Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

(7) FAIR VALUE MEASUREMENTS

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a framework for measuring fair value and a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels:

• Level 1 – Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

• Level 2 – Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured.

• Level 3 – Valuation inputs are unobservable and significant to the fair value measurement.

Valuation of Acquired Gerrity Oil Property – The fair value of the acquired oil and gas properties of $1.8 million is non-recurring and was estimated based on third party valuations using the income approach method, which is based on a discounted forecasted cash flow analysis derived from estimated future production. We consider this valuation to be a Level 3 classification.

The following tables present recurring financial assets which are carried at fair value as of June 30, 2013 and December 31, 2012 (in thousands):

	June 30, 2013
		Level 1		Level 2		Level 3
Investment in Global (1)	$	13,909	$	—	$	—
		December 31, 2012
		Level 1		Level 2		Level 3
Investment in Global (1)	$	23,607	$	—	$	—

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(1) Global’s ordinary shares are publicly traded on the Alternative Investment Market (“AIM”), a market operated by the London Stock Exchange, with quoted prices in active markets. Accordingly, the fair value measurements of these securities have been classified as Level 1.