Oil and Gas Property

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Oil and Gas Property

10. Oil and Gas Property

The aggregate amount of capitalized costs related to oil and gas property and the aggregate amount of related accumulated depletion and impairment as of March 31, 2012 and 2011 are as follows:

	2012			2011
Proved property	$	37,112,000		$	35,379,000
Unproved property		4,409,000			3,112,000
Total capitalized oil and gas property		41,521,000			38,491,000
Accumulated depletion and impairment		(25,778,000	)		(24,713,000	)
Net capitalized oil and gas property	$	15,743,000		$	13,778,000

Depletion expense per equivalent barrel of production was $7.27 and $9.24 for the years ended March 31, 2012 and 2011, respectively.

On January 31, 2012, we completed the divestiture and sale of the Company’s working and/or override interests in 38 wells in Weld County, Colorado to an unrelated third party for $5,900,000.  After customary post-closing adjustments and expenses, the net proceeds from the transaction were $5,404,000.  The adjusted purchase price was impacted by commissions, sales costs and post effective date revenue and expense modifications to the purchase price.  Under the full cost method, no gain or loss is recognized upon the sale or abandonment of oil and gas property unless non-recognition of such gain or loss would significantly alter the relationship between capitalized costs and proved oil and gas reserves.

The following shows, by category and year incurred, the oil and gas property costs applicable to unproved property that were excluded from the full cost pool depletion computation as of March 31, 2012:

Costs Incurred During	Exploration		Development		Acquisition		Total Unproved
Year Ended	Costs		Costs		Costs		Property
March 31, 2012	$	—	$	2,371,000	$	760,000	$	3,131,000
March 31, 2011		—		—		611,000		611,000
Prior Years		—		—		667,000		667,000
Total	$	—	$	2,371,000	$	2,038,000	$	4,409,000

Costs incurred in oil and gas property development, exploration and acquisition activities during the years ended March 31, 2012 and 2011 are summarized as follows:

	2012		2011
Development costs	$	7,624,000	$	1,454,000
Exploration costs		—		—
Acquisitions:
Proved		335,000		519,000
Unproved		798,000		756,000
Total costs of development, exploration and acquisition activities	$	8,757,000	$	2,729,000