Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

Subsequent Events

15. Subsequent Events

On February 17, 2012, in accordance with the terms of a farmout agreement, the Company gave notice to the other party to the farmout agreement that the Company would not enter into and assume its share of the work obligations of the second exploration period of Block BM-CAL-10. As a result, the farmout agreement has terminated and the Company will not receive any interest in the block. Pursuant to the farmout agreement, the company is obligated to make payment for a certain percentage of the costs relating to Block BM-CAL-10, which relate primarily to the well that was drilled during the term of the farmout agreement. The notice of withdrawal is a trigger for payment of amounts that would otherwise have been due if the farm-out agreement had closed and we had acquired a participating interest. The Company expects to make that payment in the approximate amount of $26 million in March 2012.