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 June 30, 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 August 5, 2013, there were 50,009,410 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 June 30, 2013 and December 31, 2012		1
Condensed Consolidated Statement of Operations for the Three and Six Months Ended June  30, 2013 and 2012		2
Condensed Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June  30, 2013 and 2012		3
Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 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		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk		29
Item 4. Controls and Procedures		29
PART II – OTHER INFORMATION
Item 1. Legal Proceedings		29
Item 1A. Risk Factors		30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 6. Exhibits		32
Signature		33

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

STONE ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

	June 30,			December 31,
	2013			2012
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	226,372		$	279,526
Accounts receivable		166,150			167,288
Fair value of hedging contracts		30,053			39,655
Current income tax receivable		26,530			10,027
Deferred taxes		15,653			15,514
Inventory		4,006			4,207
Other current assets		3,872			3,626
Total current assets		472,636			519,843
Oil and gas properties, full cost method of accounting:
Proved		7,478,481			7,244,466
Less: accumulated depreciation, depletion and amortization		(5,671,005	)		(5,510,166	)
Net proved oil and gas properties		1,807,476			1,734,300
Unevaluated		534,979			447,795
Other property and equipment, net		22,517			22,115
Fair value of hedging contracts		13,221			9,199
Other assets, net		55,066			43,179
Total assets	$	2,905,895		$	2,776,431
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	93,965		$	94,361
Undistributed oil and gas proceeds		27,280			23,414
Accrued interest		18,059			18,546
Fair value of hedging contracts		1,880			149
Asset retirement obligations		63,646			66,260
Other current liabilities		9,705			16,765
Total current liabilities		214,535			219,495
Long-term debt		920,485			914,126
Deferred taxes		366,077			310,830
Asset retirement obligations		420,417			422,042
Fair value of hedging contracts		436			1,530
Other long-term liabilities		32,909			36,275
Total liabilities		1,954,859			1,904,298
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value; authorized 100,000,000 shares; issued 48,728,810 and 48,392,552 shares, respectively		487			484
Treasury stock (16,582 shares, at cost)		(860	)		(860	)
Additional paid-in capital		1,389,898			1,386,475
Accumulated deficit		(463,019	)		(542,799	)
Accumulated other comprehensive income		24,530			28,833
Total stockholders’ equity		951,036			872,133
Total liabilities and stockholders’ equity	$	2,905,895		$	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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Operating revenue:
Oil production	$	184,498		$	182,181		$	371,423		$	383,939
Gas production		47,832			28,146			84,654			57,003
Natural gas liquids production		11,200			9,866			20,378			23,318
Other operational income		979			952			1,786			1,842
Derivative income, net		1,368			5,416			147			4,931
Total operating revenue		245,877			226,561			478,388			471,033
Operating expenses:
Lease operating expenses		50,517			51,555			103,561			96,035
Transportation, processing and gathering expenses		8,896			5,492			14,293			9,149
Production taxes		4,091			2,358			6,180			5,736
Depreciation, depletion and amortization		87,209			87,133			162,644			171,708
Accretion expense		8,318			8,255			16,581			16,521
Salaries, general and administrative expenses		15,198			13,143			29,150			26,848
Incentive compensation expense		2,050			2,398			3,481			3,840
Other operational expenses		73			71			145			113
Total operating expenses		176,352			170,405			336,035			329,950
Income from operations		69,525			56,156			142,353			141,083
Other (income) expenses:
Interest expense		8,895			7,684			18,530			13,415
Interest income		(115	)		(79	)		(232	)		(110	)
Other income		(682	)		(366	)		(1,408	)		(786	)
Total other expenses		8,098			7,239			16,890			12,519
Income before income taxes		61,427			48,917			125,463			128,564
Provision (benefit) for income taxes:
Current		(6,993	)		(665	)		(10,739	)		569
Deferred		29,398			19,035			56,422			46,474
Total income taxes		22,405			18,370			45,683			47,043
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Basic earnings per share	$	0.78		$	0.62		$	1.60		$	1.65
Diluted earnings per share	$	0.78		$	0.62		$	1.60		$	1.65
Average shares outstanding		48,687			48,303			48,653			48,279
Average shares outstanding assuming dilution		48,725			48,344			48,691			48,322

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 June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Net income	$	39,022		$	30,547	$	79,780		$	81,521
Other comprehensive income (loss), net of tax effect:
Derivatives		14,561			63,202		(3,780	)		41,137
Foreign currency items		(523	)		—		(523	)		—
Comprehensive income	$	53,060		$	93,749	$	75,477		$	122,658

The accompanying notes are an integral part of this statement.

3

STONE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net income	$	79,780		$	81,521
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		162,644			171,708
Accretion expense		16,581			16,521
Deferred income tax provision		56,422			46,474
Settlement of asset retirement obligations		(37,335	)		(21,918	)
Non-cash stock compensation expense		4,866			4,271
Excess tax benefits		(104	)		(795	)
Non-cash derivative (income) expense		311			(2,758	)
Non-cash interest expense		8,181			5,278
Change in current income taxes		(16,399	)		(3,921	)
(Increase) decrease in accounts receivable		1,138			(37,517	)
Increase in other current assets		(245	)		(124	)
Decrease in inventory		158			36
Increase in accounts payable		6,593			8,413
Decrease in other current liabilities		(3,170	)		(17,304	)
Other		(3,448	)		(465	)
Net cash provided by operating activities		275,973			249,420
Cash flows from investing activities:
Investment in oil and gas properties		(320,218	)		(275,813	)
Proceeds from sale of oil and gas properties, net of expenses		—			403
Sale of fixed assets		—			149
Investment in fixed and other assets		(1,711	)		(1,900	)
Change in restricted funds		(3,515	)		—
Net cash used in investing activities		(325,444	)		(277,161	)
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			795
Net payments for share based compensation		(3,590	)		(3,141	)
Net cash (used in) provided by financing activities		(3,497	)		213,139
Effect of exchange rate changes on cash		(186	)		—
Net change in cash and cash equivalents		(53,154	)		185,398
Cash and cash equivalents, beginning of period		279,526			38,451
Cash and cash equivalents, end of period	$	226,372		$	223,849

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 June 30, 2013 and for the three and six-month periods ended June 30, 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 and six-month periods ended June 30, 2013 are not necessarily indicative of future financial results.

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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share data)
Income (numerator):
Basic:
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Net income attributable to participating securities		(1,015	)		(734	)		(1,794	)		(1,681	)
Net income attributable to common stock—basic	$	38,007		$	29,813		$	77,986		$	79,840
Diluted:
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Net income attributable to participating securities		(1,015	)		(733	)		(1,793	)		(1,680	)
Net income attributable to common stock—diluted	$	38,007		$	29,814		$	77,987		$	79,841
Weighted average shares (denominator):
Weighted average shares—basic		48,687			48,303			48,653			48,279
Diluted effect of stock options		38			41			38			43
Weighted average shares—diluted		48,725			48,344			48,691			48,322
Basic earnings per share	$	0.78		$	0.62		$	1.60		$	1.65
Diluted earnings per share	$	0.78		$	0.62		$	1.60		$	1.65

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 333,000 and 369,000 shares during the three and six-month periods ended June 30, 2013 and 2012, respectively.

During the three months ended June 30, 2013 and 2012, respectively, approximately 45,000 and 23,000 shares of common stock were issued from authorized shares upon the vesting (lapse of forfeiture restrictions) of restricted stock by employees and nonemployee directors. During the six months ended June 30, 2013 and 2012, respectively, approximately 336,000 and 255,000 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 stockholders’ 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 June 30, 2013 and December 31, 2012 were designated as effective cash flow hedges; however, during the three and six-month periods ended June 30, 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 June 30, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at June 30, 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	$	30.1	Current liabilities: Fair value of hedging contracts		($1.9	)
	Long-term assets: Fair value of hedging contracts		13.2	Long-term liabilities: Fair value of hedging contracts		(0.4	)
		$	43.3			($2.3	)
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 tables disclose the effect of derivative instruments in the statement of operations for the three and six-month periods ended June 30, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended June 30, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives				Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013		2012		Location	2013		2012		Location	2013		2012
Commodity contracts	$	30.0	$	108.1	Operating revenue— oil/gas production	$	7.3	$	9.4	Derivative income, net	$	1.4	$	5.4
Total	$	30.0	$	108.1		$	7.3	$	9.4		$	1.4	$	5.4

(a) For the three months ended June 30, 2013, effective hedging contracts increased oil revenue by $5.3 million and increased gas revenue by $2.0 million. For the three months ended June 30, 2012, effective hedging contracts increased oil revenue by $2.9 million and increased gas revenue by $6.5 million.

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended June 30, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives				Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013		2012		Location	2013		2012		Location	2013		2012
Commodity contracts	$	9.9	$	72.6	Operating revenue— oil/gas production	$	15.9	$	8.4	Derivative income, net	$	0.1	$	4.9
Total	$	9.9	$	72.6		$	15.9	$	8.4		$	0.1	$	4.9

(a) For the six months ended June 30, 2013, effective hedging contracts increased oil revenue by $9.9 million and increased gas revenue by $6.0 million. For the six months ended June 30, 2012, effective hedging contracts decreased oil revenue by $2.9 million and increased gas revenue by $11.3 million.

At June 30, 2013, we had accumulated other comprehensive income of $25.0 million, net of tax, related to the fair value of our swap contracts that were outstanding as of June 30, 2013. We believe that approximately $17.2 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 June 30, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	30.1			($1.8	)	$	28.3
Long-term assets: Fair value of hedging contracts		13.2			(0.5	)		12.7
Current liabilities: Fair value of hedging contracts		(1.9	)		1.9			—
Long-term liabilities: Fair value of hedging contracts		(0.4	)		0.4			—

7

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of August 5, 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			92.25
2014		10,000			4.105		1,000			93.55
2014		10,000			4.190		1,000			94.00
2014		10,000			4.250		1,000			98.00
2014		10,000			4.350		1,000			98.30
2014							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:

	June 30, 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		245.5		239.1
7 1/2% Senior Notes due 2022		300.0		300.0
Bank debt		—		—
Total long-term debt	$	920.5	$	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 June 30 and August 5, 2013, we had no outstanding borrowings under our bank credit facility and letters of credit totaling $21.5 million had been issued pursuant to the facility, leaving $378.5 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 June 30, 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 June 28, 2013, our closing share price was $22.03. 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 June 30, 2013, the carrying amount of the liability component of the 2017 Convertible Notes was $245.5 million. During the three and six month-periods ended June 30, 2013, we recognized $3.2 million and $6.3 million, respectively, of interest expense for the amortization of the discount and $0.3 million and $0.6 million, respectively, of interest expense for the amortization of deferred financing costs related to the 2017 Convertible Notes. During the three and six month-periods ended June 30, 2013, we recognized $1.3 million and $2.6 million, respectively, of interest expense related to the contractual interest coupon on the 2017 Convertible Notes.

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Senior Notes

During the three and six-month periods ended June 30, 2013, we recognized $0.4 million and $0.8 million, respectively, of interest expense for the amortization of deferred financing costs related to the 8 ⁵/₈% Senior Notes due 2017 (the “2017 Notes”). During the three and six-month periods ended June 30, 2013, we recognized $8.1 million and $16.2 million, respectively, of interest expense related to the contractual interest coupon on the 2017 Notes.

During the three and six-month periods ended June 30, 2013, we recognized $0.1 million and $0.3 million, respectively, 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 and six-month periods ended June 30, 2013, we recognized $5.6 million and $11.2 million, respectively, 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 six months ended June 30, 2013 is set forth below:

	Six Months Ended June  30, 2013
	(in millions)
Asset retirement obligations as of the beginning of the period, including current portion	$	488.3
Liabilities incurred		16.5
Liabilities settled		(37.3	)
Accretion expense		16.6
Asset retirement obligations as of the end of the period, including current portion	$	484.1

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 June 30, 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.

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The following tables present our assets and liabilities that are measured at fair value on a recurring basis at June 30, 2013:

	Fair Value Measurements at June 30, 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	$	13.8		$	13.8	$	—		$	—
Hedging contracts		43.3			—		43.3			—
Total	$	57.1		$	13.8	$	43.3		$	—
	Fair Value Measurements at June 30, 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		($2.3	)	$	—		($2.3	)	$	—
Total		($2.3	)	$	—		($2.3	)	$	—

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 June 30, 2013 and December 31, 2012. As of June 30, 2013 and December 31, 2012, the fair value of our 2017 Notes was approximately $397.5 million and $401.3 million, respectively. As of June 30, 2013 and December 31, 2012, the fair value of the liability component of our 2017 Convertible Notes was approximately $254.7 million and $249.6 million, respectively. As of June 30, 2013 and December 31, 2012, the fair value of our 2022 Notes was approximately $316.5 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 1 inputs. We applied fair value concepts in determining the liability component of our 2017 Convertible Notes (see Note 4 – Long-Term Debt) at inception, June 30, 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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Note 8 – Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the three and six-month periods ended June 30, 2013 were as follows (in millions):

	Cash Flow Hedges			Foreign Currency Items			Total
For the Three Months Ended June 30, 2013
Beginning balance, net of tax	$	10.5		$	—		$	10.5
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		30.0			—			30.0
Foreign currency translations		—			(0.5	)		(0.5	)
Income tax effect		(10.8	)		—			(10.8	)
Net of tax		19.2			(0.5	)		18.7
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(7.3	)		—			(7.3	)
Income tax effect		2.6			—			2.6
Net of tax		(4.7	)		—			(4.7	)
Other comprehensive income (loss), net of tax		14.5			(0.5	)		14.0
Ending balance, net of tax	$	25.0			($0.5	)	$	24.5
For the Six Months Ended June 30, 2013
Beginning balance, net of tax	$	28.8		$	—		$	28.8
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		9.9			—			9.9
Foreign currency translations		—			(0.5	)		(0.5	)
Income tax effect		(3.5	)		—			(3.5	)
Net of tax		6.4			(0.5	)		5.9
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(15.9	)		—			(15.9	)
Income tax effect		5.7			—			5.7
Net of tax		(10.2	)		—			(10.2	)
Other comprehensive income (loss), net of tax		(3.8	)		(0.5	)		(4.3	)
Ending balance, net of tax	$	25.0			($0.5	)	$	24.5

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In 2012, the only component of accumulated other comprehensive income related to our cash flow hedges. Changes in accumulated other comprehensive income (loss) for the three and six-month periods ended June 30, 2012 were as follows (in millions):

	Cash Flow Hedges
For the Three Months Ended June 30, 2012
Beginning balance, net of tax		($0.2	)
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		108.1
Income tax effect		(38.9	)
Net of tax		69.2
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(9.4	)
Income tax effect		3.4
Net of tax		(6.0	)
Other comprehensive income, net of tax		63.2
Ending balance, net of tax	$	63.0
For the Six Months Ended June 30, 2012
Beginning balance, net of tax	$	21.9
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		72.6
Income tax effect		(26.1	)
Net of tax		46.5
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(8.4	)
Income tax effect		3.0
Net of tax		(5.4	)
Other comprehensive income, net of tax		41.1
Ending balance, net of tax	$	63.0

Note 9 – Investment in Oil and Gas Properties

During the three-month period ended June 30, 2013, we made an initial investment of $9.4 million in oil and gas properties located in Canada. This amount is included in unevaluated oil and gas properties as of June 30, 2013.

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Note 10 – 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 petitions and 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 $30.2 million. The franchise tax years 2010, 2011 and 2012 for Stone remain subject to examination, which potentially exposes us to additional estimated assessments of $3.4 million including accrued interest. We estimate the potential range of loss upon resolution of this matter to be between $0 and $33.6 million.

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Note 11 – Guarantor Financial Statements

Stone Offshore is an unconditional guarantor (the “Guarantor Subsidiary”) of the 2017 Convertible Notes, the 2017 Notes and the 2022 Notes. Our other subsidiaries (the “Non-Guarantor Subsidiaries”) have not provided guarantees. The following presents unaudited condensed consolidating financial information as of June 30, 2013 and December 31, 2012 and for the three and six-month periods ended June 30, 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

JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	174,530		$	51,202		$	640		$	—		$	226,372
Accounts receivable		76,622			260,432			—			(170,904	)		166,150
Fair value of hedging contracts		—			30,053			—			—			30,053
Current income tax receivable		26,530			—			—			—			26,530
Deferred taxes *		2,947			12,706			—			—			15,653
Inventory		3,723			283			—			—			4,006
Other current assets		3,872			—			—			—			3,872
Total current assets		288,224			354,676			640			(170,904	)		472,636
Oil and gas properties, full cost method:
Proved		1,132,623			6,345,858			—			—			7,478,481
Less: accumulated DD&A		(403,585	)		(5,267,420	)		—			—			(5,671,005	)
Net proved oil and gas properties		729,038			1,078,438			—			—			1,807,476
Unevaluated		290,344			235,187			9,448			—			534,979
Other property and equipment, net		22,517			—			—			—			22,517
Fair value of hedging contracts		—			13,221			—			—			13,221
Other assets, net		50,056			1,584			3,426			—			55,066
Investment in subsidiary		858,749			—			12,841			(871,590	)		—
Total assets	$	2,238,928		$	1,683,106		$	26,355			($1,042,494	)	$	2,905,895
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	245,554		$	19,238		$	77			($170,904	)	$	93,965
Undistributed oil and gas proceeds		24,378			2,902			—			—			27,280
Accrued interest		18,059			—			—			—			18,059
Fair value of hedging contracts		—			1,880			—			—			1,880
Asset retirement obligations		—			63,646			—			—			63,646
Other current liabilities		8,945			760			—			—			9,705
Total current liabilities		296,936			88,426			77			(170,904	)		214,535
Long-term debt		920,485			—			—			—			920,485
Deferred taxes *		38,609			327,468			—			—			366,077
Asset retirement obligations		5,665			414,752			—			—			420,417
Fair value of hedging contracts		—			436			—			—			436
Other long-term liabilities		26,197			6,712			—			—			32,909
Total liabilities		1,287,892			837,794			77			(170,904	)		1,954,859
Commitments and contingencies
Stockholders’ equity:
Common stock		487			—			—			—			487
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,389,898			1,496,509			27,404			(1,523,913	)		1,389,898
Accumulated deficit		(463,019	)		(676,250	)		(80	)		676,330			(463,019	)
Accumulated other comprehensive income (loss)		24,530			25,053			(1,046	)		(24,007	)		24,530
Total stockholders’ equity		951,036			845,312			26,278			(871,590	)		951,036
Total liabilities and stockholders’ equity	$	2,238,928		$	1,683,106		$	26,355			($1,042,494	)	$	2,905,895

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

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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.

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	8,378		$	176,120		$	—		$	—		$	184,498
Gas production		20,071			27,761			—			—			47,832
Natural gas liquids production		6,378			4,822			—			—			11,200
Other operational income		790			189			—			—			979
Derivative income, net		—			1,368			—			—			1,368
Total operating revenue		35,617			210,260			—			—			245,877
Operating expenses:
Lease operating expenses		3,425			47,092			—			—			50,517
Transportation, processing and gathering expenses		5,729			3,167			—			—			8,896
Production taxes		1,320			2,771			—			—			4,091
Depreciation, depletion, amortization		25,088			62,121			—			—			87,209
Accretion expense		93			8,225			—			—			8,318
Salaries, general and administrative		15,150			—			48			—			15,198
Incentive compensation expense		2,050			—			—			—			2,050
Other operational expenses		51			22			—			—			73
Total operating expenses		52,906			123,398			48			—			176,352
Income (loss) from operations		(17,289	)		86,862			(48	)		—			69,525
Other (income) expenses:
Interest expense		8,882			13			—			—			8,895
Interest income		(70	)		(38	)		(7	)		—			(115	)
Other income		(217	)		(465	)		—			—			(682	)
(Income) loss from investment in subsidiaries		(55,893	)		—			39			55,854			—
Total other (income) expenses		(47,298	)		(490	)		32			55,854			8,098
Income (loss) before taxes		30,009			87,352			(80	)		(55,854	)		61,427
Provision (benefit) for income taxes:
Current		(6,993	)		—			—			—			(6,993	)
Deferred		(2,020	)		31,418			—			—			29,398
Total income taxes		(9,013	)		31,418			—			—			22,405
Net income (loss)	$	39,022		$	55,934			($80	)		($55,854	)	$	39,022
Comprehensive income (loss)	$	53,060		$	55,934			($80	)		($55,854	)	$	53,060

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,813		$	175,368		$	—		$	—		$	182,181
Gas production		5,865			22,281			—			—			28,146
Natural gas liquids production		1,710			8,156			—			—			9,866
Other operational income		762			77			113			—			952
Derivative income, net		—			5,416			—			—			5,416
Total operating revenue		15,150			211,298			113			—			226,561
Operating expenses:
Lease operating expenses		6,318			45,443			(206	)		—			51,555
Transportation, processing and gathering expenses		1,710			3,782			—			—			5,492
Production taxes		507			1,851			—			—			2,358
Depreciation, depletion, amortization		15,071			71,969			93			—			87,133
Accretion expense		137			8,033			85			—			8,255
Salaries, general and administrative		14,190			(1,047	)		—			—			13,143
Incentive compensation expense		2,398			—			—			—			2,398
Other operational expenses		47			24			—			—			71
Total operating expenses		40,378			130,055			(28	)		—			170,405
Income (loss) from operations		(25,228	)		81,243			141			—			56,156
Other (income) expenses:
Interest expense		7,672			12			—			—			7,684
Interest income		(74	)		(5	)		—			—			(79	)
Other income		(4	)		(362	)		—			—			(366	)
Income from investment in subsidiaries		(52,313	)		(140	)		—			52,453			—
Total other (income) expenses		(44,719	)		(495	)		—			52,453			7,239
Income before taxes		19,491			81,738			141			(52,453	)		48,917
Provision (benefit) for income taxes:
Current		(665	)		—			—			—			(665	)
Deferred		(10,391	)		29,426			—			—			19,035
Total income taxes		(11,056	)		29,426			—			—			18,370
Net income	$	30,547		$	52,312		$	141			($52,453	)	$	30,547
Comprehensive income	$	93,749		$	52,312		$	141			($52,453	)	$	93,749

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	13,721		$	357,702		$	—		$	—		$	371,423
Gas production		27,269			57,385			—			—			84,654
Natural gas liquids production		8,677			11,701			—			—			20,378
Other operational income		1,439			347			—			—			1,786
Derivative income, net		—			147			—			—			147
Total operating revenue		51,106			427,282			—			—			478,388
Operating expenses:
Lease operating expenses		5,716			97,845			—			—			103,561
Transportation, processing and gathering expenses		7,781			6,512			—			—			14,293
Production taxes		2,187			3,993			—			—			6,180
Depreciation, depletion, amortization		35,279			127,365			—			—			162,644
Accretion expense		186			16,395			—			—			16,581
Salaries, general and administrative		29,098			4			48			—			29,150
Incentive compensation expense		3,481			—			—			—			3,481
Other operational expenses		101			44			—			—			145
Total operating expenses		83,829			252,158			48			—			336,035
Income (loss) from operations		(32,723	)		175,124			(48	)		—			142,353
Other (income) expenses:
Interest expense		18,509			21			—			—			18,530
Interest income		(150	)		(75	)		(7	)		—			(232	)
Other income		(441	)		(967	)		—			—			(1,408	)
(Income) loss from investment in subsidiaries		(112,721	)		—			39			112,682			—
Total other (income) expenses		(94,803	)		(1,021	)		32			112,682			16,890
Income (loss) before taxes		62,080			176,145			(80	)		(112,682	)		125,463
Provision (benefit) for income taxes:
Current		(10,739	)		—			—			—			(10,739	)
Deferred		(6,961	)		63,383			—			—			56,422
Total income taxes		(17,700	)		63,383			—			—			45,683
Net income (loss)	$	79,780		$	112,762			($80	)		($112,682	)	$	79,780
Comprehensive income (loss)	$	75,477		$	112,762			($80	)		($112,682	)	$	75,477

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	13,047		$	370,892		$	—		$	—		$	383,939
Gas production		11,496			45,507			—			—			57,003
Natural gas liquids production		5,574			17,744			—			—			23,318
Other operational income		1,456			140			246			—			1,842
Derivative income, net		—			4,931			—			—			4,931
Total operating revenue		31,573			439,214			246			—			471,033
Operating expenses:
Lease operating expenses		11,222			84,830			(17	)		—			96,035
Transportation, processing and gathering expenses		4,198			4,951			—			—			9,149
Production taxes		1,670			4,066			—			—			5,736
Depreciation, depletion, amortization		26,548			144,969			191			—			171,708
Accretion expense		285			16,065			171			—			16,521
Salaries, general and administrative		26,844			4			—			—			26,848
Incentive compensation expense		3,840			—			—			—			3,840
Other operational expenses		89			24			—			—			113
Total operating expenses		74,696			254,909			345			—			329,950
Income (loss) from operations		(43,123	)		184,305			(99	)		—			141,083
Other (income) expenses:
Interest expense		13,518			(103	)		—			—			13,415
Interest income		(104	)		(6	)		—			—			(110	)
Other income		(23	)		(763	)		—			—			(786	)
(Income) loss from investment in subsidiaries		(118,450	)		99			—			118,351			—
Total other (income) expenses		(105,059	)		(773	)		—			118,351			12,519
Income (loss) before taxes		61,936			185,078			(99	)		(118,351	)		128,564
Provision (benefit) for income taxes:
Current		569			—			—			—			569
Deferred		(20,154	)		66,628			—			—			46,474
Total income taxes		(19,585	)		66,628			—			—			47,043
Net income (loss)	$	81,521		$	118,450			($99	)		($118,351	)	$	81,521
Comprehensive income (loss)	$	122,658		$	118,450			($99	)		($118,351	)	$	122,658

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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	79,780		$	112,762			($80	)	($	112,682	)	$	79,780
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		35,279			127,365			—			—			162,644
Accretion expense		186			16,395			—			—			16,581
Deferred income tax provision (benefit)		(6,961	)		63,383			—			—			56,422
Settlement of asset retirement obligations		—			(37,335	)		—			—			(37,335	)
Non-cash stock compensation expense		4,866			—			—			—			4,866
Excess tax benefits		(104	)		—			—			—			(104	)
Non-cash derivative expense		—			311			—			—			311
Non-cash interest expense		8,181			—			—			—			8,181
Non-cash (income) loss from investment in subsidiaries		(112,722	)		—			40			112,682			—
Change in current income taxes		(16,399	)		—			—			—			(16,399	)
Change in intercompany receivables/payables		170,815			(170,859	)		44			—			—
(Increase) decrease in accounts receivable		(17,365	)		18,503			—			—			1,138
Increase in other current assets		(245	)		—			—			—			(245	)
Decrease in inventory		158			—			—			—			158
Increase in accounts payable		4,507			2,086			—			—			6,593
Increase (decrease) in other current liabilities		(5,258	)		2,088			—			—			(3,170	)
Other		(2,482	)		(966	)		—			—			(3,448	)
Net cash provided by operating activities		142,236			133,733			4			—			275,973
Cash flows from investing activities:
Investment in oil and gas properties		(176,896	)		(133,659	)		(9,663	)		—			(320,218	)
Investment in fixed and other assets		(1,711	)		—			—			—			(1,711	)
Change in restricted funds		—			—			(3,515	)		—			(3,515	)
Investment in subsidiaries		(14,000	)		—			(13,404	)		27,404			—
Net cash used in investing activities		(192,607	)		(133,659	)		(26,582	)		27,404			(325,444	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—			—			(11	)
Excess tax benefits		104			—			—			—			104
Equity proceeds from parent		—			—			27,404			(27,404	)		—
Net payments for share based compensation		(3,590	)		—			—			—			(3,590	)
Net cash (used in) provided by financing activities		(3,497	)		—			27,404			(27,404	)		(3,497	)
Effect of exchange rate changes on cash		—			—			(186	)		—			(186	)
Net change in cash and cash equivalents		(53,868	)		74			640			—			(53,154	)
Cash and cash equivalents, beginning of period		228,398			51,128			—			—			279,526
Cash and cash equivalents, end of period	$	174,530		$	51,202		$	640		$	—		$	226,372

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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	81,521		$	118,450		($	99	)	($	118,351	)	$	81,521
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		26,548			144,969			191			—			171,708
Accretion expense		285			16,065			171			—			16,521
Deferred income tax provision (benefit)		(20,154	)		66,628			—			—			46,474
Settlement of asset retirement obligations		—			(21,918	)		—			—			(21,918	)
Non-cash stock compensation expense		4,271			—			—			—			4,271
Excess tax benefits		(795	)		—			—			—			(795	)
Non-cash derivative income		—			(2,758	)		—			—			(2,758	)
Non-cash interest expense		5,278			—			—			—			5,278
Change in current income taxes		(3,921	)		—			—			—			(3,921	)
Change in intercompany receivables/payables		142,965			(142,720	)		(245	)		—			—
(Increase) decrease in accounts receivable		(36,705	)		(833	)		21			—			(37,517	)
Increase in other current assets		(124	)		—			—			—			(124	)
Decrease in inventory		36			—			—			—			36
Increase (decrease) in accounts payable		5,238			3,214			(39	)		—			8,413
Decrease in other current liabilities		(12,924	)		(4,380	)		—			—			(17,304	)
Other		(118,152	)		(663	)		(1	)		118,351			(465	)
Net cash provided by (used in) operating activities		73,367			176,054			(1	)		—			249,420
Cash flows from investing activities:
Investment in oil and gas properties		(129,792	)		(146,022	)		1			—			(275,813	)
Proceeds from sale of oil and gas properties, net of expenses		403			—			—			—			403
Sale of fixed assets		149			—			—			—			149
Investment in fixed and other assets		(1,900	)		—			—			—			(1,900	)
Net cash (used in) provided by investing activities		(131,140	)		(146,022	)		1			—			(277,161	)
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		795			—			—			—			795
Net payments for share based compensation		(3,141	)		—			—			—			(3,141	)
Net cash provided by financing activities		213,139			—			—			—			213,139
Net change in cash and cash equivalents		155,366			30,032			—			—			185,398
Cash and cash equivalents, beginning of period		37,389			926			136			—			38,451
Cash and cash equivalents, end of period	$	192,755		$	30,958		$	136		$	—		$	223,849

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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 (this “Form 10-Q”) includes “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 Form 10-Q.

Forward-looking statements appear in a number of places in this Form 10-Q 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;

• the amount, nature and timing of any potential divestiture transactions;

• 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;

• market conditions relating to potential acquisition and divestiture transactions;

• 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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For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see (1) Part II, Item 1A, of this Form 10-Q and (2) Part I, Item 1A, of our 2012 Annual Report on Form 10-K. Should one or more of the risks or uncertainties described above, in our 2012 Annual Report on Form 10-K or in this 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 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 and deferred income taxes; and

• contingencies.

This 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 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 and in this Form 10-Q under Part II, Item 1A. Risk Factors regarding our known material 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. For additional information, see Part II, Item 1. Legal Proceedings.

24

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.

Non U.S. Operations – In April 2013, we entered into an agreement to participate in the drilling of exploratory wells in Canada. Included in unevaluated oil and gas property costs at June 30, 2013 are $9.4 million of capital expenditures related to our oil and gas property investments in Canada. Under full cost accounting, investments in individual countries represent separate cost centers for computation of depreciation, depletion and amortization as well as for full cost ceiling test evaluations. Given that this is our sole investment in Canada, it is possible that upon a more complete evaluation of this project that some or all of this investment could be recognized as a charge to expense on our statement of operations.

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 amount of the notes 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 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.

Potential Sale of Shelf Properties – We have engaged a financial advisor to market certain of our properties in the GOM conventional shelf, state waters and onshore Louisiana. The properties represented approximately 12% of our total estimated proved reserves as of December 31, 2012. The potential sale of some or all of these properties would be subject to an acceptable offer or offers and other market conditions. Sales of oil and gas properties under the full cost method are accounted for as an adjustment to capitalized costs unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to the applicable cost center. If such relationship would be altered significantly, we would be required to allocate the cost center between the properties sold and the properties retained and recognize a gain or loss on the sale in the period in which the transaction is consummated. Whether a significant alteration would occur and, therefore, a gain or loss recognized on this potential transaction cannot be determined at this time.

Liquidity and Capital Resources

At August 5, 2013, we had $378.5 million of availability under our bank credit facility and cash on hand of approximately $219 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 $276.0 million during the six months ended June 30, 2013 compared to $249.4 million in the comparable period in 2012.

Net cash used in investing activities totaled $325.4 million and $277.2 million during the six months ended June 30, 2013 and 2012, respectively, which primarily represents our investment in oil and natural gas properties.

Net cash used in financing activities totaled $3.5 million for the six months ended June 30, 2013, which primarily represents net payments for share based compensation. Net cash provided by financing activities totaled $213.1 million for the six months ended June 30, 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 six months ended June 30, 2012.

We had working capital at June 30, 2013 of $258.1 million.

Capital Expenditures. During the three months ended June 30, 2013, additions to oil and gas property costs of $183.6 million included $50.9 million of lease and property acquisition costs, $7.5 million of capitalized salaries, general and administrative expenses (inclusive of incentive compensation) and $10.9 million of capitalized interest. During the six months ended June 30, 2013, additions to oil and gas property costs of $321.2 million included $61.8 million of lease and property acquisition costs, $14.1 million of capitalized salaries, general and administrative expenses (inclusive of incentive compensation) and $20.9 million of capitalized interest. These investments were financed with cash on hand and cash flow from operations.

25

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 June 30 and August 5, 2013, we had no outstanding borrowings under our bank credit facility and letters of credit totaling $21.5 million had been issued pursuant to the bank credit facility, leaving $378.5 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 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.

Under the financial covenants of our bank credit facility, we must (i) maintain a ratio of consolidated debt to consolidated EBITDA, as defined in the credit agreement, for the preceding four quarterly periods of not greater than 3.25 to 1 and (ii) maintain a ratio of consolidated EBITDA to consolidated Net Interest Expense, as defined in the credit agreement, for the preceding four quarterly periods of not less than 3.0 to 1. As of June 30, 2013, our debt to EBITDA Ratio was 1.56 to 1 and our EBITDA to consolidated Net Interest Expense Ratio was approximately 18.32 to 1. In addition, our bank credit facility includes certain customary restrictions or requirements with respect to disposition of properties, incurrence of additional debt, change of ownership and reporting responsibilities. These covenants may limit or prohibit us from paying cash dividends but do allow for limited stock repurchases. These covenants also restrict our ability to prepay other indebtedness under certain circumstances.

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 tables set forth certain information with respect to our oil and gas operations.

	Three Months Ended June 30,
	2013		2012		Variance			% Change
Production:
Oil (MBbls)		1,767		1,691		76			4	%
Natural gas (MMcf)		11,745		10,422		1,323			13	%
Natural gas liquids (“NGLs”) (MBbls)		407		253		154			61	%
Oil, natural gas and NGLs (MMcfe)		24,789		22,086		2,703			12	%
Revenue data (in thousands) (a):
Oil revenue	$	184,498	$	182,181	$	2,317			1	%
Natural gas revenue		47,832		28,146		19,686			70	%
Natural gas liquids revenue		11,200		9,866		1,334			14	%
Total oil, natural gas and NGL revenue	$	243,530	$	220,193	$	23,337			11	%
Average prices (a):
Oil (per Bbl)	$	104.41	$	107.74		($3.33	)		(3	%)
Natural gas (per Mcf)		4.07		2.70		1.37			51	%
Natural gas liquids (per Bbl)		27.52		39.00		(11.48	)		(29	%)
Oil, natural gas and NGLs (per Mcfe)		9.82		9.97		(0.15	)		(2	%)
Expenses (per Mcfe):
Lease operating expenses	$	2.04	$	2.33		($0.29	)		(12	%)
Salaries, general and administrative expenses (b)		0.61		0.60		0.01			2	%
DD&A expense on oil and gas properties		3.48		3.91		(0.43	)		(11	%)

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

(b) Exclusive of incentive compensation expense.

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	Six Months Ended June 30,
	2013		2012		Variance			% Change
Production:
Oil (MBbls)		3,434		3,553		(119	)		(3	%)
Natural gas (MMcf)		22,103		20,416		1,687			8	%
Natural gas liquids (MBbls)		623		453		170			38	%
Oil, natural gas and NGLs (MMcfe)		46,445		44,452		1,993			4	%
Revenue data (in thousands) (a):
Oil revenue	$	371,423	$	383,939	($	12,516	)		(3	%)
Natural gas revenue		84,654		57,003		27,651			49	%
Natural gas liquids revenue		20,378		23,318		(2,940	)		(13	%)
Total oil, natural gas and NGL revenue	$	476,455	$	464,260	$	12,195			3	%
Average prices (a):
Oil (per Bbl)	$	108.16	$	108.06	$	0.10			0.09	%
Natural gas (per Mcf)		3.83		2.79		1.04			37	%
Natural gas liquids (per Bbl)		32.71		51.47		(18.76	)		(36	%)
Oil, natural gas and NGLs (per Mcfe)		10.26		10.44		(0.18	)		(2	%)
Expenses (per Mcfe):
Lease operating expenses	$	2.23	$	2.16	$	0.07			3	%
Salaries, general and administrative expenses (b)		0.63		0.60		0.03			5	%
DD&A expense on oil and gas properties		3.46		3.83		(0.37	)		(10	%)

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

(b) Exclusive of incentive compensation expense.

Net Income. During the three months ended June 30, 2013, we reported net income totaling $39.0 million, or $0.78 per share, compared to net income for the three months ended June 30, 2012 of $30.5 million, or $0.62 per share. During the six months ended June 30, 2013, we reported net income totaling $79.8 million, or $1.60 per share, compared to net income for the six months ended June 30, 2012 of $81.5 million, or $1.65 per share. All per share amounts are on a diluted basis.

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

Production. During the three months ended June 30, 2013, total production volumes increased to 24.8 Bcfe compared to 22.1 Bcfe produced during the comparable 2012 period, representing a 12% increase. Oil production during the three months ended June 30, 2013 totaled approximately 1,767,000 Bbls compared to 1,691,000 Bbls produced during the comparable 2012 period; natural gas production totaled 11.7 Bcf during the three months ended June 30, 2013 compared to 10.4 Bcf during the comparable 2012 period; and NGL production during the three months ended June 30, 2013 totaled approximately 407,000 Bbls compared to 253,000 Bbls produced during the comparable period of 2012.

During the six months ended June 30, 2013, total production volumes increased to 46.4 Bcfe compared to 44.5 Bcfe produced during the comparable 2012 period, representing a 4% increase. Oil production during the six months ended June 30, 2013 totaled approximately 3,434,000 Bbls compared to 3,553,000 Bbls produced during the six months ended June 30, 2012; natural gas production totaled 22.1 Bcf during the six months ended June 30, 2013 compared to 20.4 Bcf during the comparable 2012 period; and NGL production during the six months ended June 30, 2013 totaled approximately 623,000 Bbls compared to 453,000 Bbls produced during the comparable period of 2012.

The third well in the La Cantera field was placed on production during the second quarter of 2013. The Williams pipeline was repaired and pressure restrictions were eliminated, which allowed us to restore shut-in production in our Mary field during the second quarter of 2013. Included in production volumes during the six months ended June 30, 2013 is a non-recurring production adjustment relating to the retroactive grant of royalty relief volumes of approximately 4.5 MMcfe per day with respect to 2012 production at two of our deep water fields.

Prices. Prices realized during the three months ended June 30, 2013 averaged $104.41 per Bbl of oil, $4.07 per Mcf of natural gas and $27.52 per Bbl of NGLs, or 2% lower, on an Mcfe basis, than average realized prices of $107.74 per Bbl of oil, $2.70 per Mcf of natural gas and $39.00 per Bbl of NGLs during the comparable 2012 period. Prices realized during the six months ended June 30, 2013 averaged $108.16 per Bbl of oil, $3.83 per Mcf of natural gas and $32.71 per Bbl of NGLs, or 2% lower, on an Mcfe basis, than average realized prices of $108.06 per Bbl of oil, $2.79 per Mcf of natural gas and $51.47 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 $0.17 per Mcf and increased our average realized oil price by $3.02 per Bbl during the three months ended June 30, 2013. During the three months ended June 30, 2012, our effective hedging transactions increased our average realized natural gas price by $0.63 per Mcf and increased our average realized oil price by $1.69 per Bbl. During the six months ended June 30, 2013, effective hedging transactions increased our average realized natural gas price by $0.27 per Mcf and increased our average realized oil price by $2.88 per Bbl. During the six months ended June 30, 2012, effective hedging transactions increased our average realized natural gas price by $0.55 per Mcf and decreased our average realized oil price by $0.84 per Bbl.

Revenue. Oil, natural gas and NGL revenue was $243.5 million during the three months ended June 30, 2013, compared to $220.2 million during the comparable period of 2012. The increase was attributable to a 12% increase in production quantities on a gas equivalent basis, which was partially offset by a 2% decrease in average realized prices. For the six months ended June 30, 2013 and 2012, oil, natural gas and NGL revenue totaled $476.4 million and $464.3 million, respectively. The increase was attributable to a 4% increase in production quantities on a gas equivalent basis, which was partially offset by a 2% decrease in average realized prices.

Expenses. Lease operating expenses during the three months ended June 30, 2013 and 2012 totaled $50.5 million and $51.6 million, respectively. For the six months ended June 30, 2013 and 2012, lease operating expenses totaled $103.6 million and $96.0 million, respectively. On a unit of production basis, lease operating expenses were $2.23 per Mcfe and $2.16 per Mcfe for the six months ended June 30, 2013 and 2012, respectively. The increase in lease operating expenses during the six months ended June 30, 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 June 30, 2013 totaled $86.3 million, or $3.48 per Mcfe, compared to $86.4 million, or $3.91 per Mcfe, during the comparable period of 2012. For the six months ended June 30, 2013 and 2012, DD&A expense totaled $160.8 million, or $3.46 per Mcfe, and $170.2 million, or $3.83 per Mcfe, respectively.

Salaries, general and administrative (“SG&A”) expenses (exclusive of incentive compensation) for the three months ended June 30, 2013 were $15.2 million compared to $13.1 million for the three months ended June 30, 2012. For the six months ended June 30, 2013 and 2012, SG&A expenses (exclusive of incentive compensation) totaled $29.2 million and $26.8 million, respectively. The increase in SG&A expenses for the six months ended June 30, 2013 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. Included in SG&A expenses during the six months ended June 30, 2012 was a management fee of $1.0 million for transition services related to our Pompano acquisition.

For the three months ended June 30, 2013 and 2012, incentive compensation expense totaled $2.1 million and $2.4 million, respectively. For the six months ended June 30, 2013 and 2012, incentive compensation expense totaled $3.5 million and $3.8 million, respectively. 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 June 30, 2013 totaled $8.9 million, net of $10.9 million of capitalized interest, compared to interest expense of $7.7 million, net of $9.4 million of capitalized interest, during the comparable 2012 period. For the six months ended June 30, 2013, interest expense totaled $18.5 million, net of $20.9 million of capitalized interest, compared to interest expense of $13.4 million, net of $18.1 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 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 48% of our estimated 2013 production from estimated proved reserves, 42% 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 $920.5 million at June 30, 2013, all of which bears interest at fixed rates. The $920.5 million of fixed-rate debt is comprised of $245.5 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.

Our bank credit facility is subject to an adjustable interest rate. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources. We had no outstanding borrowings under our bank credit facility as of June 30, 2013. If we borrow funds under our bank credit facility, we may be subject to increased sensitivity to interest rate movements.

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 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 June 30, 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 June 30, 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

29

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 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) in the 15^th Judicial District Court claiming $1.5 million of additional franchise taxes due for the franchise tax year 2004, 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) in the 15^th Judicial District Court 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 petitions and 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. We believe that the conditions observed were not actually violations of applicable rules and accordingly initiated discussions with BSEE to resolve the matter. Notwithstanding these discussions, by “Reviewing Officer’s Final Decision” dated July 9, 2013, BSEE assessed a penalty against Stone of $200,000 based on $25,000 per day for eight days of alleged improper venting of gas at the platform. We are evaluating whether to pursue our right to an administrative appeal of this decision. 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.

In accordance with industry practice, we maintain insurance against some, but not all, of the operating risks to which our business is exposed. We insure some, but not all, of our properties from operational loss related events. We currently have insurance policies that include coverage for general liability, physical damage to our oil and gas properties, operational control of well, oil pollution, workers’ compensation and employers’ liability and other coverage. Our insurance coverage includes deductibles that must be met prior to recovery, as well as sub-limits and/or self-insurance. Additionally, our insurance is subject to exclusions and limitations, and there is no assurance that such coverage will adequately protect us against liability from all potential consequences, damages and/or losses.

Effective May 1, 2013, we no longer purchase physical damage insurance coverage for our platforms for losses resulting from named windstorms. Additionally, we now purchase physical damage insurance coverage for losses resulting from operational activities for only our Amberjack and Pompano platforms. 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. In addition, effective July 1, 2013, we increased our general liability insurance coverage to an annual aggregate limit of $725 million on a 100% working interest basis.

Our operational control of well coverage provides limits that vary by well location and depth and range from a combined single limit of $20 million to $300 million per occurrence. Exploratory deep water wells have a coverage limit of $600 million per occurrence. Additionally, we maintain $150 million in oil pollution liability coverage, including $70 million of self-insurance. Our general liability, control of well and physical damage policy limits are scaled proportionately to our working interests, and all of our policies described above are subject to deductibles, sub-limits and/or self-insurance. Under our service agreements, including drilling contracts, generally we are indemnified for injuries and death of the service provider’s employees as well as contractors and subcontractors hired by the service provider.

An operational event in excess of our coverage or hurricane related event may cause damage or liability which might severely impact our financial position. We may be liable for damages from an event relating to a project in which we are a non-operator, but have a working interest in such project. Such an event may also cause a significant interruption to our business, which might also severely impact our financial position. In past years, we have experienced production interruptions for which we had no production interruption insurance.

We reevaluate the purchase of insurance, policy limits and terms annually each May. Future insurance coverage for our industry could increase in cost and may include higher deductibles or retentions. In addition, some forms of insurance may become unavailable in the future or unavailable on terms that we believe are economically acceptable. No assurance can be given that we will be able to maintain insurance in the future at rates that we consider reasonable and we may elect to maintain minimal or no insurance coverage. We may not be able to secure additional insurance or bonding that might be required by new governmental regulations. This may cause us to restrict our operations in the GOM, which might severely impact our financial position. The occurrence of a significant event, not fully insured against, could have a material adverse effect on our financial condition and results of operations.

30

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 and nonemployee directors to pay taxes associated with the vesting of restricted stock. The following table sets forth information regarding our repurchases or acquisitions of common stock during the three months ended June 30, 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:
April 2013		—			—		—
May 2013		—			—		—
June 2013		—			—		—
		—			—		—	$	92,928,632
Other:
April 2013		—			—		—
May 2013		5,628	(a)	$	22.27		—
June 2013		—			—		—
		5,628		$	22.27		—		N/A
Total		5,628		$	22.27		—

(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.

31

Item 6. Exhibits

3.1	Certificate of Incorporation of the Registrant, as amended (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)).
10.1	Amendment No. 3 dated as of April 30, 2013 to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed May 8, 2013 (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.
*101.INS	XBRL Instance Document
*101.SCH	XBRL Taxonomy Extension Schema Document
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB	XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed or furnished herewith.

# 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

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: August 7, 2013	By:	/s/ Kenneth H. Beer
		Kenneth H. Beer
		Executive Vice President and
		Chief Financial Officer
		(On behalf of the Registrant and as
		Principal Financial Officer)

33

EXHIBIT INDEX

Exhibit Number	Description
3.1	Certificate of Incorporation of the Registrant, as amended (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)).
10.1	Amendment No. 3 dated as of April 30, 2013 to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed May 8, 2013 (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.
*101.INS	XBRL Instance Document
*101.SCH	XBRL Taxonomy Extension Schema Document
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB	XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed or furnished herewith.

# 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.

34

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 (“registrant”);

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.

August 7, 2013	/s/ David H. Welch
	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 (“registrant”);

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.

August 7, 2013	/s/ Kenneth H. Beer
	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 Quarterly Report on Form 10-Q of Stone Energy Corporation (the “Company”) for the quarterly period ended June 30, 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, as amended; and

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

August 7, 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

XML

Guarantor Financial Statements

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Guarantor Financial Statements

Note 11 – Guarantor Financial Statements

Stone Offshore is an unconditional guarantor (the “Guarantor Subsidiary”) of the 2017 Convertible Notes, the 2017 Notes and the 2022 Notes. Our other subsidiaries (the “Non-Guarantor Subsidiaries”) have not provided guarantees. The following presents unaudited condensed consolidating financial information as of June 30, 2013 and December 31, 2012 and for the three and six-month periods ended June 30, 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

JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	174,530		$	51,202		$	640		$	—		$	226,372
Accounts receivable		76,622			260,432			—			(170,904	)		166,150
Fair value of hedging contracts		—			30,053			—			—			30,053
Current income tax receivable		26,530			—			—			—			26,530
Deferred taxes *		2,947			12,706			—			—			15,653
Inventory		3,723			283			—			—			4,006
Other current assets		3,872			—			—			—			3,872
Total current assets		288,224			354,676			640			(170,904	)		472,636
Oil and gas properties, full cost method:
Proved		1,132,623			6,345,858			—			—			7,478,481
Less: accumulated DD&A		(403,585	)		(5,267,420	)		—			—			(5,671,005	)
Net proved oil and gas properties		729,038			1,078,438			—			—			1,807,476
Unevaluated		290,344			235,187			9,448			—			534,979
Other property and equipment, net		22,517			—			—			—			22,517
Fair value of hedging contracts		—			13,221			—			—			13,221
Other assets, net		50,056			1,584			3,426			—			55,066
Investment in subsidiary		858,749			—			12,841			(871,590	)		—
Total assets	$	2,238,928		$	1,683,106		$	26,355			($1,042,494	)	$	2,905,895
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	245,554		$	19,238		$	77			($170,904	)	$	93,965
Undistributed oil and gas proceeds		24,378			2,902			—			—			27,280
Accrued interest		18,059			—			—			—			18,059
Fair value of hedging contracts		—			1,880			—			—			1,880
Asset retirement obligations		—			63,646			—			—			63,646
Other current liabilities		8,945			760			—			—			9,705
Total current liabilities		296,936			88,426			77			(170,904	)		214,535
Long-term debt		920,485			—			—			—			920,485
Deferred taxes *		38,609			327,468			—			—			366,077
Asset retirement obligations		5,665			414,752			—			—			420,417
Fair value of hedging contracts		—			436			—			—			436
Other long-term liabilities		26,197			6,712			—			—			32,909
Total liabilities		1,287,892			837,794			77			(170,904	)		1,954,859
Commitments and contingencies
Stockholders’ equity:
Common stock		487			—			—			—			487
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,389,898			1,496,509			27,404			(1,523,913	)		1,389,898
Accumulated deficit		(463,019	)		(676,250	)		(80	)		676,330			(463,019	)
Accumulated other comprehensive income (loss)		24,530			25,053			(1,046	)		(24,007	)		24,530
Total stockholders’ equity		951,036			845,312			26,278			(871,590	)		951,036
Total liabilities and stockholders’ equity	$	2,238,928		$	1,683,106		$	26,355			($1,042,494	)	$	2,905,895

* 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 JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	8,378		$	176,120		$	—		$	—		$	184,498
Gas production		20,071			27,761			—			—			47,832
Natural gas liquids production		6,378			4,822			—			—			11,200
Other operational income		790			189			—			—			979
Derivative income, net		—			1,368			—			—			1,368
Total operating revenue		35,617			210,260			—			—			245,877
Operating expenses:
Lease operating expenses		3,425			47,092			—			—			50,517
Transportation, processing and gathering expenses		5,729			3,167			—			—			8,896
Production taxes		1,320			2,771			—			—			4,091
Depreciation, depletion, amortization		25,088			62,121			—			—			87,209
Accretion expense		93			8,225			—			—			8,318
Salaries, general and administrative		15,150			—			48			—			15,198
Incentive compensation expense		2,050			—			—			—			2,050
Other operational expenses		51			22			—			—			73
Total operating expenses		52,906			123,398			48			—			176,352
Income (loss) from operations		(17,289	)		86,862			(48	)		—			69,525
Other (income) expenses:
Interest expense		8,882			13			—			—			8,895
Interest income		(70	)		(38	)		(7	)		—			(115	)
Other income		(217	)		(465	)		—			—			(682	)
(Income) loss from investment in subsidiaries		(55,893	)		—			39			55,854			—
Total other (income) expenses		(47,298	)		(490	)		32			55,854			8,098
Income (loss) before taxes		30,009			87,352			(80	)		(55,854	)		61,427
Provision (benefit) for income taxes:
Current		(6,993	)		—			—			—			(6,993	)
Deferred		(2,020	)		31,418			—			—			29,398
Total income taxes		(9,013	)		31,418			—			—			22,405
Net income (loss)	$	39,022		$	55,934			($80	)		($55,854	)	$	39,022
Comprehensive income (loss)	$	53,060		$	55,934			($80	)		($55,854	)	$	53,060

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,813		$	175,368		$	—		$	—		$	182,181
Gas production		5,865			22,281			—			—			28,146
Natural gas liquids production		1,710			8,156			—			—			9,866
Other operational income		762			77			113			—			952
Derivative income, net		—			5,416			—			—			5,416
Total operating revenue		15,150			211,298			113			—			226,561
Operating expenses:
Lease operating expenses		6,318			45,443			(206	)		—			51,555
Transportation, processing and gathering expenses		1,710			3,782			—			—			5,492
Production taxes		507			1,851			—			—			2,358
Depreciation, depletion, amortization		15,071			71,969			93			—			87,133
Accretion expense		137			8,033			85			—			8,255
Salaries, general and administrative		14,190			(1,047	)		—			—			13,143
Incentive compensation expense		2,398			—			—			—			2,398
Other operational expenses		47			24			—			—			71
Total operating expenses		40,378			130,055			(28	)		—			170,405
Income (loss) from operations		(25,228	)		81,243			141			—			56,156
Other (income) expenses:
Interest expense		7,672			12			—			—			7,684
Interest income		(74	)		(5	)		—			—			(79	)
Other income		(4	)		(362	)		—			—			(366	)
Income from investment in subsidiaries		(52,313	)		(140	)		—			52,453			—
Total other (income) expenses		(44,719	)		(495	)		—			52,453			7,239
Income before taxes		19,491			81,738			141			(52,453	)		48,917
Provision (benefit) for income taxes:
Current		(665	)		—			—			—			(665	)
Deferred		(10,391	)		29,426			—			—			19,035
Total income taxes		(11,056	)		29,426			—			—			18,370
Net income	$	30,547		$	52,312		$	141			($52,453	)	$	30,547
Comprehensive income	$	93,749		$	52,312		$	141			($52,453	)	$	93,749

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	13,721		$	357,702		$	—		$	—		$	371,423
Gas production		27,269			57,385			—			—			84,654
Natural gas liquids production		8,677			11,701			—			—			20,378
Other operational income		1,439			347			—			—			1,786
Derivative income, net		—			147			—			—			147
Total operating revenue		51,106			427,282			—			—			478,388
Operating expenses:
Lease operating expenses		5,716			97,845			—			—			103,561
Transportation, processing and gathering expenses		7,781			6,512			—			—			14,293
Production taxes		2,187			3,993			—			—			6,180
Depreciation, depletion, amortization		35,279			127,365			—			—			162,644
Accretion expense		186			16,395			—			—			16,581
Salaries, general and administrative		29,098			4			48			—			29,150
Incentive compensation expense		3,481			—			—			—			3,481
Other operational expenses		101			44			—			—			145
Total operating expenses		83,829			252,158			48			—			336,035
Income (loss) from operations		(32,723	)		175,124			(48	)		—			142,353
Other (income) expenses:
Interest expense		18,509			21			—			—			18,530
Interest income		(150	)		(75	)		(7	)		—			(232	)
Other income		(441	)		(967	)		—			—			(1,408	)
(Income) loss from investment in subsidiaries		(112,721	)		—			39			112,682			—
Total other (income) expenses		(94,803	)		(1,021	)		32			112,682			16,890
Income (loss) before taxes		62,080			176,145			(80	)		(112,682	)		125,463
Provision (benefit) for income taxes:
Current		(10,739	)		—			—			—			(10,739	)
Deferred		(6,961	)		63,383			—			—			56,422
Total income taxes		(17,700	)		63,383			—			—			45,683
Net income (loss)	$	79,780		$	112,762			($80	)		($112,682	)	$	79,780
Comprehensive income (loss)	$	75,477		$	112,762			($80	)		($112,682	)	$	75,477

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	13,047		$	370,892		$	—		$	—		$	383,939
Gas production		11,496			45,507			—			—			57,003
Natural gas liquids production		5,574			17,744			—			—			23,318
Other operational income		1,456			140			246			—			1,842
Derivative income, net		—			4,931			—			—			4,931
Total operating revenue		31,573			439,214			246			—			471,033
Operating expenses:
Lease operating expenses		11,222			84,830			(17	)		—			96,035
Transportation, processing and gathering expenses		4,198			4,951			—			—			9,149
Production taxes		1,670			4,066			—			—			5,736
Depreciation, depletion, amortization		26,548			144,969			191			—			171,708
Accretion expense		285			16,065			171			—			16,521
Salaries, general and administrative		26,844			4			—			—			26,848
Incentive compensation expense		3,840			—			—			—			3,840
Other operational expenses		89			24			—			—			113
Total operating expenses		74,696			254,909			345			—			329,950
Income (loss) from operations		(43,123	)		184,305			(99	)		—			141,083
Other (income) expenses:
Interest expense		13,518			(103	)		—			—			13,415
Interest income		(104	)		(6	)		—			—			(110	)
Other income		(23	)		(763	)		—			—			(786	)
(Income) loss from investment in subsidiaries		(118,450	)		99			—			118,351			—
Total other (income) expenses		(105,059	)		(773	)		—			118,351			12,519
Income (loss) before taxes		61,936			185,078			(99	)		(118,351	)		128,564
Provision (benefit) for income taxes:
Current		569			—			—			—			569
Deferred		(20,154	)		66,628			—			—			46,474
Total income taxes		(19,585	)		66,628			—			—			47,043
Net income (loss)	$	81,521		$	118,450			($99	)		($118,351	)	$	81,521
Comprehensive income (loss)	$	122,658		$	118,450			($99	)		($118,351	)	$	122,658

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	79,780		$	112,762			($80	)	($	112,682	)	$	79,780
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		35,279			127,365			—			—			162,644
Accretion expense		186			16,395			—			—			16,581
Deferred income tax provision (benefit)		(6,961	)		63,383			—			—			56,422
Settlement of asset retirement obligations		—			(37,335	)		—			—			(37,335	)
Non-cash stock compensation expense		4,866			—			—			—			4,866
Excess tax benefits		(104	)		—			—			—			(104	)
Non-cash derivative expense		—			311			—			—			311
Non-cash interest expense		8,181			—			—			—			8,181
Non-cash (income) loss from investment in subsidiaries		(112,722	)		—			40			112,682			—
Change in current income taxes		(16,399	)		—			—			—			(16,399	)
Change in intercompany receivables/payables		170,815			(170,859	)		44			—			—
(Increase) decrease in accounts receivable		(17,365	)		18,503			—			—			1,138
Increase in other current assets		(245	)		—			—			—			(245	)
Decrease in inventory		158			—			—			—			158
Increase in accounts payable		4,507			2,086			—			—			6,593
Increase (decrease) in other current liabilities		(5,258	)		2,088			—			—			(3,170	)
Other		(2,482	)		(966	)		—			—			(3,448	)
Net cash provided by operating activities		142,236			133,733			4			—			275,973
Cash flows from investing activities:
Investment in oil and gas properties		(176,896	)		(133,659	)		(9,663	)		—			(320,218	)
Investment in fixed and other assets		(1,711	)		—			—			—			(1,711	)
Change in restricted funds		—			—			(3,515	)		—			(3,515	)
Investment in subsidiaries		(14,000	)		—			(13,404	)		27,404			—
Net cash used in investing activities		(192,607	)		(133,659	)		(26,582	)		27,404			(325,444	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—			—			(11	)
Excess tax benefits		104			—			—			—			104
Equity proceeds from parent		—			—			27,404			(27,404	)		—
Net payments for share based compensation		(3,590	)		—			—			—			(3,590	)
Net cash (used in) provided by financing activities		(3,497	)		—			27,404			(27,404	)		(3,497	)
Effect of exchange rate changes on cash		—			—			(186	)		—			(186	)
Net change in cash and cash equivalents		(53,868	)		74			640			—			(53,154	)
Cash and cash equivalents, beginning of period		228,398			51,128			—			—			279,526
Cash and cash equivalents, end of period	$	174,530		$	51,202		$	640		$	—		$	226,372

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	81,521		$	118,450		($	99	)	($	118,351	)	$	81,521
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		26,548			144,969			191			—			171,708
Accretion expense		285			16,065			171			—			16,521
Deferred income tax provision (benefit)		(20,154	)		66,628			—			—			46,474
Settlement of asset retirement obligations		—			(21,918	)		—			—			(21,918	)
Non-cash stock compensation expense		4,271			—			—			—			4,271
Excess tax benefits		(795	)		—			—			—			(795	)
Non-cash derivative income		—			(2,758	)		—			—			(2,758	)
Non-cash interest expense		5,278			—			—			—			5,278
Change in current income taxes		(3,921	)		—			—			—			(3,921	)
Change in intercompany receivables/payables		142,965			(142,720	)		(245	)		—			—
(Increase) decrease in accounts receivable		(36,705	)		(833	)		21			—			(37,517	)
Increase in other current assets		(124	)		—			—			—			(124	)
Decrease in inventory		36			—			—			—			36
Increase (decrease) in accounts payable		5,238			3,214			(39	)		—			8,413
Decrease in other current liabilities		(12,924	)		(4,380	)		—			—			(17,304	)
Other		(118,152	)		(663	)		(1	)		118,351			(465	)
Net cash provided by (used in) operating activities		73,367			176,054			(1	)		—			249,420
Cash flows from investing activities:
Investment in oil and gas properties		(129,792	)		(146,022	)		1			—			(275,813	)
Proceeds from sale of oil and gas properties, net of expenses		403			—			—			—			403
Sale of fixed assets		149			—			—			—			149
Investment in fixed and other assets		(1,900	)		—			—			—			(1,900	)
Net cash (used in) provided by investing activities		(131,140	)		(146,022	)		1			—			(277,161	)
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		795			—			—			—			795
Net payments for share based compensation		(3,141	)		—			—			—			(3,141	)
Net cash provided by financing activities		213,139			—			—			—			213,139
Net change in cash and cash equivalents		155,366			30,032			—			—			185,398
Cash and cash equivalents, beginning of period		37,389			926			136			—			38,451
Cash and cash equivalents, end of period	$	192,755		$	30,958		$	136		$	—		$	223,849

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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Operating revenue:
Oil production	$ 184,498	$ 182,181	$ 371,423	$ 383,939
Gas production	47,832	28,146	84,654	57,003
Natural gas liquids production	11,200	9,866	20,378	23,318
Other operational income	979	952	1,786	1,842
Derivative income, net	1,368	5,416	147	4,931
Total operating revenue	245,877	226,561	478,388	471,033
Operating expenses:
Lease operating expenses	50,517	51,555	103,561	96,035
Transportation, processing and gathering expenses	8,896	5,492	14,293	9,149
Production taxes	4,091	2,358	6,180	5,736
Depreciation, depletion and amortization	87,209	87,133	162,644	171,708
Accretion expense	8,318	8,255	16,581	16,521
Salaries, general and administrative expenses	15,198	13,143	29,150	26,848
Incentive compensation expense	2,050	2,398	3,481	3,840
Other operational expenses	73	71	145	113
Total operating expenses	176,352	170,405	336,035	329,950
Income from operations	69,525	56,156	142,353	141,083
Other (income) expenses:
Interest expense	8,895	7,684	18,530	13,415
Interest income	(115)	(79)	(232)	(110)
Other income	(682)	(366)	(1,408)	(786)
Total other (income) expenses	8,098	7,239	16,890	12,519
Income before income taxes	61,427	48,917	125,463	128,564
Provision (benefit) for income taxes:
Current	(6,993)	(665)	(10,739)	569
Deferred	29,398	19,035	56,422	46,474
Total income taxes	22,405	18,370	45,683	47,043
Net income	$ 39,022	$ 30,547	$ 79,780	$ 81,521
Basic earnings per share	$ 0.78	$ 0.62	$ 1.60	$ 1.65
Diluted earnings per share	$ 0.78	$ 0.62	$ 1.60	$ 1.65
Average shares outstanding	48,687	48,303	48,653	48,279
Average shares outstanding assuming dilution	48,725	48,344	48,691	48,322

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Long-Term Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Note 4 – Long-Term Debt

Long-term debt consisted of the following at:

	June 30, 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		245.5		239.1
7 1/2% Senior Notes due 2022		300.0		300.0
Bank debt		—		—
Total long-term debt	$	920.5	$	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 June 30 and August 5, 2013, we had no outstanding borrowings under our bank credit facility and letters of credit totaling $21.5 million had been issued pursuant to the facility, leaving $378.5 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 June 30, 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 June 28, 2013, our closing share price was $22.03. 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 June 30, 2013, the carrying amount of the liability component of the 2017 Convertible Notes was $245.5 million. During the three and six month-periods ended June 30, 2013, we recognized $3.2 million and $6.3 million, respectively, of interest expense for the amortization of the discount and $0.3 million and $0.6 million, respectively, of interest expense for the amortization of deferred financing costs related to the 2017 Convertible Notes. During the three and six month-periods ended June 30, 2013, we recognized $1.3 million and $2.6 million, respectively, of interest expense related to the contractual interest coupon on the 2017 Convertible Notes.

Senior Notes

During the three and six-month periods ended June 30, 2013, we recognized $0.4 million and $0.8 million, respectively, of interest expense for the amortization of deferred financing costs related to the 8 ⁵/₈% Senior Notes due 2017 (the “2017 Notes”). During the three and six-month periods ended June 30, 2013, we recognized $8.1 million and $16.2 million, respectively, of interest expense related to the contractual interest coupon on the 2017 Notes.

During the three and six-month periods ended June 30, 2013, we recognized $0.1 million and $0.3 million, respectively, 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 and six-month periods ended June 30, 2013, we recognized $5.6 million and $11.2 million, respectively, of interest expense related to the contractual interest coupon on the 2022 Notes.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Schedule of Changes In Accumulated Other Comprehensive Income Loss

Changes in accumulated other comprehensive income (loss) by component for the three and six-month periods ended June 30, 2013 were as follows (in millions):

	Cash Flow Hedges			Foreign Currency Items			Total
For the Three Months Ended June 30, 2013
Beginning balance, net of tax	$	10.5		$	—		$	10.5
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		30.0			—			30.0
Foreign currency translations		—			(0.5	)		(0.5	)
Income tax effect		(10.8	)		—			(10.8	)
Net of tax		19.2			(0.5	)		18.7
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(7.3	)		—			(7.3	)
Income tax effect		2.6			—			2.6
Net of tax		(4.7	)		—			(4.7	)
Other comprehensive income (loss), net of tax		14.5			(0.5	)		14.0
Ending balance, net of tax	$	25.0			($0.5	)	$	24.5
For the Six Months Ended June 30, 2013
Beginning balance, net of tax	$	28.8		$	—		$	28.8
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		9.9			—			9.9
Foreign currency translations		—			(0.5	)		(0.5	)
Income tax effect		(3.5	)		—			(3.5	)
Net of tax		6.4			(0.5	)		5.9
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(15.9	)		—			(15.9	)
Income tax effect		5.7			—			5.7
Net of tax		(10.2	)		—			(10.2	)
Other comprehensive income (loss), net of tax		(3.8	)		(0.5	)		(4.3	)
Ending balance, net of tax	$	25.0			($0.5	)	$	24.5

In 2012, the only component of accumulated other comprehensive income related to our cash flow hedges. Changes in accumulated other comprehensive income (loss) for the three and six-month periods ended June 30, 2012 were as follows (in millions):

	Cash Flow Hedges
For the Three Months Ended June 30, 2012
Beginning balance, net of tax		($0.2	)
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		108.1
Income tax effect		(38.9	)
Net of tax		69.2
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(9.4	)
Income tax effect		3.4
Net of tax		(6.0	)
Other comprehensive income, net of tax		63.2
Ending balance, net of tax	$	63.0
For the Six Months Ended June 30, 2012
Beginning balance, net of tax	$	21.9
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		72.6
Income tax effect		(26.1	)
Net of tax		46.5
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(8.4	)
Income tax effect		3.0
Net of tax		(5.4	)
Other comprehensive income, net of tax		41.1
Ending balance, net of tax	$	63.0

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share data)
Income (numerator):
Basic:
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Net income attributable to participating securities		(1,015	)		(734	)		(1,794	)		(1,681	)
Net income attributable to common stock—basic	$	38,007		$	29,813		$	77,986		$	79,840
Diluted:
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Net income attributable to participating securities		(1,015	)		(733	)		(1,793	)		(1,680	)
Net income attributable to common stock—diluted	$	38,007		$	29,814		$	77,987		$	79,841
Weighted average shares (denominator):
Weighted average shares—basic		48,687			48,303			48,653			48,279
Diluted effect of stock options		38			41			38			43
Weighted average shares—diluted		48,725			48,344			48,691			48,322
Basic earnings per share	$	0.78		$	0.62		$	1.60		$	1.65
Diluted earnings per share	$	0.78		$	0.62		$	1.60		$	1.65

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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 Combinations [Abstract]
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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Earnings Per Share - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock options outstanding	333,000	369,000	333,000	369,000
Shares of common stock issued upon vesting of restricted stock	45,000	23,000	336,000	255,000
Convertible Notes Due 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Long-term debt	1.75%		1.75%

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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		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Basic:
Net income	$ 39,022	$ 30,547	$ 79,780	$ 81,521
Net income attributable to participating securities	(1,015)	(734)	(1,794)	(1,681)
Net income attributable to common stock-basic	38,007	29,813	77,986	79,840
Diluted:
Net income	39,022	30,547	79,780	81,521
Net income attributable to participating securities	(1,015)	(733)	(1,793)	(1,680)
Net income attributable to common stock-diluted	$ 38,007	$ 29,814	$ 77,987	$ 79,841
Weighted average shares (denominator):
Weighted average shares-basic	48,687	48,303	48,653	48,279
Diluted effect of stock options	38	41	38	43
Weighted average shares-diluted	48,725	48,344	48,691	48,322
Basic earnings per share	$ 0.78	$ 0.62	$ 1.60	$ 1.65
Diluted earnings per share	$ 0.78	$ 0.62	$ 1.60	$ 1.65

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Condensed Consolidating Statement of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income (loss)	$ 79,780	$ 81,521
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	162,644	171,708
Accretion expense	16,581	16,521
Deferred income tax provision (benefit)	56,422	46,474
Settlement of asset retirement obligations	(37,335)	(21,918)
Non-cash stock compensation expense	4,866	4,271
Excess tax benefits	(104)	(795)
Non-cash derivative expense	311	(2,758)
Non-cash interest expense	8,181	5,278
Change in current income taxes	(16,399)	(3,921)
(Increase) decrease in accounts receivable	1,138	(37,517)
Increase in other current assets	(245)	(124)
Decrease in inventory	158	36
Increase (decrease) in accounts payable	6,593	8,413
Decrease in other current liabilities	(3,170)	(17,304)
Other	(3,448)	(465)
Net cash provided by (used in) operating activities	275,973	249,420
Cash flows from investing activities:
Investment in oil and gas properties	(320,218)	(275,813)
Proceeds from sale of oil and gas properties, net of expenses		403
Sale of fixed assets		149
Investment in fixed and other assets	(1,711)	(1,900)
Change in restricted funds	(3,515)
Net cash used in investing activities	(325,444)	(277,161)
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	795
Net payments for share based compensation	(3,590)	(3,141)
Net cash (used in) provided by financing activities	(3,497)	213,139
Effect of exchange rate changes on cash	(186)
Net change in cash and cash equivalents	(53,154)	185,398
Cash and cash equivalents, beginning of period	279,526	38,451
Cash and cash equivalents, end of period	226,372	223,849
Parent
Cash flows from operating activities:
Net income (loss)	79,780	81,521
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	35,279	26,548
Accretion expense	186	285
Deferred income tax provision (benefit)	(6,961)	(20,154)
Non-cash stock compensation expense	4,866	4,271
Excess tax benefits	(104)	(795)
Non-cash interest expense	8,181	5,278
Non-cash (income) loss from investment in subsidiaries	(112,722)
Change in current income taxes	(16,399)	(3,921)
Change in intercompany receivables/payables	170,815	142,965
(Increase) decrease in accounts receivable	(17,365)	(36,705)
Increase in other current assets	(245)	(124)
Decrease in inventory	158	36
Increase (decrease) in accounts payable	4,507	5,238
Decrease in other current liabilities	(5,258)	(12,924)
Other	(2,482)	(118,152)
Net cash provided by (used in) operating activities	142,236	73,367
Cash flows from investing activities:
Investment in oil and gas properties	(176,896)	(129,792)
Proceeds from sale of oil and gas properties, net of expenses		403
Sale of fixed assets		149
Investment in fixed and other assets	(1,711)	(1,900)
Investment in subsidiaries	(14,000)
Net cash used in investing activities	(192,607)	(131,140)
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	795
Net payments for share based compensation	(3,590)	(3,141)
Net cash (used in) provided by financing activities	(3,497)	213,139
Net change in cash and cash equivalents	(53,868)	155,366
Cash and cash equivalents, beginning of period	228,398	37,389
Cash and cash equivalents, end of period	174,530	192,755
Guarantor Subsidiary
Cash flows from operating activities:
Net income (loss)	112,762	118,450
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	127,365	144,969
Accretion expense	16,395	16,065
Deferred income tax provision (benefit)	63,383	66,628
Settlement of asset retirement obligations	(37,335)	(21,918)
Non-cash derivative expense	311	(2,758)
Change in intercompany receivables/payables	(170,859)	(142,720)
(Increase) decrease in accounts receivable	18,503	(833)
Increase (decrease) in accounts payable	2,086	3,214
Decrease in other current liabilities	2,088	(4,380)
Other	(966)	(663)
Net cash provided by (used in) operating activities	133,733	176,054
Cash flows from investing activities:
Investment in oil and gas properties	(133,659)	(146,022)
Net cash used in investing activities	(133,659)	(146,022)
Cash flows from financing activities:
Net change in cash and cash equivalents	74	30,032
Cash and cash equivalents, beginning of period	51,128	926
Cash and cash equivalents, end of period	51,202	30,958
Non-Guarantor Subsidiaries
Cash flows from operating activities:
Net income (loss)	(80)	(99)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		191
Accretion expense		171
Non-cash (income) loss from investment in subsidiaries	40
Change in intercompany receivables/payables	44	(245)
(Increase) decrease in accounts receivable		21
Increase (decrease) in accounts payable		(39)
Other		(1)
Net cash provided by (used in) operating activities	4	(1)
Cash flows from investing activities:
Investment in oil and gas properties	(9,663)	1
Change in restricted funds	(3,515)
Investment in subsidiaries	(13,404)
Net cash used in investing activities	(26,582)	1
Cash flows from financing activities:
Equity proceeds from parent	27,404
Net cash (used in) provided by financing activities	27,404
Effect of exchange rate changes on cash	(186)
Net change in cash and cash equivalents	640
Cash and cash equivalents, beginning of period		136
Cash and cash equivalents, end of period	640	136
Eliminations
Cash flows from operating activities:
Net income (loss)	(112,682)	(118,351)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Non-cash (income) loss from investment in subsidiaries	112,682
Other		118,351
Cash flows from investing activities:
Investment in subsidiaries	27,404
Net cash used in investing activities	27,404
Cash flows from financing activities:
Equity proceeds from parent	(27,404)
Net cash (used in) provided by financing activities	$ (27,404)

XML

Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Long-term debt	$ 920,485	$ 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	245,500	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

XML

Fair Value Measurements - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
8.625 % Senior Notes Due 2017
Debt Instrument [Line Items]
Long term debt, Fair Value	$ 397.5	$ 401.3
Convertible Notes Due 2017
Debt Instrument [Line Items]
Liability component of convertible note	254.7	249.6
7.5% Senior Notes due 2022
Debt Instrument [Line Items]
Liability component of convertible note	$ 316.5	$ 314.3

XML

Effect of Derivative Instruments in Statement of Operations (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Oil
Derivative Instruments, Gain (Loss) [Line Items]
Decrease/increase in oil revenue owing to effective hedging contracts	$ 5.3	$ 2.9	$ 9.9	$ 2.9
Natural Gas
Derivative Instruments, Gain (Loss) [Line Items]
Decrease/increase in gas revenue owing to effective hedging contracts	$ 2.0	$ 6.5	$ 6.0	$ 11.3

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Commitments And Contingencies Disclosure [Abstract]
Approximate asserted claims plus accrued interest assessed by Louisiana Department of Revenue	$ 30.2
Additional estimated assessments including interest by Louisiana Department of Revenue	3.4
Minimum potential range contingency loss	0
Maximum potential range contingency loss	$ 33.6

XML

Guarantor Financial Statements (Tables)

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	174,530		$	51,202		$	640		$	—		$	226,372
Accounts receivable		76,622			260,432			—			(170,904	)		166,150
Fair value of hedging contracts		—			30,053			—			—			30,053
Current income tax receivable		26,530			—			—			—			26,530
Deferred taxes *		2,947			12,706			—			—			15,653
Inventory		3,723			283			—			—			4,006
Other current assets		3,872			—			—			—			3,872
Total current assets		288,224			354,676			640			(170,904	)		472,636
Oil and gas properties, full cost method:
Proved		1,132,623			6,345,858			—			—			7,478,481
Less: accumulated DD&A		(403,585	)		(5,267,420	)		—			—			(5,671,005	)
Net proved oil and gas properties		729,038			1,078,438			—			—			1,807,476
Unevaluated		290,344			235,187			9,448			—			534,979
Other property and equipment, net		22,517			—			—			—			22,517
Fair value of hedging contracts		—			13,221			—			—			13,221
Other assets, net		50,056			1,584			3,426			—			55,066
Investment in subsidiary		858,749			—			12,841			(871,590	)		—
Total assets	$	2,238,928		$	1,683,106		$	26,355			($1,042,494	)	$	2,905,895
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	245,554		$	19,238		$	77			($170,904	)	$	93,965
Undistributed oil and gas proceeds		24,378			2,902			—			—			27,280
Accrued interest		18,059			—			—			—			18,059
Fair value of hedging contracts		—			1,880			—			—			1,880
Asset retirement obligations		—			63,646			—			—			63,646
Other current liabilities		8,945			760			—			—			9,705
Total current liabilities		296,936			88,426			77			(170,904	)		214,535
Long-term debt		920,485			—			—			—			920,485
Deferred taxes *		38,609			327,468			—			—			366,077
Asset retirement obligations		5,665			414,752			—			—			420,417
Fair value of hedging contracts		—			436			—			—			436
Other long-term liabilities		26,197			6,712			—			—			32,909
Total liabilities		1,287,892			837,794			77			(170,904	)		1,954,859
Commitments and contingencies
Stockholders’ equity:
Common stock		487			—			—			—			487
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,389,898			1,496,509			27,404			(1,523,913	)		1,389,898
Accumulated deficit		(463,019	)		(676,250	)		(80	)		676,330			(463,019	)
Accumulated other comprehensive income (loss)		24,530			25,053			(1,046	)		(24,007	)		24,530
Total stockholders’ equity		951,036			845,312			26,278			(871,590	)		951,036
Total liabilities and stockholders’ equity	$	2,238,928		$	1,683,106		$	26,355			($1,042,494	)	$	2,905,895

* 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 JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	8,378		$	176,120		$	—		$	—		$	184,498
Gas production		20,071			27,761			—			—			47,832
Natural gas liquids production		6,378			4,822			—			—			11,200
Other operational income		790			189			—			—			979
Derivative income, net		—			1,368			—			—			1,368
Total operating revenue		35,617			210,260			—			—			245,877
Operating expenses:
Lease operating expenses		3,425			47,092			—			—			50,517
Transportation, processing and gathering expenses		5,729			3,167			—			—			8,896
Production taxes		1,320			2,771			—			—			4,091
Depreciation, depletion, amortization		25,088			62,121			—			—			87,209
Accretion expense		93			8,225			—			—			8,318
Salaries, general and administrative		15,150			—			48			—			15,198
Incentive compensation expense		2,050			—			—			—			2,050
Other operational expenses		51			22			—			—			73
Total operating expenses		52,906			123,398			48			—			176,352
Income (loss) from operations		(17,289	)		86,862			(48	)		—			69,525
Other (income) expenses:
Interest expense		8,882			13			—			—			8,895
Interest income		(70	)		(38	)		(7	)		—			(115	)
Other income		(217	)		(465	)		—			—			(682	)
(Income) loss from investment in subsidiaries		(55,893	)		—			39			55,854			—
Total other (income) expenses		(47,298	)		(490	)		32			55,854			8,098
Income (loss) before taxes		30,009			87,352			(80	)		(55,854	)		61,427
Provision (benefit) for income taxes:
Current		(6,993	)		—			—			—			(6,993	)
Deferred		(2,020	)		31,418			—			—			29,398
Total income taxes		(9,013	)		31,418			—			—			22,405
Net income (loss)	$	39,022		$	55,934			($80	)		($55,854	)	$	39,022
Comprehensive income (loss)	$	53,060		$	55,934			($80	)		($55,854	)	$	53,060

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,813		$	175,368		$	—		$	—		$	182,181
Gas production		5,865			22,281			—			—			28,146
Natural gas liquids production		1,710			8,156			—			—			9,866
Other operational income		762			77			113			—			952
Derivative income, net		—			5,416			—			—			5,416
Total operating revenue		15,150			211,298			113			—			226,561
Operating expenses:
Lease operating expenses		6,318			45,443			(206	)		—			51,555
Transportation, processing and gathering expenses		1,710			3,782			—			—			5,492
Production taxes		507			1,851			—			—			2,358
Depreciation, depletion, amortization		15,071			71,969			93			—			87,133
Accretion expense		137			8,033			85			—			8,255
Salaries, general and administrative		14,190			(1,047	)		—			—			13,143
Incentive compensation expense		2,398			—			—			—			2,398
Other operational expenses		47			24			—			—			71
Total operating expenses		40,378			130,055			(28	)		—			170,405
Income (loss) from operations		(25,228	)		81,243			141			—			56,156
Other (income) expenses:
Interest expense		7,672			12			—			—			7,684
Interest income		(74	)		(5	)		—			—			(79	)
Other income		(4	)		(362	)		—			—			(366	)
Income from investment in subsidiaries		(52,313	)		(140	)		—			52,453			—
Total other (income) expenses		(44,719	)		(495	)		—			52,453			7,239
Income before taxes		19,491			81,738			141			(52,453	)		48,917
Provision (benefit) for income taxes:
Current		(665	)		—			—			—			(665	)
Deferred		(10,391	)		29,426			—			—			19,035
Total income taxes		(11,056	)		29,426			—			—			18,370
Net income	$	30,547		$	52,312		$	141			($52,453	)	$	30,547
Comprehensive income	$	93,749		$	52,312		$	141			($52,453	)	$	93,749

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	13,721		$	357,702		$	—		$	—		$	371,423
Gas production		27,269			57,385			—			—			84,654
Natural gas liquids production		8,677			11,701			—			—			20,378
Other operational income		1,439			347			—			—			1,786
Derivative income, net		—			147			—			—			147
Total operating revenue		51,106			427,282			—			—			478,388
Operating expenses:
Lease operating expenses		5,716			97,845			—			—			103,561
Transportation, processing and gathering expenses		7,781			6,512			—			—			14,293
Production taxes		2,187			3,993			—			—			6,180
Depreciation, depletion, amortization		35,279			127,365			—			—			162,644
Accretion expense		186			16,395			—			—			16,581
Salaries, general and administrative		29,098			4			48			—			29,150
Incentive compensation expense		3,481			—			—			—			3,481
Other operational expenses		101			44			—			—			145
Total operating expenses		83,829			252,158			48			—			336,035
Income (loss) from operations		(32,723	)		175,124			(48	)		—			142,353
Other (income) expenses:
Interest expense		18,509			21			—			—			18,530
Interest income		(150	)		(75	)		(7	)		—			(232	)
Other income		(441	)		(967	)		—			—			(1,408	)
(Income) loss from investment in subsidiaries		(112,721	)		—			39			112,682			—
Total other (income) expenses		(94,803	)		(1,021	)		32			112,682			16,890
Income (loss) before taxes		62,080			176,145			(80	)		(112,682	)		125,463
Provision (benefit) for income taxes:
Current		(10,739	)		—			—			—			(10,739	)
Deferred		(6,961	)		63,383			—			—			56,422
Total income taxes		(17,700	)		63,383			—			—			45,683
Net income (loss)	$	79,780		$	112,762			($80	)		($112,682	)	$	79,780
Comprehensive income (loss)	$	75,477		$	112,762			($80	)		($112,682	)	$	75,477

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	13,047		$	370,892		$	—		$	—		$	383,939
Gas production		11,496			45,507			—			—			57,003
Natural gas liquids production		5,574			17,744			—			—			23,318
Other operational income		1,456			140			246			—			1,842
Derivative income, net		—			4,931			—			—			4,931
Total operating revenue		31,573			439,214			246			—			471,033
Operating expenses:
Lease operating expenses		11,222			84,830			(17	)		—			96,035
Transportation, processing and gathering expenses		4,198			4,951			—			—			9,149
Production taxes		1,670			4,066			—			—			5,736
Depreciation, depletion, amortization		26,548			144,969			191			—			171,708
Accretion expense		285			16,065			171			—			16,521
Salaries, general and administrative		26,844			4			—			—			26,848
Incentive compensation expense		3,840			—			—			—			3,840
Other operational expenses		89			24			—			—			113
Total operating expenses		74,696			254,909			345			—			329,950
Income (loss) from operations		(43,123	)		184,305			(99	)		—			141,083
Other (income) expenses:
Interest expense		13,518			(103	)		—			—			13,415
Interest income		(104	)		(6	)		—			—			(110	)
Other income		(23	)		(763	)		—			—			(786	)
(Income) loss from investment in subsidiaries		(118,450	)		99			—			118,351			—
Total other (income) expenses		(105,059	)		(773	)		—			118,351			12,519
Income (loss) before taxes		61,936			185,078			(99	)		(118,351	)		128,564
Provision (benefit) for income taxes:
Current		569			—			—			—			569
Deferred		(20,154	)		66,628			—			—			46,474
Total income taxes		(19,585	)		66,628			—			—			47,043
Net income (loss)	$	81,521		$	118,450			($99	)		($118,351	)	$	81,521
Comprehensive income (loss)	$	122,658		$	118,450			($99	)		($118,351	)	$	122,658

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	79,780		$	112,762			($80	)	($	112,682	)	$	79,780
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		35,279			127,365			—			—			162,644
Accretion expense		186			16,395			—			—			16,581
Deferred income tax provision (benefit)		(6,961	)		63,383			—			—			56,422
Settlement of asset retirement obligations		—			(37,335	)		—			—			(37,335	)
Non-cash stock compensation expense		4,866			—			—			—			4,866
Excess tax benefits		(104	)		—			—			—			(104	)
Non-cash derivative expense		—			311			—			—			311
Non-cash interest expense		8,181			—			—			—			8,181
Non-cash (income) loss from investment in subsidiaries		(112,722	)		—			40			112,682			—
Change in current income taxes		(16,399	)		—			—			—			(16,399	)
Change in intercompany receivables/payables		170,815			(170,859	)		44			—			—
(Increase) decrease in accounts receivable		(17,365	)		18,503			—			—			1,138
Increase in other current assets		(245	)		—			—			—			(245	)
Decrease in inventory		158			—			—			—			158
Increase in accounts payable		4,507			2,086			—			—			6,593
Increase (decrease) in other current liabilities		(5,258	)		2,088			—			—			(3,170	)
Other		(2,482	)		(966	)		—			—			(3,448	)
Net cash provided by operating activities		142,236			133,733			4			—			275,973
Cash flows from investing activities:
Investment in oil and gas properties		(176,896	)		(133,659	)		(9,663	)		—			(320,218	)
Investment in fixed and other assets		(1,711	)		—			—			—			(1,711	)
Change in restricted funds		—			—			(3,515	)		—			(3,515	)
Investment in subsidiaries		(14,000	)		—			(13,404	)		27,404			—
Net cash used in investing activities		(192,607	)		(133,659	)		(26,582	)		27,404			(325,444	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—			—			(11	)
Excess tax benefits		104			—			—			—			104
Equity proceeds from parent		—			—			27,404			(27,404	)		—
Net payments for share based compensation		(3,590	)		—			—			—			(3,590	)
Net cash (used in) provided by financing activities		(3,497	)		—			27,404			(27,404	)		(3,497	)
Effect of exchange rate changes on cash		—			—			(186	)		—			(186	)
Net change in cash and cash equivalents		(53,868	)		74			640			—			(53,154	)
Cash and cash equivalents, beginning of period		228,398			51,128			—			—			279,526
Cash and cash equivalents, end of period	$	174,530		$	51,202		$	640		$	—		$	226,372

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2012

(In thousands)

	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	81,521		$	118,450		($	99	)	($	118,351	)	$	81,521
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		26,548			144,969			191			—			171,708
Accretion expense		285			16,065			171			—			16,521
Deferred income tax provision (benefit)		(20,154	)		66,628			—			—			46,474
Settlement of asset retirement obligations		—			(21,918	)		—			—			(21,918	)
Non-cash stock compensation expense		4,271			—			—			—			4,271
Excess tax benefits		(795	)		—			—			—			(795	)
Non-cash derivative income		—			(2,758	)		—			—			(2,758	)
Non-cash interest expense		5,278			—			—			—			5,278
Change in current income taxes		(3,921	)		—			—			—			(3,921	)
Change in intercompany receivables/payables		142,965			(142,720	)		(245	)		—			—
(Increase) decrease in accounts receivable		(36,705	)		(833	)		21			—			(37,517	)
Increase in other current assets		(124	)		—			—			—			(124	)
Decrease in inventory		36			—			—			—			36
Increase (decrease) in accounts payable		5,238			3,214			(39	)		—			8,413
Decrease in other current liabilities		(12,924	)		(4,380	)		—			—			(17,304	)
Other		(118,152	)		(663	)		(1	)		118,351			(465	)
Net cash provided by (used in) operating activities		73,367			176,054			(1	)		—			249,420
Cash flows from investing activities:
Investment in oil and gas properties		(129,792	)		(146,022	)		1			—			(275,813	)
Proceeds from sale of oil and gas properties, net of expenses		403			—			—			—			403
Sale of fixed assets		149			—			—			—			149
Investment in fixed and other assets		(1,900	)		—			—			—			(1,900	)
Net cash (used in) provided by investing activities		(131,140	)		(146,022	)		1			—			(277,161	)
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		795			—			—			—			795
Net payments for share based compensation		(3,141	)		—			—			—			(3,141	)
Net cash provided by financing activities		213,139			—			—			—			213,139
Net change in cash and cash equivalents		155,366			30,032			—			—			185,398
Cash and cash equivalents, beginning of period		37,389			926			136			—			38,451
Cash and cash equivalents, end of period	$	192,755		$	30,958		$	136		$	—		$	223,849

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income	$ 79,780	$ 81,521
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	162,644	171,708
Accretion expense	16,581	16,521
Deferred income tax provision	56,422	46,474
Settlement of asset retirement obligations	(37,335)	(21,918)
Non-cash stock compensation expense	4,866	4,271
Excess tax benefits	(104)	(795)
Non-cash derivative (income) expense	311	(2,758)
Non-cash interest expense	8,181	5,278
Change in current income taxes	(16,399)	(3,921)
(Increase) decrease in accounts receivable	1,138	(37,517)
Increase in other current assets	(245)	(124)
Decrease in inventory	158	36
Increase in accounts payable	6,593	8,413
Decrease in other current liabilities	(3,170)	(17,304)
Other	(3,448)	(465)
Net cash provided by (used in) operating activities	275,973	249,420
Cash flows from investing activities:
Investment in oil and gas properties	(320,218)	(275,813)
Proceeds from sale of oil and gas properties, net of expenses		403
Sale of fixed assets		149
Investment in fixed and other assets	(1,711)	(1,900)
Change in restricted funds	(3,515)
Net cash used in investing activities	(325,444)	(277,161)
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	795
Net payments for share based compensation	(3,590)	(3,141)
Net cash (used in) provided by financing activities	(3,497)	213,139
Effect of exchange rate changes on cash	(186)
Net change in cash and cash equivalents	(53,154)	185,398
Cash and cash equivalents, beginning of period	279,526	38,451
Cash and cash equivalents, end of period	$ 226,372	$ 223,849

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Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share data)
Income (numerator):
Basic:
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Net income attributable to participating securities		(1,015	)		(734	)		(1,794	)		(1,681	)
Net income attributable to common stock—basic	$	38,007		$	29,813		$	77,986		$	79,840
Diluted:
Net income	$	39,022		$	30,547		$	79,780		$	81,521
Net income attributable to participating securities		(1,015	)		(733	)		(1,793	)		(1,680	)
Net income attributable to common stock—diluted	$	38,007		$	29,814		$	77,987		$	79,841
Weighted average shares (denominator):
Weighted average shares—basic		48,687			48,303			48,653			48,279
Diluted effect of stock options		38			41			38			43
Weighted average shares—diluted		48,725			48,344			48,691			48,322
Basic earnings per share	$	0.78		$	0.62		$	1.60		$	1.65
Diluted earnings per share	$	0.78		$	0.62		$	1.60		$	1.65

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 333,000 and 369,000 shares during the three and six-month periods ended June 30, 2013 and 2012, respectively.

During the three months ended June 30, 2013 and 2012, respectively, approximately 45,000 and 23,000 shares of common stock were issued from authorized shares upon the vesting (lapse of forfeiture restrictions) of restricted stock by employees and nonemployee directors. During the six months ended June 30, 2013 and 2012, respectively, approximately 336,000 and 255,000 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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Asset Retirement Obligations

6 Months Ended

Jun. 30, 2013

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

Note 5 – Asset Retirement Obligations

The change in our asset retirement obligations during the six months ended June 30, 2013 is set forth below:

	Six Months Ended June  30, 2013
	(in millions)
Asset retirement obligations as of the beginning of the period, including current portion	$	488.3
Liabilities incurred		16.5
Liabilities settled		(37.3	)
Accretion expense		16.6
Asset retirement obligations as of the end of the period, including current portion	$	484.1

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

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 stockholders’ 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 June 30, 2013 and December 31, 2012 were designated as effective cash flow hedges; however, during the three and six-month periods ended June 30, 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 June 30, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at June 30, 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	$	30.1	Current liabilities: Fair value of hedging contracts		($1.9	)
	Long-term assets: Fair value of hedging contracts		13.2	Long-term liabilities: Fair value of hedging contracts		(0.4	)
		$	43.3			($2.3	)
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 tables disclose the effect of derivative instruments in the statement of operations for the three and six-month periods ended June 30, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended June 30, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives				Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013		2012		Location	2013		2012		Location	2013		2012
Commodity contracts	$	30.0	$	108.1	Operating revenue— oil/gas production	$	7.3	$	9.4	Derivative income, net	$	1.4	$	5.4
Total	$	30.0	$	108.1		$	7.3	$	9.4		$	1.4	$	5.4

(a) For the three months ended June 30, 2013, effective hedging contracts increased oil revenue by $5.3 million and increased gas revenue by $2.0 million. For the three months ended June 30, 2012, effective hedging contracts increased oil revenue by $2.9 million and increased gas revenue by $6.5 million.

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended June 30, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives				Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013		2012		Location	2013		2012		Location	2013		2012
Commodity contracts	$	9.9	$	72.6	Operating revenue— oil/gas production	$	15.9	$	8.4	Derivative income, net	$	0.1	$	4.9
Total	$	9.9	$	72.6		$	15.9	$	8.4		$	0.1	$	4.9

(a) For the six months ended June 30, 2013, effective hedging contracts increased oil revenue by $9.9 million and increased gas revenue by $6.0 million. For the six months ended June 30, 2012, effective hedging contracts decreased oil revenue by $2.9 million and increased gas revenue by $11.3 million.

At June 30, 2013, we had accumulated other comprehensive income of $25.0 million, net of tax, related to the fair value of our swap contracts that were outstanding as of June 30, 2013. We believe that approximately $17.2 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 June 30, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	30.1			($1.8	)	$	28.3
Long-term assets: Fair value of hedging contracts		13.2			(0.5	)		12.7
Current liabilities: Fair value of hedging contracts		(1.9	)		1.9			—
Long-term liabilities: Fair value of hedging contracts		(0.4	)		0.4			—

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of August 5, 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			92.25
2014		10,000			4.105		1,000			93.55
2014		10,000			4.190		1,000			94.00
2014		10,000			4.250		1,000			98.00
2014		10,000			4.350		1,000			98.30
2014							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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Schedule of Changes In Accumulated Other Comprehensive Income Loss (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, net of tax	$ 10,500,000		$ 28,833,000
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives	30,000,000		9,900,000
Foreign currency translations	(500,000)		(500,000)
Income tax effect	(10,800,000)		(3,500,000)
Net of tax	18,700,000		5,900,000
Amounts reclassified from accumulated other comprehensive income:
Net of tax	(4,700,000)		(10,200,000)
Other comprehensive income (loss), net of tax	14,000,000		(4,300,000)
Ending balance, net of tax	24,530,000		24,530,000
Cash Flow Hedging
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, net of tax	10,500,000	(200,000)	28,833,000	21,900,000
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives	30,000,000	108,100,000	9,900,000	72,600,000
Income tax effect	(10,800,000)	(38,900,000)	(3,500,000)	(26,100,000)
Net of tax	19,200,000	69,200,000	6,400,000	46,500,000
Amounts reclassified from accumulated other comprehensive income:
Net of tax	(4,700,000)	(6,000,000)	(10,200,000)	(5,400,000)
Other comprehensive income (loss), net of tax	14,500,000	63,200,000	(3,800,000)	41,100,000
Ending balance, net of tax	25,000,000	63,000,000	25,000,000	63,000,000
Reclassification out of Accumulated Other Comprehensive Income
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production	(7,300,000)		(15,900,000)
Income tax effect	2,600,000		5,700,000
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedging
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production	(7,300,000)	(9,400,000)	(15,900,000)	(8,400,000)
Income tax effect	2,600,000	3,400,000	5,700,000	3,000,000
Foreign Currency Gain (Loss)
Other comprehensive income (loss) before reclassifications:
Foreign currency translations	(500,000)		(500,000)
Net of tax	(500,000)		(500,000)
Amounts reclassified from accumulated other comprehensive income:
Other comprehensive income (loss), net of tax	(500,000)		(500,000)
Ending balance, net of tax	$ (500,000)		$ (500,000)

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Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Derivative Instruments And Hedging Activities Disclosure [Abstract]
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)	$ 24,530,000	$ 10,500,000	$ 28,833,000
Accumulated other comprehensive income, to be reclassified into earning in the next twelve months	$ 17,200,000

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Impact of Rights of Offset Associated with Recognized Assets and Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Current Asset
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	$ 30.1
Long-term assets
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	13.2
Current liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	(1.9)
Long-term liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	(0.4)
Effects of Netting | Current Asset
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	(1.8)
Effects of Netting | Long-term assets
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	(0.5)
Effects of Netting | Current liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	1.9
Effects of Netting | Long-term liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities	0.4
With Effects of Netting | Current Asset
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	28.3
With Effects of Netting | Long-term assets
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Assets	12.7
With Effects of Netting | Current liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities
With Effects of Netting | Long-term liabilities
Derivative Instruments And Hedging Activities [Line Items]
Fair Value of Derivative Instruments, Liabilities

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Acquisitions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 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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Condensed Consolidating Statement of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Operating revenue:
Oil production	$ 184,498	$ 182,181	$ 371,423	$ 383,939
Gas production	47,832	28,146	84,654	57,003
Natural gas liquids production	11,200	9,866	20,378	23,318
Other operational income	979	952	1,786	1,842
Derivative income, net	1,368	5,416	147	4,931
Total operating revenue	245,877	226,561	478,388	471,033
Operating expenses:
Lease operating expenses	50,517	51,555	103,561	96,035
Transportation, processing and gathering expenses	8,896	5,492	14,293	9,149
Production taxes	4,091	2,358	6,180	5,736
Depreciation, depletion, amortization	87,209	87,133	162,644	171,708
Accretion expense	8,318	8,255	16,581	16,521
Salaries, general and administrative	15,198	13,143	29,150	26,848
Incentive compensation expense	2,050	2,398	3,481	3,840
Other operational expenses	73	71	145	113
Total operating expenses	176,352	170,405	336,035	329,950
Income (loss) from operations	69,525	56,156	142,353	141,083
Other (income) expenses:
Interest expense	8,895	7,684	18,530	13,415
Interest income	(115)	(79)	(232)	(110)
Other income	(682)	(366)	(1,408)	(786)
Total other (income) expenses	8,098	7,239	16,890	12,519
Income (loss) before taxes	61,427	48,917	125,463	128,564
Provision (benefit) for income taxes:
Current	(6,993)	(665)	(10,739)	569
Deferred	29,398	19,035	56,422	46,474
Total income taxes	22,405	18,370	45,683	47,043
Net income	39,022	30,547	79,780	81,521
Comprehensive income	53,060	93,749	75,477	122,658
Parent
Operating revenue:
Oil production	8,378	6,813	13,721	13,047
Gas production	20,071	5,865	27,269	11,496
Natural gas liquids production	6,378	1,710	8,677	5,574
Other operational income	790	762	1,439	1,456
Total operating revenue	35,617	15,150	51,106	31,573
Operating expenses:
Lease operating expenses	3,425	6,318	5,716	11,222
Transportation, processing and gathering expenses	5,729	1,710	7,781	4,198
Production taxes	1,320	507	2,187	1,670
Depreciation, depletion, amortization	25,088	15,071	35,279	26,548
Accretion expense	93	137	186	285
Salaries, general and administrative	15,150	14,190	29,098	26,844
Incentive compensation expense	2,050	2,398	3,481	3,840
Other operational expenses	51	47	101	89
Total operating expenses	52,906	40,378	83,829	74,696
Income (loss) from operations	(17,289)	(25,228)	(32,723)	(43,123)
Other (income) expenses:
Interest expense	8,882	7,672	18,509	13,518
Interest income	(70)	(74)	(150)	(104)
Other income	(217)	(4)	(441)	(23)
(Income) from investment in subsidiaries	(55,893)	(52,313)	(112,721)	(118,450)
Total other (income) expenses	(47,298)	(44,719)	(94,803)	(105,059)
Income (loss) before taxes	30,009	19,491	62,080	61,936
Provision (benefit) for income taxes:
Current	(6,993)	(665)	(10,739)	569
Deferred	(2,020)	(10,391)	(6,961)	(20,154)
Total income taxes	(9,013)	(11,056)	(17,700)	(19,585)
Net income	39,022	30,547	79,780	81,521
Comprehensive income	53,060	93,749	75,477	122,658
Guarantor Subsidiary
Operating revenue:
Oil production	176,120	175,368	357,702	370,892
Gas production	27,761	22,281	57,385	45,507
Natural gas liquids production	4,822	8,156	11,701	17,744
Other operational income	189	77	347	140
Derivative income, net	1,368	5,416	147	4,931
Total operating revenue	210,260	211,298	427,282	439,214
Operating expenses:
Lease operating expenses	47,092	45,443	97,845	84,830
Transportation, processing and gathering expenses	3,167	3,782	6,512	4,951
Production taxes	2,771	1,851	3,993	4,066
Depreciation, depletion, amortization	62,121	71,969	127,365	144,969
Accretion expense	8,225	8,033	16,395	16,065
Salaries, general and administrative		(1,047)	4	4
Other operational expenses	22	24	44	24
Total operating expenses	123,398	130,055	252,158	254,909
Income (loss) from operations	86,862	81,243	175,124	184,305
Other (income) expenses:
Interest expense	13	12	21	(103)
Interest income	(38)	(5)	(75)	(6)
Other income	(465)	(362)	(967)	(763)
(Income) from investment in subsidiaries		(140)		99
Total other (income) expenses	(490)	(495)	(1,021)	(773)
Income (loss) before taxes	87,352	81,738	176,145	185,078
Provision (benefit) for income taxes:
Deferred	31,418	29,426	63,383	66,628
Total income taxes	31,418	29,426	63,383	66,628
Net income	55,934	52,312	112,762	118,450
Comprehensive income	55,934	52,312	112,762	118,450
Non-Guarantor Subsidiaries
Operating revenue:
Other operational income		113		246
Total operating revenue		113		246
Operating expenses:
Lease operating expenses		(206)		(17)
Depreciation, depletion, amortization		93		191
Accretion expense		85		171
Salaries, general and administrative	48		48
Total operating expenses	48	(28)	48	345
Income (loss) from operations	(48)	141	(48)	(99)
Other (income) expenses:
Interest income	(7)		(7)
(Income) from investment in subsidiaries	39		39
Total other (income) expenses	32		32
Income (loss) before taxes	(80)	141	(80)	(99)
Provision (benefit) for income taxes:
Net income	(80)	141	(80)	(99)
Comprehensive income	(80)	141	(80)	(99)
Eliminations
Other (income) expenses:
(Income) from investment in subsidiaries	55,854	52,453	112,682	118,351
Total other (income) expenses	55,854	52,453	112,682	118,351
Income (loss) before taxes	(55,854)	(52,453)	(112,682)	(118,351)
Provision (benefit) for income taxes:
Net income	(55,854)	(52,453)	(112,682)	(118,351)
Comprehensive income	$ (55,854)	$ (52,453)	$ (112,682)	$ (118,351)

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CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	48,728,810	48,392,552
Treasury stock, shares	16,582	16,582

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 8 – Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the three and six-month periods ended June 30, 2013 were as follows (in millions):

	Cash Flow Hedges			Foreign Currency Items			Total
For the Three Months Ended June 30, 2013
Beginning balance, net of tax	$	10.5		$	—		$	10.5
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		30.0			—			30.0
Foreign currency translations		—			(0.5	)		(0.5	)
Income tax effect		(10.8	)		—			(10.8	)
Net of tax		19.2			(0.5	)		18.7
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(7.3	)		—			(7.3	)
Income tax effect		2.6			—			2.6
Net of tax		(4.7	)		—			(4.7	)
Other comprehensive income (loss), net of tax		14.5			(0.5	)		14.0
Ending balance, net of tax	$	25.0			($0.5	)	$	24.5
For the Six Months Ended June 30, 2013
Beginning balance, net of tax	$	28.8		$	—		$	28.8
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		9.9			—			9.9
Foreign currency translations		—			(0.5	)		(0.5	)
Income tax effect		(3.5	)		—			(3.5	)
Net of tax		6.4			(0.5	)		5.9
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(15.9	)		—			(15.9	)
Income tax effect		5.7			—			5.7
Net of tax		(10.2	)		—			(10.2	)
Other comprehensive income (loss), net of tax		(3.8	)		(0.5	)		(4.3	)
Ending balance, net of tax	$	25.0			($0.5	)	$	24.5

In 2012, the only component of accumulated other comprehensive income related to our cash flow hedges. Changes in accumulated other comprehensive income (loss) for the three and six-month periods ended June 30, 2012 were as follows (in millions):

	Cash Flow Hedges
For the Three Months Ended June 30, 2012
Beginning balance, net of tax		($0.2	)
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		108.1
Income tax effect		(38.9	)
Net of tax		69.2
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(9.4	)
Income tax effect		3.4
Net of tax		(6.0	)
Other comprehensive income, net of tax		63.2
Ending balance, net of tax	$	63.0
For the Six Months Ended June 30, 2012
Beginning balance, net of tax	$	21.9
Other comprehensive income (loss) before reclassifications:
Change in fair value of derivatives		72.6
Income tax effect		(26.1	)
Net of tax		46.5
Amounts reclassified from accumulated other comprehensive income:
Operating revenue: oil/gas production		(8.4	)
Income tax effect		3.0
Net of tax		(5.4	)
Other comprehensive income, net of tax		41.1
Ending balance, net of tax	$	63.0

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 39,022	$ 30,547	$ 79,780	$ 81,521
Other comprehensive income (loss), net of tax effect:
Derivatives	14,561	63,202	(3,780)	41,137
Foreign currency items	(523)		(523)
Comprehensive income	$ 53,060	$ 93,749	$ 75,477	$ 122,658

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CONDENSED CONSOLIDATED BALANCE SHEET (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Mar. 31, 2013	Dec. 31, 2012		Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 226,372			$ 279,526		$ 223,849	$ 38,451
Accounts receivable	166,150			167,288
Fair value of hedging contracts	30,053			39,655
Current income tax receivable	26,530			10,027
Deferred taxes	15,653	[1]		15,514	[1]
Inventory	4,006			4,207
Other current assets	3,872			3,626
Total current assets	472,636			519,843
Oil and gas properties, full cost method of accounting:
Proved	7,478,481			7,244,466
Less: accumulated depreciation, depletion and amortization	(5,671,005)			(5,510,166)
Net proved oil and gas properties	1,807,476			1,734,300
Unevaluated	534,979			447,795
Other property and equipment, net	22,517			22,115
Fair value of hedging contracts	13,221			9,199
Other assets, net	55,066			43,179
Total assets	2,905,895			2,776,431
Current liabilities:
Accounts payable to vendors	93,965			94,361
Undistributed oil and gas proceeds	27,280			23,414
Accrued interest	18,059			18,546
Fair value of hedging contracts	1,880			149
Asset retirement obligations	63,646			66,260
Other current liabilities	9,705			16,765
Total current liabilities	214,535			219,495
Long-term debt	920,485			914,126
Deferred taxes	366,077	[1]		310,830	[1]
Asset retirement obligations	420,417			422,042
Fair value of hedging contracts	436			1,530
Other long-term liabilities	32,909			36,275
Total liabilities	1,954,859			1,904,298
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; authorized 100,000,000 shares; issued 48,728,810 and 48,392,552 shares, respectively	487			484
Treasury stock (16,582 shares, at cost)	(860)			(860)
Additional paid-in capital	1,389,898			1,386,475
Accumulated deficit	(463,019)			(542,799)
Accumulated other comprehensive income	24,530		10,500	28,833
Total stockholders' equity	951,036			872,133
Total liabilities and stockholders' equity	$ 2,905,895			$ 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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Location and Fair Value Amounts of Derivative Instruments Reported in Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	$ (1.9)
Long-term liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(0.4)
Current Asset
Asset Derivatives
Fair Value of Derivative Instruments, Assets	30.1
Long-term assets
Asset Derivatives
Fair Value of Derivative Instruments, Assets	13.2
Commodity Contracts
Asset Derivatives
Fair Value of Derivative Instruments, Assets	43.3	48.9
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(2.3)	(1.6)
Commodity Contracts | Current liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(1.9)	(0.1)
Commodity Contracts | Long-term liabilities
Liability Derivatives
Fair Value of Derivative Instruments, Liabilities	(0.4)	(1.5)
Commodity Contracts | Current Asset
Asset Derivatives
Fair Value of Derivative Instruments, Assets	30.1	39.7
Commodity Contracts | Long-term assets
Asset Derivatives
Fair Value of Derivative Instruments, Assets	$ 13.2	$ 9.2

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

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 June 30, 2013:

	Fair Value Measurements at June 30, 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	$	13.8		$	13.8	$	—		$	—
Hedging contracts		43.3			—		43.3			—
Total	$	57.1		$	13.8	$	43.3		$	—
	Fair Value Measurements at June 30, 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		($2.3	)	$	—		($2.3	)	$	—
Total		($2.3	)	$	—		($2.3	)	$	—

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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Condensed Consolidating Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Mar. 31, 2013	Dec. 31, 2012		Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 226,372			$ 279,526		$ 223,849	$ 38,451
Accounts receivable	166,150			167,288
Fair value of hedging contracts	30,053			39,655
Current income tax receivable	26,530			10,027
Deferred taxes	15,653	[1]		15,514	[1]
Inventory	4,006			4,207
Other current assets	3,872			3,626
Total current assets	472,636			519,843
Oil and gas properties, full cost method:
Proved	7,478,481			7,244,466
Less: accumulated DD&A	(5,671,005)			(5,510,166)
Net proved oil and gas properties	1,807,476			1,734,300
Unevaluated	534,979			447,795
Other property and equipment, net	22,517			22,115
Fair value of hedging contracts	13,221			9,199
Other assets, net	55,066			43,179
Total assets	2,905,895			2,776,431
Current liabilities:
Accounts payable to vendors	93,965			94,361
Undistributed oil and gas proceeds	27,280			23,414
Accrued interest	18,059			18,546
Fair value of hedging contracts	1,880			149
Asset retirement obligations	63,646			66,260
Other current liabilities	9,705			16,765
Total current liabilities	214,535			219,495
Long-term debt	920,485			914,126
Deferred taxes	366,077	[1]		310,830	[1]
Asset retirement obligations	420,417			422,042
Fair value of hedging contracts	436			1,530
Other long-term liabilities	32,909			36,275
Total liabilities	1,954,859			1,904,298
Commitments and contingencies
Stockholders' equity:
Common stock	487			484
Treasury stock	(860)			(860)
Additional paid-in capital	1,389,898			1,386,475
Accumulated deficit	(463,019)			(542,799)
Accumulated other comprehensive income	24,530		10,500	28,833
Total stockholders' equity	951,036			872,133
Total liabilities and stockholders' equity	2,905,895			2,776,431
Parent
Current assets:
Cash and cash equivalents	174,530			228,398		192,755	37,389
Accounts receivable	76,622			59,213
Current income tax receivable	26,530			10,027
Deferred taxes	2,947	[1]		5,947	[1]
Inventory	3,723			3,924
Other current assets	3,872			3,626
Total current assets	288,224			311,135
Oil and gas properties, full cost method:
Proved	1,132,623			1,004,808
Less: accumulated DD&A	(403,585)			(370,111)
Net proved oil and gas properties	729,038			634,697
Unevaluated	290,344			254,757
Other property and equipment, net	22,517			22,115
Other assets, net	50,056			41,679
Investment in subsidiary	858,749			736,331
Total assets	2,238,928			2,000,714
Current liabilities:
Accounts payable to vendors	245,554			74,503
Undistributed oil and gas proceeds	24,378			21,841
Accrued interest	18,059			18,546
Other current liabilities	8,945			16,765
Total current liabilities	296,936			131,655
Long-term debt	920,485			914,126
Deferred taxes	38,609	[1]		47,758	[1]
Asset retirement obligations	5,665			5,479
Other long-term liabilities	26,197			29,563
Total liabilities	1,287,892			1,128,581
Commitments and contingencies
Stockholders' equity:
Common stock	487			484
Treasury stock	(860)			(860)
Additional paid-in capital	1,389,898			1,386,475
Accumulated deficit	(463,019)			(542,799)
Accumulated other comprehensive income	24,530			28,833
Total stockholders' equity	951,036			872,133
Total liabilities and stockholders' equity	2,238,928			2,000,714
Guarantor Subsidiary
Current assets:
Cash and cash equivalents	51,202			51,128		30,958	926
Accounts receivable	260,432			108,075
Fair value of hedging contracts	30,053			39,655
Deferred taxes	12,706	[1]		9,567	[1]
Inventory	283			283
Total current assets	354,676			208,708
Oil and gas properties, full cost method:
Proved	6,345,858			6,239,658
Less: accumulated DD&A	(5,267,420)			(5,140,055)
Net proved oil and gas properties	1,078,438			1,099,603
Unevaluated	235,187			193,038
Fair value of hedging contracts	13,221			9,199
Other assets, net	1,584			1,500
Total assets	1,683,106			1,512,048
Current liabilities:
Accounts payable to vendors	19,238			19,858
Undistributed oil and gas proceeds	2,902			1,573
Fair value of hedging contracts	1,880			149
Asset retirement obligations	63,646			66,260
Other current liabilities	760
Total current liabilities	88,426			87,840
Deferred taxes	327,468	[1]		263,072	[1]
Asset retirement obligations	414,752			416,563
Fair value of hedging contracts	436			1,530
Other long-term liabilities	6,712			6,712
Total liabilities	837,794			775,717
Commitments and contingencies
Stockholders' equity:
Additional paid-in capital	1,496,509			1,496,510
Accumulated deficit	(676,250)			(789,012)
Accumulated other comprehensive income	25,053			28,833
Total stockholders' equity	845,312			736,331
Total liabilities and stockholders' equity	1,683,106			1,512,048
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	640					136	136
Total current assets	640
Oil and gas properties, full cost method:
Unevaluated	9,448
Other assets, net	3,426
Investment in subsidiary	12,841
Total assets	26,355
Current liabilities:
Accounts payable to vendors	77
Total current liabilities	77
Total liabilities	77
Commitments and contingencies
Stockholders' equity:
Additional paid-in capital	27,404
Accumulated deficit	(80)
Accumulated other comprehensive income	(1,046)
Total stockholders' equity	26,278
Total liabilities and stockholders' equity	26,355
Eliminations
Current assets:
Accounts receivable	(170,904)
Total current assets	(170,904)
Oil and gas properties, full cost method:
Investment in subsidiary	(871,590)			(736,331)
Total assets	(1,042,494)			(736,331)
Current liabilities:
Accounts payable to vendors	(170,904)
Total current liabilities	(170,904)
Total liabilities	(170,904)
Commitments and contingencies
Stockholders' equity:
Additional paid-in capital	(1,523,913)			(1,496,510)
Accumulated deficit	676,330			789,012
Accumulated other comprehensive income	(24,007)			(28,833)
Total stockholders' equity	(871,590)			(736,331)
Total liabilities and stockholders' equity	$ (1,042,494)			$ (736,331)

[1] Deferred income taxes have been allocated to the Guarantor Subsidiary where related oil and gas properties reside.

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Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 13.8	$ 13.5
Assets, Fair Value, Total	57.1	62.4
Derivative Liabilities, Fair Value		(1.6)
Liabilities, Fair Value, Total	(2.3)	(1.6)
Hedging contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, Fair Value	43.3	48.9
Derivative Liabilities, Fair Value	(2.3)
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	13.8	13.5
Assets, Fair Value, Total	13.8	13.5
Liabilities, Fair Value, Total
Quoted Prices in Active Markets for Identical Assets (Level 1) | Hedging contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, Fair Value
Derivative Liabilities, Fair Value
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Assets, Fair Value, Total	43.3	48.9
Derivative Liabilities, Fair Value		(1.6)
Liabilities, Fair Value, Total	(2.3)	(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	43.3	48.9
Derivative Liabilities, Fair Value	(2.3)
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Assets, Fair Value, Total
Liabilities, Fair Value, Total
Significant Unobservable Inputs (Level 3) | Hedging contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, Fair Value
Derivative Liabilities, Fair Value

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Long-Term Debt - Additional Information (Detail) (USD $)			1 Months Ended	3 Months Ended	6 Months Ended			6 Months Ended			6 Months Ended				3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 28, 2013 Senior Convertible Notes due 2017	Jun. 30, 2013 Senior Convertible Notes due 2017	Jun. 30, 2013 Senior Convertible Notes due 2017	Dec. 31, 2012 Senior Convertible Notes due 2017	Mar. 06, 2012 Senior Convertible Notes due 2017	Jun. 30, 2013 Bank Debt	Dec. 31, 2012 Bank Debt	Apr. 26, 2011 Bank Debt	Jun. 30, 2013 Bank Credit Facility	Aug. 05, 2013 Bank Credit Facility Subsequent Event	Jun. 30, 2013 Letter of Credit	Aug. 05, 2013 Letter of Credit Subsequent Event	Jun. 30, 2013 8.625 % Senior Notes Due 2017	Jun. 30, 2013 8.625 % Senior Notes Due 2017	Jun. 30, 2013 Seven Point Five Percent Senior Notes Due Two Thousand Twenty Two	Jun. 30, 2013 Seven Point Five Percent Senior Notes Due Two Thousand Twenty Two	Jun. 30, 2013 7.5% Senior Notes due 2022	Jun. 30, 2013 7.5% Senior Notes due 2022	Dec. 31, 2012 7.5% Senior Notes due 2022
Debt Instrument [Line Items]
Credit facility initial date								Apr. 26, 2011
Redetermined base borrowing and credit facility										$ 700,000,000
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								400,000,000			378,500,000	378,500,000
Outstanding borrowing under bank credit facility											0	0	21,500,000	21,500,000
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							300,000,000
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	$ 42.65
Closing share price			$ 22.03
Payment for call option					70,800,000
Anti-dilution adjustments for purchases of call option					7,033,470
Strike price per share					$ 55.91
Proceeds from sale of warrants					40,100,000
Carrying amount of liability component				229,200,000	229,200,000
Effective market interest rate					7.51%
Carrying amount of equity component				70,800,000	70,800,000
Transaction costs allocated to liability and equity components					8,900,000
Proceeds from warrant transaction				40,100,000	40,100,000
Liability component of convertible note	920,485,000	914,126,000		245,500,000	245,500,000	239,100,000													300,000,000	300,000,000	300,000,000
Interest cost related to amortization of discount				3,200,000	6,300,000
Amortization of deferred financing cost				300,000	600,000										400,000	800,000	100,000	300,000
Interest expense related to contractual interest coupon of convertible notes				$ 1,300,000	$ 2,600,000										$ 8,100,000	$ 16,200,000			$ 5,600,000	$ 11,200,000

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Changes in Asset Retirement Obligations (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations as of the beginning of the period, including current portion			$ 488,300,000
Liabilities incurred			16,500,000
Liabilities settled			(37,300,000)
Accretion expense	8,318,000	8,255,000	16,581,000	16,521,000
Asset retirement obligations as of the end of the period, including current portion	$ 484,100,000		$ 484,100,000

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

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 June 30, 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 June 30, 2013:

	Fair Value Measurements at June 30, 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	$	13.8		$	13.8	$	—		$	—
Hedging contracts		43.3			—		43.3			—
Total	$	57.1		$	13.8	$	43.3		$	—
	Fair Value Measurements at June 30, 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		($2.3	)	$	—		($2.3	)	$	—
Total		($2.3	)	$	—		($2.3	)	$	—

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 June 30, 2013 and December 31, 2012. As of June 30, 2013 and December 31, 2012, the fair value of our 2017 Notes was approximately $397.5 million and $401.3 million, respectively. As of June 30, 2013 and December 31, 2012, the fair value of the liability component of our 2017 Convertible Notes was approximately $254.7 million and $249.6 million, respectively. As of June 30, 2013 and December 31, 2012, the fair value of our 2022 Notes was approximately $316.5 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 1 inputs. We applied fair value concepts in determining the liability component of our 2017 Convertible Notes (see Note 4 – Long-Term Debt) at inception, June 30, 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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Effect of Derivative Instruments in Statement of Operations (Detail) (Cash Flow Hedging, USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion, Net, Total	$ 30.0		$ 108.1		$ 9.9		$ 72.6
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net, Total	7.3	[1]	9.4	[1]	15.9	[2]	8.4	[2]
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net, Total	1.4		5.4		0.1		4.9
Commodity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion, Net, Total	30.0		108.1		9.9		72.6
Derivative income, net
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net, Total	1.4		5.4		0.1		4.9
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	$ 7.3	[1]	$ 9.4	[1]	$ 15.9	[2]	$ 8.4	[2]

[1] For the three months ended June 30, 2013, effective hedging contracts increased oil revenue by $5.3 million and increased gas revenue by $2.0 million. For the three months ended June 30, 2012, effective hedging contracts increased oil revenue by $2.9 million and increased gas revenue by $6.5 million.

[2] For the six months ended June 30, 2013, effective hedging contracts increased oil revenue by $9.9 million and increased gas revenue by $6.0 million. For the six months ended June 30, 2012, effective hedging contracts decreased oil revenue by $2.9 million and increased gas revenue by $11.3 million.

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Investment in Oil and Gas Properties - Additional Information (Detail) (Canada, USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2013
Canada
Results of Operations for Oil and Gas Producing Activities, by Geographic Area [Line Items]
Initial Investment in Oil and Gas Properties	$ 9.4

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10 – 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 petitions and 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 $30.2 million. The franchise tax years 2010, 2011 and 2012 for Stone remain subject to examination, which potentially exposes us to additional estimated assessments of $3.4 million including accrued interest. We estimate the potential range of loss upon resolution of this matter to be between $0 and $33.6 million.

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Acquisitions

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

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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Interim Financial Statements

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Interim Financial Statements

Note 1 – Interim Financial Statements

The condensed consolidated financial statements of Stone Energy Corporation (“Stone”) and its subsidiaries as of June 30, 2013 and for the three and six-month periods ended June 30, 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 and six-month periods ended June 30, 2013 are not necessarily indicative of future financial results.

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Hedging Positions (Detail)	Jun. 30, 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	92.250
Oil | 2014 Hedging Position Three
Derivative [Line Items]
Daily Volume	1,000
Swap Price	93.550
Oil | 2014 Hedging Position Four
Derivative [Line Items]
Daily Volume	1,000
Swap Price	94.000
Oil | 2014 Hedging Position Five
Derivative [Line Items]
Daily Volume	1,000
Swap Price	98.000
Oil | 2014 Hedging Position Six
Derivative [Line Items]
Daily Volume	1,000
Swap Price	98.300
Oil | 2014 Hedging Position Seven
Derivative [Line Items]
Daily Volume	1,000
Swap Price	99.65
Oil | 2014 Hedging Position Eight
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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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

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 June 30, 2013 and December 31, 2012.

Fair Value of Derivative Instruments at June 30, 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	$	30.1	Current liabilities: Fair value of hedging contracts		($1.9	)
	Long-term assets: Fair value of hedging contracts		13.2	Long-term liabilities: Fair value of hedging contracts		(0.4	)
		$	43.3			($2.3	)
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 tables disclose the effect of derivative instruments in the statement of operations for the three and six-month periods ended June 30, 2013 and 2012.

The Effect of Derivative Instruments on the Statement of Operations for the Three Months Ended June 30, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives				Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013		2012		Location	2013		2012		Location	2013		2012
Commodity contracts	$	30.0	$	108.1	Operating revenue— oil/gas production	$	7.3	$	9.4	Derivative income, net	$	1.4	$	5.4
Total	$	30.0	$	108.1		$	7.3	$	9.4		$	1.4	$	5.4

(a) For the three months ended June 30, 2013, effective hedging contracts increased oil revenue by $5.3 million and increased gas revenue by $2.0 million. For the three months ended June 30, 2012, effective hedging contracts increased oil revenue by $2.9 million and increased gas revenue by $6.5 million.

The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended June 30, 2013 and 2012 (in millions)
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives				Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) (a)					Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion)
	2013		2012		Location	2013		2012		Location	2013		2012
Commodity contracts	$	9.9	$	72.6	Operating revenue— oil/gas production	$	15.9	$	8.4	Derivative income, net	$	0.1	$	4.9
Total	$	9.9	$	72.6		$	15.9	$	8.4		$	0.1	$	4.9

(a) For the six months ended June 30, 2013, effective hedging contracts increased oil revenue by $9.9 million and increased gas revenue by $6.0 million. For the six months ended June 30, 2012, effective hedging contracts decreased oil revenue by $2.9 million and increased gas revenue by $11.3 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 June 30, 2013:

	As Presented Without Netting			Effects of Netting			With Effects of Netting
	(in millions)
Current assets: Fair value of hedging contracts	$	30.1			($1.8	)	$	28.3
Long-term assets: Fair value of hedging contracts		13.2			(0.5	)		12.7
Current liabilities: Fair value of hedging contracts		(1.9	)		1.9			—
Long-term liabilities: Fair value of hedging contracts		(0.4	)		0.4			—

Hedging Positions

The following table illustrates our hedging positions for calendar years 2013, 2014 and 2015 as of August 5, 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			92.25
2014		10,000			4.105		1,000			93.55
2014		10,000			4.190		1,000			94.00
2014		10,000			4.250		1,000			98.00
2014		10,000			4.350		1,000			98.30
2014							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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Investment in Oil and Gas Properties

6 Months Ended

Jun. 30, 2013

Extractive Industries [Abstract]

Investment in Oil and Gas Properties

Note 9 – Investment in Oil and Gas Properties

During the three-month period ended June 30, 2013, we made an initial investment of $9.4 million in oil and gas properties located in Canada. This amount is included in unevaluated oil and gas properties as of June 30, 2013.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

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

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt consisted of the following at:

	June 30, 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		245.5		239.1
7 1/2% Senior Notes due 2022		300.0		300.0
Bank debt		—		—
Total long-term debt	$	920.5	$	914.1

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 05, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
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		50,009,410

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Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2013

Asset Retirement Obligation Disclosure [Abstract]

Changes in Asset Retirement Obligations

The change in our asset retirement obligations during the six months ended June 30, 2013 is set forth below:

	Six Months Ended June  30, 2013
	(in millions)
Asset retirement obligations as of the beginning of the period, including current portion	$	488.3
Liabilities incurred		16.5
Liabilities settled		(37.3	)
Accretion expense		16.6
Asset retirement obligations as of the end of the period, including current portion	$	484.1