Long-Term Debt

3 Months Ended

Mar. 31, 2012

Long-term Debt, Unclassified [Abstract]

LONG-TERM DEBT

The table below presents the carrying amounts and approximate fair values of our debt obligations. The approximate fair values of our convertible and other debt securities are determined based on market quotes from independent third party brokers as they are actively traded in an established market.



	March 31, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
			(in thousands)
5.00% Convertible Senior Notes due February 2013	$	58,125	$	43,342	$	70,757	$	46,560
4.50% Convertible Senior Notes due May 2015	78,037		41,400		77,457		41,400
11.375% Senior Notes due February 2019	1,913		1,290		1,912		1,300
Senior Secured Notes due December 2017	275,752		240,954		275,411		283,475
Joint venture financing⁽¹⁾	1,282		1,282		1,294		1,294
Total	$	415,109	$	328,268	$	426,831	$	374,029

__________________


(1)	Non-recourse, no interest rate

5.00% Convertible Senior Notes

As of March 31, 2012 and December 31, 2011, the net carrying amount of our 5.00% Convertible Senior Notes (the "5.00% Convertible Notes") was as follows (amounts in thousands):



	March 31, 2012			December 31, 2011
Principal amount	$	59,372		$	72,750
Less: Unamortized debt discount	(1,247		)	(1,993		)
Carrying amount	$	58,125		$	70,757

The 5.00% Convertible Notes bear interest at a rate of 5.00% per year, payable semi-annually in arrears on February 1 and August 1 of each year, beginning August 1, 2008. As a result of the amortization of the debt discount through non-cash interest expense, the effective interest rate on the 5.00% Convertible Notes is 5.36% per annum. The amount of the cash interest expense recognized with respect to the 5.00% contractual interest coupon for the three months ended March 31, 2012 was $0.9 million and $1.4 million for the three months ended March 31, 2011. The amount of non-cash interest expense related to the amortization of the debt discount and amortization of the transaction costs for the three months ended March 31, 2012 was $0.6 million and $0.8 million for the three months ended March 31, 2011.

As of March 31, 2012, the unamortized discount is expected to be amortized into earnings over 0.8 years. The carrying value of the equity component of the 5.00% Convertible Notes was $3.9 million as of March 31, 2012. As of December 31, 2011 and March 31, 2012, unamortized debt issue costs were approximately $0.6 million and $0.4 million, respectively, with all costs included in other assets.

As of March 31, 2012, the balance of the 5.00% Convertible Notes was classified as a current liability due to the maturity date of February 1, 2013. During March 2012, we entered into three separate exchange agreements with various holders of our 5.00% Convertible Notes. Pursuant to these agreements, as consideration for the surrender by the holders of $13,378,000 aggregate principal amount of the 5.00% Convertible Notes, we issued to the holders an aggregate of 6,187,005 shares of our common stock. As a result, the Company has recorded a net gain of approximately $2.8 million, including a loss of approximately $9.5 million for the early conversion offer and a gain of approximately $12.3 million for the derecognition of such 5.00% Convertible Notes. See Note I, "Subsequent Events," for an additional exchange. We continue to evaluate additional opportunities to exchange our equity securities for our 5.00% Convertible Notes and other refinancing and repayment options allowed under the Senior Secured Notes and expect to address the 2013 maturity of these notes during 2012.

4.50% Convertible Senior Notes

As of March 31, 2012 and December 31, 2011, the net carrying amount of our 4.50% Convertible Senior Notes due 2015 (the "4.50% Convertible Notes") was as follows (amounts in thousands):



	March 31, 2012			December 31, 2011
Principal amount	$	86,250		$	86,250
Less: Unamortized debt discount	(8,213		)	(8,793		)
Carrying amount	$	78,037		$	77,457

The 4.50% Convertible Notes bear interest at a rate of 4.50% per year, payable semiannually in arrears on November 1 and May 1 of each year, beginning May 1, 2010. As a result of the amortization of the debt discount through non-cash interest expense, the effective interest rate on the 4.50% Convertible Notes is 9.09% per annum. The amount of the cash interest expense recognized with respect to the 4.50% contractual interest coupon for the three months ended March 31, 2012 was $1.0 million and $1.0 million for the three months ended March 31, 2011. The amount of non-cash interest expense related to the amortization of the debt discount and transaction costs for the three months ended March 31, 2012 was $0.7 million and $0.7 million for the three months ended March 31, 2011. As of March 31, 2012, the unamortized discount is expected to be amortized into earnings over 3.1 years. The carrying value of the equity component of the 4.50% Convertible Notes was $8.4 million as of March 31, 2012.

11.375% Senior Notes

On February 9, 2011, the Company successfully completed the issuance and sale of $200 million aggregate principal amount of 11.375% Senior Notes due 2019 (the “11.375% Senior Notes”). The 11.375% Senior Notes are jointly and severally, and unconditionally, guaranteed (the “guarantees”) on a senior unsecured basis initially by two of our wholly-owned subsidiaries, and all of our future subsidiaries other than immaterial subsidiaries (such guarantors, the “Guarantors”). The 11.375% senior notes and the guarantees were issued pursuant to an indenture dated as of February 9, 2011 (the “Indenture”), by and among the Company, the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”).

In December 2011, the Company entered into an exchange transaction related to the new Senior Secured Notes mentioned below. Approximately $198 million of the 11.375% Senior Notes were exchanged to new Senior Secured Notes. As of March 31, 2012 and December 31, 2011, the net carrying amount of the 11.375% Senior Notes was as follows (amounts in thousands):



	March 31, 2012			December 31, 2011
Principal amount	$	1,970		$	1,970
Less: Unamortized debt discount	(57		)	(58		)
Carrying amount	$	1,913		$	1,912

The 11.375% senior notes bear interest at a rate of 11.375% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning August 15, 2011. As a result of the amortization of the debt discount through non-cash interest expense, the effective interest rate on the 11.375% senior notes is 12.00% per annum. The amount of the cash interest expense recognized with respect to the 11.375% contractual interest coupon for the three months ended March 31, 2012 was $0.1 million and $3.3 million for the three months ended March 31, 2011. The amount of non-cash interest expense for the three months ended March 31, 2012 and 2011 related to the amortization of the debt discount and transaction costs was $3.8 thousand and $0.2 million, respectively. As of March 31, 2012, the unamortized discount is expected to be amortized into earnings over 6.9 years.

Material covenants were removed as part of the exchange offer and issuance of the Senior Secured Notes during December 2011.

Senior Secured Notes

On December 19, 2011, the Company executed an indenture (the “Senior Secured Notes Indenture”), among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee. The Company issued $283,475,000 aggregate principal amount of Senior Secured Notes due 2017 (the “Senior Secured Notes”) pursuant to the Senior Secured Notes Indenture. The Senior Secured Notes are fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries (the “Guarantors”). All of the Company’s existing subsidiaries other than Endeavor Gathering, LLC are domestic restricted subsidiaries and Guarantors. As of March 31, 2012 and December 31, 2011, the net carrying amount of the Senior Secured Notes was as follows (amounts in thousands):



	March 31, 2012			December 31, 2011
Principal amount	$	283,475		$	283,475
Less: Unamortized debt discount	(7,723		)	(8,064		)
Carrying amount	$	275,752		$	275,411

The Senior Secured Notes bear interest at a rate of 11.00% per year, payable semiannually on June 1 and December 1 of each year, beginning June 1, 2012. The Indenture for the Senior Secured Notes provide the Company with a PIK option that allows for a 9% cash interest payment along with additional Senior Secured Notes of 4% resulting in an annual interest rate of 13%. As a result of the amortization of the debt discount through non-cash interest expense, the effective interest rate on the Senior Secured Notes is 11.68% per annum if the cash only option is elected. If the PIK option is elected, the effective interest rate on the Senior Secured Notes is 13.52% per annum. The amount of non-cash interest expense for the three months ended March 31, 2012 related to the amortization of the debt discount and transaction costs was $0.6 million. As of March 31, 2012, the unamortized discount is expected to be amortized into earnings over 5.7 years.