interest expense		1,573			—			—			—			1,573
Non-cash income from investment in subsidiaries		(65,737	)		(161	)		—			65,898			—
Change in current income taxes		(2,647	)		—			—			—			(2,647	)
Change in intercompany receivables/payables		18,655			(18,445	)		(210	)		—			—
(Increase) decrease in accounts receivable		(983	)		(21,226	)		98			—			(22,111	)
Decrease in other current assets		35			—			—			—			35
Increase (decrease) in accounts payable		(25	)		(6,157	)		167			—			(6,015	)
Increase (decrease) in other current liabilities		(23,155	)		987			—			—			(22,168	)
Other		(254	)		—			—			—			(254	)
Net cash provided by (used in) operating activities		(18,799	)		137,732			(1	)		—			118,932
Cash flows from investing activities:
Investment in oil and gas properties		(8,767	)		(97,703	)		1			—			(106,469	)
Proceeds from sale of oil and gas properties, net of expenses		403			—			—			—			403
Sale of fixed assets		134			—			—			—			134
Investment in fixed and other assets		(909	)		—			—			—			(909	)
Net cash (used in) provided by investing activities		(9,139	)		(97,703	)		1			—			(106,841	)
Cash flows from financing activities:
Proceeds from bank borrowings		25,000			—			—			—			25,000
Repayments of bank borrowings		(70,000	)		—			—			—			(70,000	)
Proceeds from issuance of senior convertible notes		300,000			—			—			—			300,000
Deferred financing costs of senior convertible notes		(8,855	)		—			—			—			(8,855	)
Proceeds from Sold Warrants		40,170			—			—			—			40,170
Payments for Purchased Call Options		(70,830	)		—			—			—			(70,830	)
Excess tax benefits		847			—			—			—			847
Net payments for share based compensation		(3,033	)		—			—			—			(3,033	)
Net cash provided by financing activities		213,299			—			—			—			213,299
Net change in cash and cash equivalents		185,361			40,029			—			—			225,390
Cash and cash equivalents, beginning of period		37,389			926			136			—			38,451
Cash and cash equivalents, end of period	$	222,750		$	40,955		$	136		$	—		$	263,841

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Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 13.9	$ 13.5
Assets, Fair Value, Total	39.4	62.4
Liabilities, Fair Value, Total	(8.4)	(1.6)
Hedging contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, Fair Value	25.5	48.9
Derivative Liabilities, Fair Value	(8.4)	(1.6)
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	13.9	13.5
Assets, Fair Value, Total	13.9	13.5
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value, Total	25.5	48.9
Liabilities, Fair Value, Total	(8.4)	(1.6)
Significant Other Observable Inputs (Level 2) | Hedging contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, Fair Value	25.5	48.9
Derivative Liabilities, Fair Value	$ (8.4)	$ (1.6)

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Earning Per Share - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock options outstanding	347,000	372,000
Shares of common stock issued upon vesting of restricted stock	291,000	232,000
Convertible Notes Due 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Long-term debt	1.75%

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Interim Financial Statements

3 Months Ended

Mar. 31, 2013

Interim Financial Statements

Note 1 – Interim Financial Statements

The condensed consolidated financial statements of Stone Energy Corporation (“Stone”) and its subsidiaries as of March 31, 2013 and for the three-month periods ended March 31, 2013 and 2012 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The condensed consolidated balance sheet as of December 31, 2012 has been derived from the audited financial statements as of that date contained in our Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 Annual Report on Form 10-K”). The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations contained in our 2012 Annual Report on Form 10-K. The results of operations for the three-month period ended March 31, 2013 are not necessarily indicative of future financial results. Certain prior period amounts have been reclassified to conform to current period presentation.

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CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	48,683,813	48,392,552
Treasury stock, shares	16,582	16,582

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Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2013

Location and Fair Value Amounts of Derivative Instruments Reported in Balance Sheet

The following tables disclose the location and fair value amounts of derivative instruments reported in our balance sheet at March 31, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at March 31, 2013
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	18.7	Current liabilities: Fair value of hedging contracts	($	5.4	)
	Long-term assets: Fair value of hedging contracts		6.8	Long-term liabilities: Fair value of hedging contracts		(3.0	)
		$	25.5		($	8.4	)

Fair Value of Derivative Instruments at December 31, 2012
(in millions)
	Asset Derivatives			Liability Derivatives
Description	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Current assets: Fair value of hedging contracts	$	39.7	Current liabilities: Fair value of hedging contracts	($	0.1	)
	Long-term assets: Fair value of hedging contracts		9.2	Long-term liabilities: Fair value of hedging contracts		(1.5	)
		$	48.9		($	1.6	)

Effect of Derivative Instruments in Statement of Operations

The following table discloses the effect of derivative instruments in the statement of operations for the three-month periods ended March 31, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended March 31, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives (a)						Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (b)						Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013			2012			Location	2013		2012			Location	2013			2012
Commodity contracts	($	12.9	)	($	22.7	)	Operating revenue—oil/gas production	$	5.4	($	0.6	)	Derivative income (expense), net	($	1.2	)	($	0.5	)
Total	($	12.9	)	($	22.7	)		$	5.4	($	0.6	)		($	1.2	)	($	0.5	)

(a) Net of related tax effect of ($7.4) million and ($12.8) million for the three months ended March 31, 2013 and 2012, respectively.

(b) Net of related tax effect of ($3.1) million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively. For the three months ended March 31, 2013, effective hedging contracts increased oil revenue by $4.5 million and increased gas revenue by $4.0 million. For the three months ended March 31, 2012, effective hedging contracts decreased oil revenue by $5.8 million and increased gas revenue by $4.8 million.

Impact of Rights of Offset Associated with Recognized Assets and Liabilities

The following presents the potential impact of the rights of offset associated with our recognized assets and liabilities at March 31, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	18.7		($	5.7	)	$	13.0
Long-term assets: Fair value of hedging contracts		6.8			(2.0	)		4.8
Current liabilities: Fair value of hedging contracts		(5.4	)		4.7			(0.7	)
Long-term liabilities: Fair value of hedging contracts		(3.0	)		3.0			—

Hedging Positions

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of May 2, 2013:

	Fixed-Price Swaps NYMEX (except where noted)
	Natural Gas					Oil
	Daily Volume (MMBtus/d)			Swap Price ($)		Daily  Volume (Bbls/d)			Swap Price ($)
2013		10,000			4.000		2,000	(a)		92.35
2013		10,000	(b)		4.050		1,000			92.80
2013		20,000	(a)		4.450		2,000	(c)		94.05
2013		10,000			5.270		1,000			94.45
2013		10,000			5.320		1,000			94.60
2013							1,000			97.15
2013							1,000			101.53
2013							1,000			103.00
2013							1,000			103.15
2013							1,000			104.25
2013							1,000			104.47
2013							1,000			104.50
2013							1,000	(d)		107.30
2014		10,000			4.000		1,000			90.06
2014		10,000			4.040		1,000			93.55
2014		10,000			4.105		1,000			94.00
2014		10,000			4.190		1,000			98.00
2014		10,000			4.250		1,000			98.30
2014		10,000			4.350		1,000			99.65
2014							1,000	(d)		103.30
2015		10,000			4.005		1,000			90.00
2015		10,000			4.220
2015		10,000			4.255

(a) July through December

(b) April through December

(c) January through June

(d) Brent oil contract

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 02, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	SGY
Entity Registrant Name	STONE ENERGY CORP
Entity Central Index Key	0000904080
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		49,968,210

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2013

Long-Term Debt

Long-term debt consisted of the following at:

	March 31, 2013		December 31, 2012
	(in millions)
8 5/8% Senior Notes due 2017	$	375.0	$	375.0
1 3/4% Senior Convertible Notes due 2017		242.3		239.1
7 1/2% Senior Notes due 2022		300.0		300.0
Bank debt		—		—
Total long-term debt	$	917.3	$	914.1

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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating revenue:
Oil production	$ 186,925	$ 201,758
Gas production	36,822	28,857
Natural gas liquids production	9,178	13,452
Other operational income	807	890
Total operating revenue	233,732	244,957
Operating expenses:
Lease operating expenses	53,044	44,480
Transportation, processing and gathering expenses	5,397	3,657
Production taxes	2,089	3,378
Depreciation, depletion and amortization	75,435	84,575
Accretion expense	8,263	8,266
Salaries, general and administrative expenses	13,952	13,705
Incentive compensation expense	1,431	1,442
Derivative expense, net	1,221	485
Other operational expenses	72	42
Total operating expenses	160,904	160,030
Income from operations	72,828	84,927
Other (income) expenses:
Interest expense	9,635	5,731
Interest income	(117)	(31)
Other income	(726)	(420)
Total other (income) expenses	8,792	5,280
Income (loss) before taxes	64,036	79,647
Provision (benefit) for income taxes:
Current	(3,746)	1,234
Deferred	27,024	27,439
Total income taxes	23,278	28,673
Net income	$ 40,758	$ 50,974
Basic earnings per share	$ 0.82	$ 1.04
Diluted earnings per share	$ 0.82	$ 1.04
Average shares outstanding	48,619	48,254
Average shares outstanding assuming dilution	48,657	48,299

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Acquisitions

3 Months Ended

Mar. 31, 2013

Acquisitions

Note 6 – Acquisitions

In December 2012, we closed on the acquisition of an office building. The acquisition was accounted for according to the guidance provided in ASC 805, Business Combinations, which requires application of the acquisition method. This methodology requires us to record net assets acquired and consideration transferred at fair value. Differences between the net fair value of assets acquired and consideration transferred are recorded as goodwill or a bargain purchase gain. The building and land were recorded at fair value of $8.5 million. Consideration transferred in the transaction was $8.5 million in cash, with no goodwill or bargain purchase gain recorded.

On June 18, 2012, we completed the acquisition of a 25% working interest in the five block deep water Pompano field in Mississippi Canyon, an approximate 14% working interest in Mississippi Canyon Block 29 and a 10% working interest in certain aliquots of Mississippi Canyon Block 72. The acquisition was accounted for according to the guidance provided in ASC 805, Business Combinations. Consideration transferred in the transaction was $26.4 million in cash, with no goodwill or bargain purchase gain recorded. The following represents the allocation of the recorded value of net assets acquired in the transaction.

	(in millions)
Proved oil and gas properties.	$	39.2
Unevaluated oil and gas properties.		1.6
Asset retirement obligations.		(14.4	)
Total fair value of net assets.	$	26.4

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Asset Retirement Obligations

3 Months Ended

Mar. 31, 2013

Asset Retirement Obligations

Note 5 – Asset Retirement Obligations

The change in our asset retirement obligations during the three months ended March 31, 2013 is set forth below:

	Three Months Ended March  31, 2013
	(in millions)
Asset retirement obligations as of the beginning of the period, including current portion	$	488.3
Liabilities settled		(14.9	)
Accretion expense		8.3
Asset retirement obligations as of the end of the period, including current portion	$	481.7

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Calculation of Basic and Diluted Weighted Average Shares Outstanding and Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Basic:
Net income	$ 40,758	$ 50,974
Net income attributable to participating securities	(770)	(877)
Net income attributable to common stock-basic	39,988	50,097
Diluted:
Net income	40,758	50,974
Net income attributable to participating securities	(770)	(876)
Net income attributable to common stock-diluted	$ 39,988	$ 50,098
Weighted average shares (denominator):
Weighted average shares-basic	48,619	48,254
Diluted effect of stock options	38	45
Weighted average shares-diluted	48,657	48,299
Basic income per common share	$ 0.82	$ 1.04
Diluted income per common share	$ 0.82	$ 1.04

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Asset Retirement Obligations (Tables)

3 Months Ended

Mar. 31, 2013

Changes in Asset Retirement Obligations

The change in our asset retirement obligations during the three months ended March 31, 2013 is set forth below:

	Three Months Ended March  31, 2013
	(in millions)
Asset retirement obligations as of the beginning of the period, including current portion	$	488.3
Liabilities settled		(14.9	)
Accretion expense		8.3
Asset retirement obligations as of the end of the period, including current portion	$	481.7

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Guarantor Financial Statements

3 Months Ended

Mar. 31, 2013

Guarantor Financial Statements

Note 9 – Guarantor Financial Statements

Stone Offshore is an unconditional guarantor (the “Guarantor Subsidiary”) of our 2017 Convertible Notes, our 2017 Notes and our 2022 Notes. Our other subsidiaries (the “Non-Guarantor Subsidiaries”) did not provide guarantees. We have two subsidiaries that do not own any assets at this time. One of our other non-guarantor subsidiaries was merged into Stone Offshore on September 6, 2012. The following presents unaudited condensed consolidating financial information as of March 31, 2013 and December 31, 2012 and for the three-month periods ended March 31, 2013 and 2012 on an issuer (parent company), guarantor subsidiary, non-guarantor subsidiaries and consolidated basis. Elimination entries presented are necessary to combine the entities.

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	210,189		$	51,164		$	—	$	—		$	261,353
Accounts receivable		48,545			221,703			—		(122,912	)		147,336
Fair value of hedging contracts		—			18,712			—		—			18,712
Current income tax receivable		19,533			—			—		—			19,533
Deferred taxes *		3,387			19,967			—		—			23,354
Inventory		3,744			283			—		—			4,027
Other current assets		3,587			—			—		—			3,587
Total current assets		288,985			311,829			—		(122,912	)		477,902
Oil and gas properties, full cost method:
Proved		1,078,367			6,280,003			—		—			7,358,370
Less: accumulated DD&A		(379,399	)		(5,205,299	)		—		—			(5,584,698	)
Net proved oil and gas properties		698,968			1,074,704			—		—			1,773,672
Unevaluated		270,373			201,084			—		—			471,457
Other property and equipment, net		22,059			—			—		—			22,059
Fair value of hedging contracts		—			6,792			—		—			6,792
Other assets, net		48,951			1,561			—		—			50,512
Investment in subsidiary		774,817			—			—		(774,817	)		—
Total assets	$	2,104,153		$	1,595,970		$	—	($	897,729	)	$	2,802,394
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	182,210		$	22,193		$	—	($	122,912	)	$	81,491
Undistributed oil and gas proceeds		16,580			12,324			—		—			28,904
Accrued interest		15,351			—			—		—			15,351
Fair value of hedging contracts		—			5,376			—		—			5,376
Asset retirement obligations		—			68,978			—		—			68,978
Other current liabilities		5,522			318			—		—			5,840
Total current liabilities		219,663			109,189			—		(122,912	)		205,940
Long-term debt		917,267			—			—		—			917,267
Deferred taxes *		40,988			295,120			—		—			336,108
Asset retirement obligations		5,572			407,134			—		—			412,706
Fair value of hedging contracts		—			2,997			—		—			2,997
Other long-term liabilities		27,140			6,713			—		—			33,853
Total liabilities		1,210,630			821,153			—		(122,912	)		1,908,871
Commitments and contingencies Stockholders’ equity:
Common stock		487			—			—		—			487
Treasury stock		(860	)		—			—		—			(860	)
Additional paid-in capital		1,385,445			1,496,509			—		(1,496,509	)		1,385,445
Accumulated deficit		(502,041	)		(732,184	)		—		732,184			(502,041	)
Accumulated other comprehensive income		10,492			10,492			—		(10,492	)		10,492
Total stockholders’ equity		893,523			774,817			—		(774,817	)		893,523
Total liabilities and stockholders’ equity	$	2,104,153		$	1,595,970		$	—	($	897,729	)	$	2,802,394

* Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	228,398		$	51,128		$	—	$	—		$	279,526
Accounts receivable		59,213			108,075			—		—			167,288
Fair value of hedging contracts		—			39,655			—		—			39,655
Current income tax receivable		10,027			—			—		—			10,027
Deferred taxes *		5,947			9,567			—		—			15,514
Inventory		3,924			283			—		—			4,207
Other current assets		3,626			—			—		—			3,626
Total current assets		311,135			208,708			—		—			519,843
Oil and gas properties, full cost method:
Proved		1,004,808			6,239,658			—		—			7,244,466
Less: accumulated DD&A		(370,111	)		(5,140,055	)		—		—			(5,510,166	)
Net proved oil and gas properties		634,697			1,099,603			—		—			1,734,300
Unevaluated		254,757			193,038			—		—			447,795
Other property and equipment, net		22,115			—			—		—			22,115
Fair value of hedging contracts		—			9,199			—		—			9,199
Other assets, net		41,679			1,500			—		—			43,179
Investment in subsidiary		736,331			—			—		(736,331	)		—
Total assets	$	2,000,714		$	1,512,048		$	—	($	736,331	)	$	2,776,431
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	74,503		$	19,858		$	—	$	—		$	94,361
Undistributed oil and gas proceeds		21,841			1,573			—		—			23,414
Accrued interest		18,546			—			—		—			18,546
Fair value of hedging contracts		—			149			—		—			149
Asset retirement obligations		—			66,260			—		—			66,260
Other current liabilities		16,765			—			—		—			16,765
Total current liabilities		131,655			87,840			—		—			219,495
Long-term debt		914,126			—			—		—			914,126
Deferred taxes *		47,758			263,072			—		—			310,830
Asset retirement obligations		5,479			416,563			—		—			422,042
Fair value of hedging contracts		—			1,530			—		—			1,530
Other long-term liabilities		29,563			6,712			—		—			36,275
Total liabilities		1,128,581			775,717			—		—			1,904,298
Commitments and contingencies Stockholders’ equity:
Common stock		484			—			—		—			484
Treasury stock		(860	)		—			—		—			(860	)
Additional paid-in capital		1,386,475			1,496,510			—		(1,496,510	)		1,386,475
Accumulated deficit		(542,799	)		(789,012	)		—		789,012			(542,799	)
Accumulated other comprehensive income		28,833			28,833			—		(28,833	)		28,833
Total stockholders’ equity		872,133			736,331			—		(736,331	)		872,133
Total liabilities and stockholders’ equity	$	2,000,714		$	1,512,048		$	—	($	736,331	)	$	2,776,431

* Deferred income taxes have been allocated to the guarantor subsidiary where related oil and gas properties reside.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Operating revenue:
Oil production	$	5,343		$	181,582		$	—	$	—		$	186,925
Gas production		7,198			29,624			—		—			36,822
Natural gas liquids production		2,299			6,879			—		—			9,178
Other operational income		649			158			—		—			807
Total operating revenue		15,489			218,243			—		—			233,732
Operating expenses:
Lease operating expenses		2,291			50,753			—		—			53,044
Transportation, processing and gathering expenses		2,052			3,345			—		—			5,397
Production taxes		867			1,222			—		—			2,089
Depreciation, depletion, amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Salaries, general and administrative		13,948			4			—		—			13,952
Incentive compensation expense		1,431			—			—		—			1,431
Derivative expense, net		—			1,221			—		—			1,221
Other operational expenses		50			22			—		—			72
Total operating expenses		30,923			129,981			—		—			160,904
Income (loss) from operations		(15,434	)		88,262			—		—			72,828
Other (income) expenses:
Interest expense		9,627			8			—		—			9,635
Interest income		(80	)		(37	)		—		—			(117	)
Other income		(224	)		(502	)		—		—			(726	)
Income from investment in subsidiaries		(56,828	)		—			—		56,828			—
Total other (income) expenses		(47,505	)		(531	)		—		56,828			8,792
Income before taxes		32,071			88,793			—		(56,828	)		64,036
Provision (benefit) for income taxes:
Current		(3,746	)		—			—		—			(3,746	)
Deferred		(4,941	)		31,965			—		—			27,024
Total income taxes		(8,687	)		31,965			—		—			23,278
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Comprehensive income	$	22,417		$	56,828		$	—	($	56,828	)	$	22,417

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,234		$	195,524		$	—		$	—		$	201,758
Gas production		5,631			23,226			—			—			28,857
Natural gas liquids production		3,864			9,588			—			—			13,452
Other operational income		694			63			133			—			890
Total operating revenue		16,423			228,401			133			—			244,957
Operating expenses:
Lease operating expenses		4,904			39,387			189			—			44,480
Transportation, processing and gathering expenses		2,488			1,169			—			—			3,657
Production taxes		1,163			2,215			—			—			3,378
Depreciation, depletion, amortization		11,477			73,000			98			—			84,575
Accretion expense		148			8,032			86			—			8,266
Salaries, general and administrative		12,654			1,051			—			—			13,705
Incentive compensation expense		1,442			—			—			—			1,442
Derivative expense, net		—			485			—			—			485
Other operational expenses		42			—			—						42
Total operating expenses		34,318			125,339			373			—			160,030
Income (loss) from operations		(17,895	)		103,062			(240	)		—			84,927
Other (income) expenses:
Interest expense		5,846			(115	)		—			—			5,731
Interest income		(30	)		(1	)		—			—			(31	)
Other income		(19	)		(401	)		—			—			(420	)
(Income) loss from investment in subsidiaries		(66,137	)		239			—			65,898			—
Total other (income) expenses		(60,340	)		(278	)		—			65,898			5,280
Income (loss) before taxes		42,445			103,340			(240	)		(65,898	)		79,647
Provision (benefit) for income taxes:
Current		1,234			—			—			—			1,234
Deferred		(9,763	)		37,202			—			—			27,439
Total income taxes		(8,529	)		37,202			—			—			28,673
Net income (loss)	$	50,974		$	66,138		($	240	)	($	65,898	)	$	50,974
Comprehensive income (loss)	$	28,909		$	66,138		($	240	)	($	65,898	)	$	28,909

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Deferred income tax provision (benefit)		(4,941	)		31,965			—		—			27,024
Settlement of asset retirement obligations		—			(14,880	)		—		—			(14,880	)
Non-cash stock compensation expense		2,296			—			—		—			2,296
Excess tax benefits		(104	)		—			—		—			(104	)
Non-cash derivative expense		—			1,385			—		—			1,385
Non-cash interest expense		4,041			—			—		—			4,041
Non-cash income from investment in subsidiaries		(56,828	)		—					56,828			—
Change in current income taxes		(9,402	)		—			—		—			(9,402	)
Change in intercompany receivables/payables		122,912			(122,912	)		—		—			—
Decrease in accounts receivable		10,668			9,284			—		—			19,952
Decrease in other current assets		40			—			—		—			40
Decrease in inventory		158			—			—		—			158
Increase (decrease) in accounts payable		(1,890	)		3,894			—		—			2,004
Increase (decrease) in other current liabilities		(20,011	)		11,069			—		—			(8,942	)
Other		(761	)		(501	)		—		—			(1,262	)
Net cash provided by operating activities		97,220			49,546			—		—			146,766
Cash flows from investing activities:
Investment in oil and gas properties		(111,458	)		(49,510	)		—		—			(160,968	)
Investment in fixed and other assets		(599	)		—			—		—			(599	)
Net cash used in investing activities		(112,057	)		(49,510	)		—		—			(161,567	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—		—			(11	)
Excess tax benefits		104			—			—		—			104
Net payments for share based compensation		(3,465	)		—			—		—			(3,465	)
Net cash used in financing activities		(3,372	)		—			—		—			(3,372	)
Net change in cash and cash equivalents		(18,209	)		36			—		—			(18,173	)
Cash and cash equivalents, beginning of period		228,398			51,128			—		—			279,526
Cash and cash equivalents, end of period	$	210,189		$	51,164		$	—	$	—		$	261,353

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	50,974		$	66,138		($	240	)	($	65,898	)	$	50,974
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		11,477			73,000			98			—			84,575
Accretion expense		148			8,032			86			—			8,266
Deferred income tax provision (benefit)		(9,763	)		37,202			—			—			27,439
Settlement of asset retirement obligations		—			(2,980	)		—			—			(2,980	)
Non-cash stock compensation expense		1,750			—			—			—			1,750
Excess tax benefits		(847	)		—			—			—			(847	)
Non-cash derivative expense		—			1,342									1,342
Non-cash interest expense		1,573			—			—			—			1,573
Non-cash income from investment in subsidiaries		(65,737	)		(161	)		—			65,898			—
Change in current income taxes		(2,647	)		—			—			—			(2,647	)
Change in intercompany receivables/payables		18,655			(18,445	)		(210	)		—			—
(Increase) decrease in accounts receivable		(983	)		(21,226	)		98			—			(22,111	)
Decrease in other current assets		35			—			—			—			35
Increase (decrease) in accounts payable		(25	)		(6,157	)		167			—			(6,015	)
Increase (decrease) in other current liabilities		(23,155	)		987			—			—			(22,168	)
Other		(254	)		—			—			—			(254	)
Net cash provided by (used in) operating activities		(18,799	)		137,732			(1	)		—			118,932
Cash flows from investing activities:
Investment in oil and gas properties		(8,767	)		(97,703	)		1			—			(106,469	)
Proceeds from sale of oil and gas properties, net of expenses		403			—			—			—			403
Sale of fixed assets		134			—			—			—			134
Investment in fixed and other assets		(909	)		—			—			—			(909	)
Net cash (used in) provided by investing activities		(9,139	)		(97,703	)		1			—			(106,841	)
Cash flows from financing activities:
Proceeds from bank borrowings		25,000			—			—			—			25,000
Repayments of bank borrowings		(70,000	)		—			—			—			(70,000	)
Proceeds from issuance of senior convertible notes		300,000			—			—			—			300,000
Deferred financing costs of senior convertible notes		(8,855	)		—			—			—			(8,855	)
Proceeds from Sold Warrants		40,170			—			—			—			40,170
Payments for Purchased Call Options		(70,830	)		—			—			—			(70,830	)
Excess tax benefits		847			—			—			—			847
Net payments for share based compensation		(3,033	)		—			—			—			(3,033	)
Net cash provided by financing activities		213,299			—			—			—			213,299
Net change in cash and cash equivalents		185,361			40,029			—			—			225,390
Cash and cash equivalents, beginning of period		37,389			926			136			—			38,451
Cash and cash equivalents, end of period	$	222,750		$	40,955		$	136		$	—		$	263,841

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Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Note 7 – Fair Value Measurements

U.S. Generally Accepted Accounting Principles establish a fair value hierarchy that has three levels based on the reliability of the inputs used to determine the fair value. These levels include: Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2013 and December 31, 2012, we held certain financial assets and liabilities that are required to be measured at fair value on a recurring basis, including our commodity derivative instruments and our investments in marketable securities. We utilize the services of an independent third party to assist us in valuing our derivative instruments. We used the income approach in determining the fair value of our derivative instruments utilizing a proprietary pricing model. The model accounts for our credit risk and the credit risk of our counterparties in the discount rate applied to estimated future cash inflows and outflows. Our swap contracts are included within the Level 2 fair value hierarchy. For a more detailed description of our derivative instruments, see Note 3 – Derivative Instruments and Hedging Activities. We used the market approach in determining the fair value of our investments in marketable securities, which are included within the Level 1 fair value hierarchy.

The following tables present our assets and liabilities that are measured at fair value on a recurring basis at March 31, 2013:

	Fair Value Measurements at March 31, 2013
Assets	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Marketable securities	$	13.9		$	13.9	$	—		$	—
Hedging contracts		25.5			—		25.5			—
Total	$	39.4		$	13.9	$	25.5		$	—
	Fair Value Measurements at March 31, 2013
Liabilities	Total			Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Hedging contracts	($	8.4	)	$	—	($	8.4	)	$	—
Total	($	8.4	)	$	—	($	8.4	)	$	—

The following tables present our assets and liabilities that are measured at fair value on a recurring basis at December 31, 2012:

	Fair Value Measurements at December 31, 2012
Assets	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Marketable securities	$	13.5		$	13.5	$	—		$	—
Hedging contracts		48.9			—		48.9			—
Total	$	62.4		$	13.5	$	48.9		$	—
	Fair Value Measurements at December 31, 2012
Liabilities	Total			Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Hedging contracts	($	1.6	)	$	—	($	1.6	)	$	—
Total	($	1.6	)	$	—	($	1.6	)	$	—

The fair value of cash and cash equivalents and our variable-rate bank debt approximated book value at March 31, 2013 and December 31, 2012. As of March 31, 2013 and December 31, 2012, the fair value of our 2017 Notes was approximately $403.1 million and $401.3 million, respectively. As of March 31, 2013 and December 31, 2012, the fair value of the liability component of our 2017 Convertible Notes was approximately $265.9 million and $249.6 million, respectively. As of March 31, 2013 and December 31, 2012, the fair value of our 2022 Notes was approximately $324.8 million and $314.3 million, respectively.

The fair value of our 2017 Notes and the fair value of our 2022 Notes were determined based upon quotes obtained from brokers, which represent Level 2 inputs. We applied fair value concepts in determining the liability component of our 2017 Convertible Notes (see Note 4 – Long-Term Debt) at inception, March 31, 2013 and December 31, 2012. The fair value of the liability was estimated using an income approach. The significant inputs in these determinations were market interest rates based on quotes obtained from brokers and represent Level 2 inputs.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies

Note 8 – Commitments and Contingencies

We are named as a defendant in certain lawsuits and are a party to certain regulatory proceedings arising in the ordinary course of business. We do not expect that these matters, individually or in the aggregate, will have a material adverse effect on our financial condition.

Franchise Tax Action. We have been served with several petitions filed by the Louisiana Department of Revenue (“LDR”) in Louisiana state court claiming additional franchise taxes due. In addition, we received preliminary assessments from the LDR for additional franchise taxes resulting from audits of Stone and other subsidiaries. These assessments all relate to the LDR’s assertion that sales of crude oil and natural gas from properties located on the Outer Continental Shelf (“OCS”), which are transported through the State of Louisiana, should be sourced to the State of Louisiana for purposes of computing the Louisiana franchise tax apportionment ratio. We disagree with these contentions and are defending ourselves against these claims. Total asserted claims plus estimated accrued interest amount to approximately $29.9 million. The franchise tax years 2010, 2011 and 2012 for Stone remain subject to examination, which potentially exposes us to additional estimated assessments of $2.5 million including accrued interest. We estimate the potential range of loss upon resolution of this matter to be between $0 and $32.4 million.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Calculation of Basic and Diluted Weighted Average Shares Outstanding Earnings Per Share

The following table sets forth the calculation of basic and diluted weighted average shares outstanding and earnings per share for the indicated periods.

	Three Months Ended March 31,
	2013			2012
	(in thousands, except per share data)
Income (numerator):
Basic:
Net income	$	40,758		$	50,974
Net income attributable to participating securities		(770	)		(877	)
Net income attributable to common stock—basic	$	39,988		$	50,097
Diluted:
Net income	$	40,758		$	50,974
Net income attributable to participating securities		(770	)		(876	)
Net income attributable to common stock—diluted	$	39,988		$	50,098
Weighted average shares (denominator):
Weighted average shares—basic		48,619			48,254
Diluted effect of stock options		38			45
Weighted average shares—diluted		48,657			48,299
Basic income per common share	$	0.82		$	1.04
Diluted income per common share	$	0.82		$	1.04

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Acquisitions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Jun. 18, 2012
Business Acquisition [Line Items]
Fair value of Land and Building at the time of Acquisition	$ 8.5
Purchase Consideration	8.5
Cash consideration transferred		$ 26.4
Block Deep Water Pompano Field Mississippi Canyon
Business Acquisition [Line Items]
Percentage of working interest acquired		25.00%
Mississippi Canyon Block 29
Business Acquisition [Line Items]
Percentage of working interest acquired		14.00%
Mississippi Canyon Block 72
Business Acquisition [Line Items]
Percentage of working interest acquired		10.00%

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of Assets And Liabilities Measured at Fair Value Recurring Basis

The following tables present our assets and liabilities that are measured at fair value on a recurring basis at March 31, 2013:

	Fair Value Measurements at March 31, 2013
Assets	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Marketable securities	$	13.9		$	13.9	$	—		$	—
Hedging contracts		25.5			—		25.5			—
Total	$	39.4		$	13.9	$	25.5		$	—
	Fair Value Measurements at March 31, 2013
Liabilities	Total			Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Hedging contracts	($	8.4	)	$	—	($	8.4	)	$	—
Total	($	8.4	)	$	—	($	8.4	)	$	—

The following tables present our assets and liabilities that are measured at fair value on a recurring basis at December 31, 2012:

	Fair Value Measurements at December 31, 2012
Assets	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Marketable securities	$	13.5		$	13.5	$	—		$	—
Hedging contracts		48.9			—		48.9			—
Total	$	62.4		$	13.5	$	48.9		$	—
	Fair Value Measurements at December 31, 2012
Liabilities	Total			Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Hedging contracts	($	1.6	)	$	—	($	1.6	)	$	—
Total	($	1.6	)	$	—	($	1.6	)	$	—

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Location and Fair Value Amounts of Derivative Instruments Reported in Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	$ (5.4)
Long-term liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(3.0)
Current Asset
Asset Derivatives
Fair Value of Derivative Instruments, Assets	18.7
Long-term assets
Asset Derivatives
Fair Value of Derivative Instruments, Assets	6.8
Commodity Contracts
Asset Derivatives
Fair Value of Derivative Instruments, Assets	25.5	48.9
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(8.4)	(1.6)
Commodity Contracts | Current liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(5.4)	(0.1)
Commodity Contracts | Long-term liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(3.0)	(1.5)
Commodity Contracts | Current Asset
Asset Derivatives
Fair Value of Derivative Instruments, Assets	18.7	39.7
Commodity Contracts | Long-term assets
Asset Derivatives
Fair Value of Derivative Instruments, Assets	$ 6.8	$ 9.2

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Condensed Consolidating Statement of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 40,758	$ 50,974
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	75,435	84,575
Accretion expense	8,263	8,266
Deferred income tax provision (benefit)	27,024	27,439
Settlement of asset retirement obligations	(14,880)	(2,980)
Non-cash stock compensation expense	2,296	1,750
Excess tax benefits	(104)	(847)
Non-cash derivative expense	1,385	1,342
Non-cash interest expense	4,041	1,573
Non-cash income from investment in subsidiaries
Change in current income taxes	(9,402)	(2,647)
Change in intercompany receivables/payables
(Increase) decrease in accounts receivable	19,952	(22,111)
Decrease in other current assets	40	35
Decrease in inventory	158
Increase (decrease) in accounts payable	2,004	(6,015)
Increase (decrease) in other current liabilities	(8,942)	(22,168)
Other	(1,262)	(254)
Net cash provided by (used in) operating activities	146,766	118,932
Cash flows from investing activities:
Investment in oil and gas properties	(160,968)	(106,469)
Proceeds from sale of oil and gas properties, net of expenses		403
Sale of fixed assets		134
Investment in fixed and other assets	(599)	(909)
Net cash (used in) provided by investing activities	(161,567)	(106,841)
Cash flows from financing activities:
Proceeds from bank borrowings		25,000
Deferred financing costs	(11)
Repayments of bank borrowings		(70,000)
Proceeds from issuance of senior convertible notes		300,000
Deferred financing costs of senior convertible notes		(8,855)
Proceeds from Sold Warrants		40,170
Payments for Purchased Call Options		(70,830)
Excess tax benefits	104	847
Net payments for share based compensation	(3,465)	(3,033)
Net cash provided by financing activities	(3,372)	213,299
Net change in cash and cash equivalents	(18,173)	225,390
Cash and cash equivalents, beginning of period	279,526	38,451
Cash and cash equivalents, end of period	261,353	263,841
Parent
Cash flows from operating activities:
Net income	40,758	50,974
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	10,191	11,477
Accretion expense	93	148
Deferred income tax provision (benefit)	(4,941)	(9,763)
Settlement of asset retirement obligations
Non-cash stock compensation expense	2,296	1,750
Excess tax benefits	(104)	(847)
Non-cash interest expense	4,041	1,573
Non-cash income from investment in subsidiaries	(56,828)	(65,737)
Change in current income taxes	(9,402)	(2,647)
Change in intercompany receivables/payables	122,912	18,655
(Increase) decrease in accounts receivable	10,668	(983)
Decrease in other current assets	40	35
Decrease in inventory	158
Increase (decrease) in accounts payable	(1,890)	(25)
Increase (decrease) in other current liabilities	(20,011)	(23,155)
Other	(761)	(254)
Net cash provided by (used in) operating activities	97,220	(18,799)
Cash flows from investing activities:
Investment in oil and gas properties	(111,458)	(8,767)
Proceeds from sale of oil and gas properties, net of expenses		403
Sale of fixed assets		134
Investment in fixed and other assets	(599)	(909)
Net cash (used in) provided by investing activities	(112,057)	(9,139)
Cash flows from financing activities:
Proceeds from bank borrowings		25,000
Deferred financing costs	(11)
Repayments of bank borrowings		(70,000)
Proceeds from issuance of senior convertible notes		300,000
Deferred financing costs of senior convertible notes		(8,855)
Proceeds from Sold Warrants		40,170
Payments for Purchased Call Options		(70,830)
Excess tax benefits	104	847
Net payments for share based compensation	(3,465)	(3,033)
Net cash provided by financing activities	(3,372)	213,299
Net change in cash and cash equivalents	(18,209)	185,361
Cash and cash equivalents, beginning of period	228,398	37,389
Cash and cash equivalents, end of period	210,189	222,750
Guarantor Subsidiary
Cash flows from operating activities:
Net income	56,828	66,138
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	65,244	73,000
Accretion expense	8,170	8,032
Deferred income tax provision (benefit)	31,965	37,202
Settlement of asset retirement obligations	(14,880)	(2,980)
Non-cash stock compensation expense
Excess tax benefits
Non-cash derivative expense	1,385	1,342
Non-cash interest expense
Non-cash income from investment in subsidiaries		(161)
Change in current income taxes
Change in intercompany receivables/payables	(122,912)	(18,445)
(Increase) decrease in accounts receivable	9,284	(21,226)
Decrease in other current assets
Increase (decrease) in accounts payable	3,894	(6,157)
Increase (decrease) in other current liabilities	11,069	987
Other	(501)
Net cash provided by (used in) operating activities	49,546	137,732
Cash flows from investing activities:
Investment in oil and gas properties	(49,510)	(97,703)
Proceeds from sale of oil and gas properties, net of expenses
Sale of fixed assets
Investment in fixed and other assets
Net cash (used in) provided by investing activities	(49,510)	(97,703)
Cash flows from financing activities:
Proceeds from bank borrowings
Deferred financing costs
Repayments of bank borrowings
Proceeds from issuance of senior convertible notes
Deferred financing costs of senior convertible notes
Proceeds from Sold Warrants
Payments for Purchased Call Options
Excess tax benefits
Net payments for share based compensation
Net cash provided by financing activities
Net change in cash and cash equivalents	36	40,029
Cash and cash equivalents, beginning of period	51,128	926
Cash and cash equivalents, end of period	51,164	40,955
Non-Guarantor Subsidiaries
Cash flows from operating activities:
Net income		(240)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		98
Accretion expense		86
Deferred income tax provision (benefit)
Settlement of asset retirement obligations
Non-cash stock compensation expense
Excess tax benefits
Non-cash derivative expense
Non-cash interest expense
Non-cash income from investment in subsidiaries
Change in current income taxes
Change in intercompany receivables/payables		(210)
(Increase) decrease in accounts receivable		98
Decrease in other current assets
Decrease in inventory
Increase (decrease) in accounts payable		167
Increase (decrease) in other current liabilities
Other
Net cash provided by (used in) operating activities		(1)
Cash flows from investing activities:
Investment in oil and gas properties		1
Proceeds from sale of oil and gas properties, net of expenses
Sale of fixed assets
Investment in fixed and other assets
Net cash (used in) provided by investing activities		1
Cash flows from financing activities:
Proceeds from bank borrowings
Deferred financing costs
Repayments of bank borrowings
Proceeds from issuance of senior convertible notes
Deferred financing costs of senior convertible notes
Proceeds from Sold Warrants
Payments for Purchased Call Options
Excess tax benefits
Net payments for share based compensation
Net cash provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of period		136
Cash and cash equivalents, end of period		136
Eliminations
Cash flows from operating activities:
Net income	(56,828)	(65,898)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization
Accretion expense
Deferred income tax provision (benefit)
Settlement of asset retirement obligations
Non-cash stock compensation expense
Excess tax benefits
Non-cash derivative expense
Non-cash interest expense
Non-cash income from investment in subsidiaries	56,828	65,898
Change in current income taxes
Change in intercompany receivables/payables
(Increase) decrease in accounts receivable
Decrease in other current assets
Decrease in inventory
Increase (decrease) in accounts payable
Increase (decrease) in other current liabilities
Other
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Investment in oil and gas properties
Proceeds from sale of oil and gas properties, net of expenses
Sale of fixed assets
Investment in fixed and other assets
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Proceeds from bank borrowings
Deferred financing costs
Repayments of bank borrowings
Proceeds from issuance of senior convertible notes
Deferred financing costs of senior convertible notes
Proceeds from Sold Warrants
Payments for Purchased Call Options
Excess tax benefits
Net payments for share based compensation
Net cash provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net income	$ 40,758	$ 50,974
Other comprehensive loss, net of tax effect:
Adjustment for fair value accounting of derivatives	(18,341)	(22,065)
Comprehensive income	$ 22,417	$ 28,909

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Long-Term Debt

3 Months Ended

Mar. 31, 2013

Long-Term Debt

Note 4 – Long-Term Debt

Long-term debt consisted of the following at:

	March 31, 2013		December 31, 2012
	(in millions)
8 5/8% Senior Notes due 2017	$	375.0	$	375.0
1 3/4% Senior Convertible Notes due 2017		242.3		239.1
7 1/2% Senior Notes due 2022		300.0		300.0
Bank debt		—		—
Total long-term debt	$	917.3	$	914.1

Bank Debt

On April 26, 2011, we entered into an amended and restated revolving credit facility with commitments totaling $700 million (subject to borrowing base limitations) through a syndicated bank group, replacing our previous facility. Our bank credit facility matures on April 26, 2015. On April 30, 2013, the bank group reaffirmed our existing borrowing base at $400 million. As of March 31 and May 2, 2013, we had no outstanding borrowings under our bank credit facility and letters of credit totaling $21.0 million had been issued pursuant to the facility, leaving $379.0 million of availability under the facility.

The borrowing base under our bank credit facility is redetermined semi-annually, in May and November, by the lenders taking into consideration the estimated value of our oil and gas properties and those of our direct and indirect material subsidiaries in accordance with the lenders’ customary practices for oil and gas loans. In addition, we and the lenders each have discretion at any time, but not more than two additional times in any calendar year, to have the borrowing base redetermined. Our bank credit facility is guaranteed by our only material subsidiary, Stone Energy Offshore, L.L.C. (“Stone Offshore”). Our bank credit facility is collateralized by substantially all of Stone’s and Stone Offshore’s assets. Stone and Stone Offshore are required to mortgage, and grant a security interest in, their oil and gas reserves representing at least 80% of the discounted present value of the future net cash flows from their oil and gas reserves reviewed in determining the borrowing base. At Stone’s option, loans under our bank credit facility will bear interest at a rate based on the adjusted London Interbank Offering Rate (“Libor”) plus an applicable margin, or a rate based on the prime rate or federal funds rate plus an applicable margin. Our bank credit facility provides for optional and mandatory prepayments, affirmative and negative covenants, and interest coverage ratio and leverage ratio maintenance covenants. We were in compliance with all covenants as of March 31, 2013.

Senior Convertible Notes

On March 6, 2012, we issued in a private offering $300 million in aggregate principal amount of the 2017 Convertible Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The 2017 Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on an initial conversion rate of 23.4449 shares of our common stock per $1,000 principal amount of 2017 Convertible Notes, which corresponds to an initial conversion price of approximately $42.65 per share of our common stock. On March 28, 2013, our closing share price was $21.75. The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the indenture related to the 2017 Convertible Notes. Upon conversion, we will be obligated to pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. Prior to December 1, 2016, the 2017 Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date.

In connection with the offering, we entered into convertible note hedge transactions with respect to our common stock (the “Purchased Call Options”) with Barclays Capital Inc., acting as agent for Barclays Bank PLC, and Bank of America, N.A. (the “Dealers”). We paid an aggregate amount of approximately $70.8 million to the Dealers for the Purchased Call Options. The Purchased Call Options cover, subject to customary antidilution adjustments, approximately 7,033,470 shares of our common stock at a strike price that corresponds to the initial conversion price of the 2017 Convertible Notes, also subject to adjustment, and are exercisable upon conversion of the 2017 Convertible Notes.

We also entered into separate warrant transactions whereby, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, we sold to the Dealers warrants to acquire, subject to customary antidilution adjustments, approximately 7,033,470 shares of our common stock (the “Sold Warrants”) at a strike price of $55.91 per share of common stock. We received aggregate proceeds of approximately $40.1 million from the sale of the Sold Warrants to the Dealers. If, upon expiration of the Sold Warrants, the price per share of our common stock, as measured under the Sold Warrants, is greater than the strike price of the Sold Warrants, we will be required to issue, without further consideration, under each Sold Warrant a number of shares of our common stock with a value equal to the amount of such difference.

The estimated liability and equity components of this offering were recorded in accordance with Accounting Standards Codification (“ASC”) 470-20. The initial carrying amount of the liability component of $229.2 million was determined by measuring the fair value of a similar liability that does not have an associated equity component. An effective market interest rate of 7.51% was used in the fair value determination. The carrying amount of the equity component of $70.8 million was determined by deducting the fair value of the liability component from the initial proceeds from the 2017 Convertible Notes. Transaction costs of approximately $8.9 million were allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance and equity issuance costs, respectively. The cost of the convertible note hedge of $70.8 million and proceeds from the warrant transaction of $40.1 million were recorded as adjustments to equity.

As of March 31, 2013, the carrying amount of the liability component of the 2017 Convertible Notes was $242.3 million. During the three months ended March 31, 2013, we recognized $3.1 million of interest expense for the amortization of the discount and $0.3 million of interest expense for the amortization of deferred financing costs related to the 2017 Convertible Notes. During the three months ended March 31, 2013, we recognized $1.3 million of interest expense related to the contractual interest coupon on the 2017 Convertible Notes.

Senior Notes

During the three months ended March 31, 2013, we recognized $0.4 million of interest expense for the amortization of net deferred financing costs related to the 8 ⁵/₈% Senior Notes due 2017 (the “2017 Notes”). During the three months ended March 31, 2013, we recognized $8.1 million of interest expense related to the contractual interest coupon on the 2017 Notes.

During the three months ended March 31, 2013, we recognized $0.2 million of interest expense for the amortization of net deferred financing costs related to the 7 ¹/₂% Senior Notes due 2022 (the “2022 Notes”). During the three months ended March 31, 2013, we recognized $5.6 million of interest expense related to the contractual interest coupon on the 2022 Notes.

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Effect of Derivative Instruments in Statement of Operations (Detail) (Cash Flow Hedging, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion, Net, Total	$ (12.9)	[1]	$ (22.7)	[1]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net, Total	5.4	[2]	(0.6)	[2]
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net, Total	(1.2)		(0.5)
Commodity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion, Net, Total	(12.9)	[1]	(22.7)	[1]
Derivative income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net, Total	(1.2)		(0.5)
Operating revenue - oil/gas production
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net, Total	$ 5.4	[2]	$ (0.6)	[2]

[1] Net of related tax effect of ($7.4) million and ($12.8) million for the three months ended March 31, 2013 and 2012, respectively.

[2] Net of related tax effect of ($3.1) million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively. For the three months ended March 31, 2013, effective hedging contracts increased oil revenue by $4.5 million and increased gas revenue by $4.0 million. For the three months ended March 31, 2012, effective hedging contracts decreased oil revenue by $5.8 million and increased gas revenue by $4.8 million.

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Commitments and Contingencies Disclosure [Line Items]
Approximate asserted claims plus accrued interest assessed by Louisiana Department of Revenue	$ 29.9
Additional estimated assessments including interest by Louisiana Department of Revenue	2.5
Minimum potential range contingency loss	0
Maximum potential range contingency loss	$ 32.4

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2013

Allocation of Recorded Value of Net Assets Acquired in Transaction

The following represents the allocation of the recorded value of net assets acquired in the transaction.

	(in millions)
Proved oil and gas properties.	$	39.2
Unevaluated oil and gas properties.		1.6
Asset retirement obligations.		(14.4	)
Total fair value of net assets.	$	26.4