Concentration of Risk

12 Months Ended

Dec. 31, 2011

Note 19. Concentration of Risk

Concentration of Market Risk The largest single non-affiliated purchasers of our production were as follows:

	Percentage of Crude Oil Sales			Percentage of Total Oil, Gas & NGL Sales
Year Ended December 31, 2011
Glencore Energy UK Ltd		24	%		16	%
Shell Trading (US) Company		17	%		12	%
Year Ended December 31, 2010
Glencore Energy UK Ltd		17	%		11	%
Year Ended December 31, 2009
Suncor Energy Marketing		25	%		16	%

We believe the loss of any one purchaser would not have a material effect on our financial position or results of operations since there are numerous potential purchasers of our production.

Concentration of Credit Risk Certain of our financial instruments, including cash equivalents, trade and joint interest receivables and derivative instruments, may expose us to credit risk. A significant portion of our cash is located in our foreign subsidiaries. The cash is denominated in US dollars and invested in highly liquid money market funds and short term deposits with original maturities of three months or less at the time of purchase. Although our cash and cash equivalents are deposited with major international banks and financial institutions, concentrations of cash in certain foreign locations may increase credit risk. We monitor the creditworthiness of the banks and financial institutions with which we invest and review the securities underlying our investment accounts. We believe that losses from nonperformance are unlikely to occur; however, we are not able to predict sudden changes in creditworthiness.

Our accounts receivable result from sales of crude oil, natural gas and NGL production, and joint interest billings to our partners for their share of expenses on joint venture projects for which we are the operator. Joint venture projects, such as Alen, offshore Equatorial Guinea, Tamar, and Leviathan, offshore Israel can be very capital cost intensive. Thus the receivables from our joint venture partners can become significant.

Our accounts receivable reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less. We continually monitor the creditworthiness of the counterparties, some of which are not as creditworthy as we are and may experience liquidity problems. We have obtained credit enhancements from some parties in the way of parental guarantees or letters of credit, including our largest crude oil purchaser. However, we do not have all of our trade credit protected through guarantees or credit support. Nonperformance by a trade creditor could result in losses. See Note 5. Allowance for Doubtful Accounts.