Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Components of prepayments and other

The components of prepayments and other are as follows (in thousands):

	December 31,
	2012		2011
Cash collateral deposits for commodity purchases	$	5,000	$	6,521
Insurance premiums		1,872		2,033
Commodity imbalances and futures		353		1,452
Rents, license and other		867		645
	$	8,092	$	10,651

Fair value measurements for producing oil and gas properties that were subject to fair value impairment

Fair value measurements for producing oil and gas properties that were subject to fair value impairment for the years ended December 31, 2012 and 2011 summarized as follows (in thousands):

	Producing Properties Subject to Fair Value Impairment
	2012			2011
Net book value at January 1	$	11,073		$	8,704
Property additions		13,083			16,465
Depletion taken		(6,371	)		(6,633	)
Impairment valuation loss		(4,699	)		(7,105	)
Net book at December 31	$	13,086		$	11,431

Capitalized costs for non-producing oil and gas leasehold interests

On a quarterly basis, management evaluates the carrying value of non-producing oil and gas leasehold properties and may deem them impaired based on remaining lease term, area drilling activity and the Company's plans for the property.  This fair value measure depends highly on management's assessment of the likelihood of continued exploration efforts in a given area and, as such, data inputs are categorized as ‟unobservable or Level 3" inputs.  Importantly, this fair value measure only applies to the write-down of capitalized costs and will never result in an increase to reported earnings.  Accordingly, impairment provisions on non-producing properties totaling $856,000, $7,644,000 and $1,277,000 were recorded for the years ending December 31, 2012, 2011 and 2010, respectively.  Capitalized costs for non-producing oil and gas leasehold interests currently represent approximately four percent of total oil and gas property costs and are categorized as follows (in thousands):

	December 31,		December 31,
	2012		2011
South Texas Project acreage	$	3,263	$	2,212
West Texas Project		180		288
Napoleonville, Louisiana acreage		323		320
Other acreage areas		329		475
Total Non-producing Leasehold Costs	$	4,095	$	3,295

Capitalized cost activity on the other acreage areas

The South Texas, West Texas and Napoleonville acreage areas have active or scheduled drilling operations underway and holding the underlying acreage is essential to the ongoing exploration effort.  The ‟Other Acreage Areas" category consists of smaller onshore interests dispersed over a wide geographical area.  Since the Company is generally not the operator of its oil and gas property interests, it does not maintain underlying detail acreage data and is dependent on the operator when determining which specific acreage will ultimately be drilled.  The capitalized cost detail on a property-by-property basis is reviewed by management and deemed impaired, if development is not anticipated prior to lease expiration.  Onshore leasehold periods are normally three years and may contain renewal options.  Capitalized cost activity on the ‟Other Acreage Areas" was as follows (in thousands):

	Leasehold
	Costs
Balance December 31, 2011	$	475
Property additions		810
Property sale		(100	)
Impairments		(856	)
Balance December 31, 2012	$	329

Components of cash deposits and other assets

The Company has established certain deposits to support participation in its liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits.  Insurance collateral deposits are invested at the discretion of the Company's insurance carrier and such investments primarily consist of intermediate term federal government bonds and bonds backed by federal agencies.  Components of cash deposits and other assets are as follows (in thousands):

	December 31,
	2012		2011
Insurance collateral deposits	$	3,413	$	3,331
State collateral deposits		170		168
Materials and supplies		616		668
	$	4,199	$	4,167

Derivatives reflected in the Consolidated Balance Sheet

None of the Company's derivative instruments have been designated as hedging instruments and the estimated fair value of forward month commodity contracts (derivatives) is reflected in the accompanying Consolidated Balance Sheet as of December 31, 2012 as follows (in thousands):

	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset Derivatives
- Fair Value Commodity
Contracts at Gross Valuation	$	688		$	-	$	-		$	-
Liability Derivatives
- Fair Value Commodity
Contracts at Gross Valuation		-			-		682			-
Less Counterparty Offsets		(270	)		-		(270	)		-
As Reported Fair Value Contracts	$	418		$	-	$	412		$	-

Forward month commodity contracts (derivatives) are reflected in the accompanying Consolidated Balance Sheet as of December 31, 2011 as follows (in thousands):

	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset Derivatives
- Fair Value Commodity
Contracts at Gross Valuation	$	3,500		$	-	$	-		$	-
Liability Derivatives
- Fair Value Commodity
Contracts at Gross Valuation		-			-		2,117			-
Less Counterparty Offsets		(1,436	)		-		(1,436	)		-
As Reported Fair Value Contracts	$	2,064		$	-	$	681		$	-

Derivatives reflected in the Consolidated Statement of Operations

Forward month commodity contracts (derivatives) are reflected in the accompanying Consolidated Statement of Operations for the years ended December 31, 2012, 2011 and 2010 as follows (in thousands):

	Gain (Loss)
Location	2012			2011		2010
Revenues – marketing	$	(1,377	)	$	97	$	1,036

Fair value assets and liabilities

As of December 31, 2012, the Company's fair value assets and liabilities are summarized and categorized as follows (in thousands):

	Market Data Inputs
	Gross Level 1		Gross Level 2			Gross Level 3		Counterparty
	Quoted Prices		Observable			Unobservable		Offsets			Total
Derivatives
- Current assets	$	299	$	389		$	-	$	(270	)	$	418
- Current liabilities		-		(682	)		-		270			(412	)
Net Value	$	299	$	(293	)	$	-	$	-		$	6

As of December 31, 2011, the Company's fair value assets and liabilities are summarized and categorized as follows (in thousands):

	Market Data Inputs
	Gross Level 1			Gross Level 2			Gross Level 3		Counterparty
	Quoted Prices			Observable			Unobservable		Offsets			Total
Derivatives
- Current assets	$	1,455		$	2,045		$	-	$	(1,436	)	$	2,064
- Current liabilities		(675	)		(1,442	)		-		1,436			(681	)
Net Value	$	780		$	603		$	-	$	-		$	1,383

Factors impacting the change in the net value of the Company's fair value contracts

The following table illustrates the factors impacting the change in the net value of the Company's fair value contracts for the year ended December 31, 2012 (in thousands):

	Level 1			Level 2
	Quoted Prices			Observable			Total
Net Fair Value January 1,	$	780		$	603		$	1,383
- Net realized (gains) losses		(780	)		(603	)		(1,383	)
- Net unrealized gains (losses)		299			(293	)		6
Net Fair Value December 31,	$	299		$	(293	)	$	6

The following table illustrates the factors impacting the change in the net value of the Company's fair value contracts for the year ended December 31, 2011 (in thousands):

	Level 1			Level 2
	Quoted Prices			Observable			Total
Net Fair Value January 1,	$	(118	)	$	1,404		$	1,286
- Net realized (gains) losses		118			(1,404	)		(1,286	)
- Net unrealized gains (losses)		780			603			1,383
Net Fair Value December 31,	$	780		$	603		$	1,383

Company's asset retirement obligations

The Company records a liability for the estimated retirement costs associated with certain tangible long-lived assets.  The estimated fair value of asset retirement obligations are recorded in the period in which they are incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life or the units of production associated with the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized.  A summary of the Company's asset retirement obligations is presented as follows (in thousands):

	2012			2011
Balance on January 1,	$	1,568		$	1,390
-Liabilities incurred		358			164
-Accretion of discount		63			82
-Liabilities settled		(103	)		(68	)
-Revisions to estimates		-			-
Balance on December 31,	$	1,886		$	1,568