SUPPLEMENTAL FINANCIAL INFORMATION ON OIL AND NATURAL GAS EXPLORATION, DEVELOPMENT AND PRODUCTION ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2013

SUPPLEMENTAL FINANCIAL INFORMATION ON OIL AND NATURAL GAS EXPLORATION, DEVELOPMENT AND PRODUCTION ACTIVITIES [Abstract]

Net Costs Incurred in Purchase of Proved and Unproved Properties, and in Exploration and Development Activities

The following table presents information regarding USE’s net costs incurred in the purchase of proved and unproved properties, and in exploration and development activities:

	(In thousands)
	December 31,		December 31,
	2013		2012
Unproved oil and gas properties	$	7,478	$	9,169
Proved oil and gas properties		136,521		119,919
	$	143,999	$	129,088

Undeveloped Properties

Undeveloped properties as of December 31, 2013 include costs incurred in the following years:

	(In thousands)
	Acquisitions		Exploration		Development		Total
2010	$	134	$	--	$	--	$	134
2011		5,006		--		--		5,006
2012		271		--		--		271
2013		2,067		--		--		2,067
Total	$	7,478	$	--	$	--	$	7,478

Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development

Costs incurred in oil and natural gas property acquisition, exploration and development activities are summarized below:

	(In thousands)
	Year Ended December 31,
	2013		2012		2011
Property acquisition costs:
Proved	$	445	$	2,987	$	1,288
Unproved		1,760		1,416		10,679
Exploration costs		9,138		10,943		32,788
Development costs		9,403		20,134		4,550
Total costs incurred	$	20,746	$	35,480	$	49,305

Summary of Results of Operations

Results of operations from oil and natural gas producing activities are presented below:

	(In thousands)
	For the years ending December 31,
	2013		2012		2011
Oil and gas revenues	$	33,647	$	32,534	$	30,958
Operating expenses		10,469		10,788		11,552
Depreciation, depletion and amortization		13,623		14,893		13,997
Impairment		5,828		5,189		--
		29,920		30,870		25,549
Operating income	$	3,727	$	1,664	$	5,409

Estimated Quantities of Proved Oil and Natural Gas Reserves and Changes in Net Proved Reserves

USE’s net ownership interests in estimated quantities of proved oil and natural gas reserves and changes in net proved reserves, all of which are located in the continental United States, are summarized below:

December 31, 2013	Oil (BBLS)	Natural Gas or NGL (MCFE)
Beginning of year	2,613,643	1,798,088
Revisions of previous quantity estimates	(162,957)	382,690
Extensions, discoveries and improved recoveries	1,352,746	678,412
Purchase of reserves in place	--	--
Sales of reserves in place	--	--
Production	(343,719)	(487,282)
End of year	3,459,713	2,371,908
Proved developed reserves at end of year	1,875,528	1,701,282
December 31, 2012	Oil (BBLS)	Natural Gas or NGL (MCFE)
Beginning of year	2,737,969	2,744,128
Revisions of previous quantity estimates	(145,596)	(481,583)
Extensions, discoveries and improved recoveries	763,125	369,169
Purchase of reserves in place	75,948	30,457
Sales of reserves in place	(444,272)	(437,057)
Production	(373,531)	(427,026)
End of year	2,613,643	1,798,088
Proved developed reserves at end of year	1,770,659	1,420,295

Summary of Standardized Measure

The standardized measure of discounted future net cash flows relating to USE’s ownership interests in proved oil and natural gas reserves as of year-end is shown below:

	(In thousands)
	December 31,
	2013			2012			2011
Future cash inflows	$	330,245		$	237,148		$	259,533
Future costs:
Production		(129,392	)		(96,616	)		(77,813	)
Development		(37,739	)		(21,461	)		(42,972	)
Future income tax expense		(14,500	)		(8,483	)		(19,790	)
Future net cash flows		148,614			110,588			118,958
10% discount factor		(43,761	)		(39,571	)		(56,767	)
Standardized measure of discounted future net cash flows	$	104,853		$	71,017		$	62,191

Changes in Standardized Measure

Changes in standardized measure of future net cash flows relating to proved oil and natural gas reserves are summarized below:

	(In thousands)
	For the years ended December 31,
	2013			2012			2011
Balance at beginning of year	$	71,017		$	62,191		$	44,653
Sales of oil and gas, net of production costs		(23,179	)		(21,747	)		(19,406	)
Net change in prices and production costs		2,543			(4,548	)		1,401
Net change in future development costs		--			--			--
Extensions and discoveries		54,360			23,297			26,574
Purchase of reserves in place		--			2,573			3,082
Sale of reserves in place		--			(13,573	)		(1,947	)
Revisions of previous quantity estimates		(2,961	)		(5,927	)		(3,158	)
Development costs incurred during year		8,344			22,808			14,930
Previously estimated development costs incurred		(6,414	)		(9,706	)		(2,719	)
Net change in income taxes		(4,245	)		7,261			(4,270	)
Accretion of discount		7,647			7,254			5,207
Changes in production rates, timing and other		(2,259	)		1,134			(2,156	)
Balance at end of year	$	104,853		$	71,017		$	62,191