Organization and Business

3 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business

Business

We are a Houston-based, independent natural gas and oil company. Our core business is to explore, develop, produce and acquire natural gas and oil properties onshore and offshore in the Gulf of Mexico in water-depths of less than 300 feet, using cash generated from our existing property base. We have an inventory of six offshore prospects and no debt.

In July 2012, we drilled two exploration wells (Ship Shoal 134 and South Timbalier 75) and no commercial hydrocarbons were found. For the three months ended September 30, 2012, we recorded exploration expenses of approximately $43.7 million, including leasehold costs, related to these two wells, with additional costs incurred in October and November 2012.

As of September 30, 2012, we had invested approximately $12.3 million with Alta Energy Canada Partnership, G.P. ("Alta Energy") for a 5% ownership interest in the Kaybob Duvernay shale play. We had also invested approximately $33.8 million with Exaro Energy III LLC ("Exaro") in the Jonah field in Wyoming, which is primarily development of proved reserves. In addition, as of September 30, 2012, the Company had invested approximately $8.8 million in leasehold costs in the Tuscaloosa Marine Shale ("TMS") for approximately 24,000 acres.