Property And Equipment

3 Months Ended

Mar. 31, 2015

Property And Equipment [Abstract]

Property And Equipment

Note 6–  Property and Equipment

Property and equipment included the following at the dates indicated below:

		March 31,		December 31,
		2015		2014
Oil and Gas Properties Under the Full Cost Method:
Subject to Amortization	$	916,437	$	989,758
Not Subject to Amortization:
Incurred in 2015		682		-
Incurred in 2014		945		945
Incurred in 2013		774		774
Incurred prior to 2013		9,065		9,065
		927,903		1,000,542
Computers, Furniture and Fixtures		8,733		8,733
Total Property and Equipment		936,636		1,009,275
Accumulated Depreciation, Depletion and Amortization		(592,901)		(539,766)
Net Property and Equipment	$	343,735	$	469,509

As of March 31, 2015 and December 31, 2014, our properties not subject to amortization balance of $11.5 million and $10.8 million relate to unevaluated well costs in the Marcellus.  These costs will be transferred to the amortization base when it is determined whether or not proved reserves can be assigned to such properties.  This analysis is dependent upon well performance, drilling results and development of identified projects and periodic assessment of reserves.  We expect costs excluded from amortization to be transferred to the amortization base over the next year as previously drilled wells in the U.S. are completed and tied into infrastructure.  We have no unevaluated costs in the U.K.

For the three months endedMarch 31, 2015 and 2014, we capitalized none and $2.6million, respectively, in interest related to exploration and development, primarily related to our U.K. activities.For the three months ended March 31, 2015 and 2014, we capitalized $2.4million and $3.1 million, respectively, in certain directly related employee costs.

Oil and Gas Impairments

During the first quarter of 2015, we recorded $90.1 million in impairment of oil and gas properties, pre-tax, through the application of the full cost ceiling test.  The primary reason for the impairment was the precipitous fall in oil and gas pricing which began during the fourth quarter of 2014 and which has not yet recovered.  The pricing used for the U.K. for the first quarter of 2015 was $83.49 per barrel for oil and $7.60 per mcf for gas.  The pricing used for the U.S. for the first quarter of 2015 was $78.58 per barrel for oil and $3.73 per mcf for gas.  Should oil and gas prices remain depressed for the remainder of 2015, further impairments of our oil and gas properties are likely to be recorded throughout 2015.

We did not have an impairment of U.S. oil and gas properties through the application of the full costceiling test for the first quarter of 2014, which utilized prices of $98.43 per barrel for oil and$3.99 per mcf for gas. Additionally, we did not have an impairment of U.K. oil and gas properties through theapplication of the full cost ceiling test for the first quarter of 2014, which utilized prices of$107.06 per barrel for oil and $10.57 per mcf for gas.

Insurance Settlements

We have made an insurance claim to recover certain loss of production and replacement costs related to our insurance claim for the loss of production income resulting from the rupture of the Alba water injection pipeline, and received $13.0 million during the fourth quarter of 2014 and $8.4 million during the first quarter of 2015 as preliminary settlements.  The entirety of the amount received during the first quarter of 2015 relates to loss of production.  The claims remain in progress for potential additional recoveries, which are expected to be in the range of $5 million to $7 million.