2.2.0.7falseRelated parties0213 - Disclosure - Related partiestruefalsefalsefalse1USDfalsefalseUSDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0$20us-gaap_RelatedPartyTransactionDueFromToRelatedPartyAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsetruefalsefalsefalsefalsefalsefalse1falsefalsefalsefalse00falsefalsefalsexbrli:stringItemTypestringNo definition available.false31us-gaap_RelatedPartyTransactionsDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabelfalse1falsefalsefalsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 13 - us-gaap:RelatedPartyTransactionsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note M. </b><b><i>Related parties</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following tables summarize charges incurred with and payments made to the Company’s
related parties and reported in the consolidated statements of operations, as well as outstanding
payables and receivables included in the consolidated balance sheets for the periods presented:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(in thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Charges incurred with Chase Oil and affiliates </i></b><sup style="font-size: 85%; vertical-align: text-top"><b><i>(a)</i></b></sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">422</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6,541</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">15,507</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">13,269</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Working interests owned by employees: </i></b><sup style="font-size: 85%; vertical-align: text-top"><b><i>(b)</i></b></sup>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Revenues distributed to employees
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">93</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">171</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">62</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Joint interest payments received from employees
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">345</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">245</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">575</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">884</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Overriding royalty interests paid to Chase Oil affiliates </i></b><sup style="font-size: 85%; vertical-align: text-top"><b><i>(c)</i></b></sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">517</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">258</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,046</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">499</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Royalty interests paid to a director of the Company </i></b><sup style="font-size: 85%; vertical-align: text-top"><b><i>(d)</i></b></sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">38</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">30</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">79</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">56</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Amounts paid under consulting agreement with Steven L. Beal </i></b><sup style="font-size: 85%; vertical-align: text-top"><b><i>(e)</i></b></sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">67</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">130</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>December 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>(in thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td align="right" colspan="3" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Amounts included in accounts receivable — related parties:</i></b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Chase Oil and affiliates <sup style="font-size: 85%; vertical-align: text-top">(a)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">197</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">87</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Working interests owned by employees <sup style="font-size: 85%; vertical-align: text-top">(b)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">129</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Amounts included in accounts payable — related parties:</i></b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Chase Oil and affiliates <sup style="font-size: 85%; vertical-align: text-top">(a)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">512</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Working interests owned by employees <sup style="font-size: 85%; vertical-align: text-top">(b)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">15</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Overriding royalty interests of Chase Oil affiliates <sup style="font-size: 85%; vertical-align: text-top">(c)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">319</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">255</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Royalty interests of a director of the Company <sup style="font-size: 85%; vertical-align: text-top">(d)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">12</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>The Company incurred charges for services rendered in the ordinary course of business from
Chase Oil Corporation (“Chase Oil”), a stockholder of the Company, and its affiliates
including a drilling contractor, an oilfield services company, a supply company, a drilling
fluids supply company, a pipe and tubing supplier, a fixed base operator of aircraft services
and a software company. The tables above summarize the charges incurred as well as outstanding
payables and receivables.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>The Company purchased oil and natural gas properties from third parties in which employees of
the Company owned a working interest. The tables above summarize the Company’s activities with
these employees.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(c)</td>
<td> </td>
<td>Certain persons affiliated with Chase Oil own overriding royalty interests in certain of the
Company’s properties. The tables above summarize the amounts paid attributable to such
interests and amounts due at period end.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(d)</td>
<td> </td>
<td>Royalties are paid on certain properties, located in Andrews County, Texas, to a partnership
of which one of the Company’s directors is the General Partner and owns a 3.5 percent
partnership interest. The tables above summarize the amounts paid attributable to such
interest and amounts due at period end.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(e)</td>
<td> </td>
<td>On June 30, 2009, Steven L. Beal, the Company’s then President and Chief Operating Officer,
retired from such positions. On June 9, 2009, the Company entered into a consulting agreement
(the “Consulting Agreement”) with Mr. Beal, under which Mr. Beal began serving as a consultant
to the Company on July 1, 2009. Either the Company or Mr. Beal may terminate the consulting
relationship at any time by giving ninety days written notice to the other party; however, the
Company may terminate the relationship immediately for cause. During the term of the
consulting relationship, Mr. Beal will receive a consulting fee of $20,000 per month and a
monthly reimbursement for his medical and dental coverage costs. If Mr. Beal dies during the
term of the Consulting Agreement, his estate will receive a $60,000 lump sum payment. As part
of the consulting agreement, certain of Mr. Beal’s stock-based awards were modified to permit
vesting and exercise under the original terms of the stock-based awards as if Mr. Beal were
still an employee of the Company while he is performing consulting services for the Company.
The tables above summarize the Company’s activities pursuant to the consulting agreement with
this director.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b><i>Saltwater disposal services agreement. </i></b>Among the assets the Company acquired from Chase Oil is
an undivided interest in a saltwater gathering and disposal system, which is owned and maintained
under a written agreement among the Company and Chase Oil and certain of its affiliates, and under
which the Company as operator gathers and disposes of produced water. The system is owned jointly
by the Company and Chase Oil and its affiliates in undivided ownership percentages, which are
annually redetermined as of January 1 on the basis of each party’s percentage contribution of the
total volume of produced water disposed of through the system during the prior calendar year. As of
January 1, 2010, the Company owned 97.5 percent of the system and Chase Oil and its affiliates
owned 2.5 percent.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b><i>Purchase of residence. </i></b>During the second quarter of 2010, the Company purchased the Houston,
Texas residence of Darin G. Holderness, the Company’s Vice President, Chief Financial Officer and
Treasurer. To effectuate the purchase, the Company
engaged a third-party relocation company, who executed the purchase
for $920,000 and will subsequently sell Mr.
Holderness’ residence. The third-party relocation company appraised the fair value of Mr.
Holderness’ residence at $920,000.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Notefalsefalsefalseus-types:textBlockItemTypetextblockThis element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph b
-Article 3A
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Article 4
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
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