Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

 Commitments and Contingencies

Commitments During the third quarter of 2012, we entered into a 36-month drilling services contract with a subsidiary of Atwood Oceanics Inc. Drilling services will be provided by a new-build drillship, the Atwood Advantage, that will arrive at our first drilling location in the fourth quarter of 2013. The rate of $584,000 per day, gross, will begin upon arrival and will be allocated among joint venture partners.

Legal Proceedings  We are involved in various legal proceedings in the ordinary course of business.  These proceedings are subject to the uncertainties inherent in any litigation.  We are defending ourselves vigorously in all such matters and we believe that the ultimate disposition of such proceedings will not have a material adverse effect on our financial position, results of operations or cash flows.

COGCC During 2011, we received two Notices of Alleged Violation (NOAV) from the Colorado Oil and Gas Conservation Commission (COGCC) regarding the reporting of the presence of hydrogen sulfide to the COGCC and local government designee within certain areas of our Piceance Basin and Grover field operations. In August 2012, we entered into an Administrative Order on Consent with COGCC resolving both NOAVs. In lieu of a fine payment, we agreed to institute a third party hydrogen sulfide awareness program with a total budget of up to $50,000 and arrange for the program to be completed by August 2013.