Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying value of goodwill and other intangible assets follows:



	Year-End
	2013		2012
	(In thousands)
Goodwill	$	64,493	$	61,680
Identified intangibles, net	2,153		2,188
	$	66,646	$	63,868

Goodwill represents the excess of the purchase price over the fair value of the tangible and identifiable intangible assets of $60,619,000 associated with our acquisition of Credo in third quarter 2012 and $3,874,000 associated with a water resources company acquired in 2010.

On September 28, 2012, we acquired 100 percent of the outstanding common stock of CREDO Petroleum Corporation (Credo) in an all cash transaction for $14.50 per share, representing an equity purchase price of approximately $146,445,000. In addition, we paid in full $8,770,000 of Credo’s outstanding debt.

The following unaudited pro forma information for the year 2012 and 2011 represents the results of our consolidated operations as if the acquisition of Credo had occurred on January 1, 2011. This information is based on historical results of operations, adjusted for certain estimated accounting adjustments and does not purport to represent our actual results of operations if the transaction would have occurred on January 1, 2011, nor is it necessarily indicative of future results.



	For the Year
	2012		2011
	(In thousands)
Revenues	$	190,634	$	152,340
Net income	21,583		(2,639		)

The final purchase price allocation related to the Credo acquisition based on additional information obtained during the acquisition measurement period, in particular, allocation of the estimated values assigned to oil and gas properties and equipment, goodwill and deferred tax liability, is as follows:



	Purchase Price Allocation
	Year-End
	2012		Adjustments				Final
	(In thousands)
Cash and short-term investments	$	2,300	$	—			$	2,300
Receivables	9,144		1,003			^(a)	10,147
Oil and gas properties and equipment	140,514		(4,712		)	^(b)	135,802
Other properties and equipment	67		—				67
Goodwill and other intangible assets	58,396		2,813			^(c)	61,209
Other	676		—				676
Total assets acquired	211,097		(896		)		210,201

Accounts payable and accrued liabilities	29,927		13			^(d)	29,940
Deferred tax liability	24,700		(909		)	^(e)	23,791
Other liabilities	1,255		—				1,255
Total liabilities assumed	55,882		(896		)		54,986

Estimated fair value of net assets acquired	$	155,215	$	—			$	155,215

_____________________


^(a)	Primarily related to unrecorded seismic and leasehold costs due from partners.


^(b)	Fair value adjustments allocated to near-term expiring leasehold acreage.


^(c)	Goodwill adjustments associated with fair value adjustments for oil and gas properties, net of deferred taxes and working capital adjustments.


^(d)	Primarily related to current income taxes payable.


^(e)	Primarily related to deferred taxes on fair value adjustments of near-term expiring leasehold acreage.

Identified intangibles include $1,681,000 in indefinite lived groundwater leases associated with a water resources company acquired in 2010. In addition, identified intangibles includes $590,000 related to patents with definite lives associated with the Calliope Gas Recovery System acquired as part of our acquisition of Credo and is being amortized over the average remaining useful life of the patents. The net carrying value at year-end 2013 is $472,000.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details