DIVESTITURES AND DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2011

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS

Selected financial information. The tables below set forth selected financial information related to net assets divested, net assets related to discontinued operations and operating results related to discontinued operations. Net assets held for sale represents the assets that were or are expected to be sold net of liabilities that were or are expected to be assumed by the purchaser. Net assets related to discontinued operations presents those assets that were or are expected to be sold less liabilities that were or are expected to be assumed by the purchaser, as well as all other related assets and liabilities, consisting of accounts receivable and production tax liability, which were not sold. While the reclassification of revenues and expenses related to discontinued operations for prior periods had no impact upon previously reported net earnings, the statement of operations table presents the revenues and expenses that were reclassified from the specified statement of operations line items to discontinued operations.

The following table presents balance sheet data related to assets held for sale.

	As of December 31,
	2011						2010
Balance Sheet	Net Assets Held for Sale			Net Assets Related to Discontinued Operations			Net Assets Held for Sale			Net Assets Related to Discontinued Operations
	(in thousands)
Assets
Current assets
Accounts receivable, net	$	—		$	3,198		$	—		$	1,971
Oil inventory	—			89			—			59
Total current assets	—			3,287			—			2,030
Properties and equipment	168,218			168,218			129,093			129,093
Accumulated DD&A	(19,969		)	(19,969		)	(12,534		)	(12,534		)
Total assets	148,249			151,536			116,559			118,589
Liabilities
Current liabilities
Accounts payable	—			1,907			—			1,630
Production tax liability	—			262			—			120
Total current liabilities	—			2,169			—			1,750
Asset retirement obligation	2,022			2,022			2,644			2,644
Total liabilities	$	2,022		$	4,191		$	2,644		$	4,394
Net assets	$	146,227		$	147,345		$	113,915		$	114,195

The following table presents statement of operations data related to our discontinued operations.

	Year Ended December 31,
Statements of Operations - Discontinued Operations	2011			2010			2009
	(in thousands)
Revenues
Natural gas, NGL and crude oil sales	$	27,552		$	11,130		$	7,851
Sales from natural gas marketing	—			3,328			5,040
Natural gas and crude oil well drilling	—			—			193
Well operations, pipeline income and other	128			560			951
Total revenues	27,680			15,018			14,035
Costs, expenses and other
Production costs	8,529			4,303			2,643
Cost of natural gas marketing	—			3,265			4,916
Exploration expense	36			135			613
Impairment of natural gas and crude oil properties	—			4,666			3,171
Gain on sale of properties and equipment	(3,854		)	—			—
Depreciation, depletion and amortization	6,247			2,967			4,249
Total costs, expenses and other	10,958			15,336			15,592
Income (loss) from discontinued operations	16,722			(318		)	(1,557		)
Provision (benefit) for income taxes	6,363			(214		)	(582		)
Income (loss) from discontinued operations, net of tax	$	10,359		$	(104	)	$	(975	)

Permian Basin. In October 2011, we developed a plan to divest our Permian Basin asset group. The plan includes 100% of our Permian Basin assets, consisting of producing wells and undeveloped leaseholds. During the fourth quarter of 2011, we completed the sale of our non-core Permian assets to unrelated third parties for a total of $13.2 million. On December 20, 2011, we executed a purchase and sale agreement with COG Operating LLC (“COG”), a wholly owned subsidiary of Concho Resources Inc., an unrelated third party, for the sale of our core Permian Basin assets for a sale price of $173.9 million, subject to customary terms and adjustments, including adjustments based on title and environmental due diligence to be conducted by COG. The effective date of the closing is November 1, 2011. Accordingly, the Permian assets were reclassified as held for sale as of December 31, 2011 and 2010, and the results of operations related to those assets have been reported as discontinued operations in the consolidated statements of operations in 2010, year of acquisition, and 2011. On February 28, 2012, the divestiture closed with total proceeds received of $184.4 million after preliminary closing adjustments. See Note 18.

North Dakota.During the fourth quarter of 2010, we developed a plan to divest our North Dakota assets. The plan included 100% of our North Dakota assets, consisting of producing wells, undeveloped leaseholds and related facilities primarily located in Burke County. The plan received approval from our Board of Directors (the "Board") and, in December 2010, we effected a letter of intent with an unrelated third party. Following the sale to the unrelated party, we do not have significant continuing involvement in the operations of or cash flows from these assets; accordingly, the North Dakota assets were reclassified as held for sale as of December 31, 2010, and the results of operations related to those assets have been reported as discontinued operations in the consolidated statement of operations in all periods presented. In February 2011, we executed a purchase and sale agreement and subsequently closed with the same unrelated party. Proceeds from the sale were $9.5 million, net of non-affiliated investor partners' share of $3.8 million, resulting in a pretax gain on sale of $3.9 million.

Michigan.During the third quarter of 2010, we divested our Michigan asset group and related liabilities for net cash proceeds of $22 million and realized a loss on sale of $4.7 million in the form of an impairment charge recorded during the year ended 2010 (see Note 2 regarding the impairment charge). We do not have significant continuing involvement in the operations of or cash flows from this asset group. Accordingly, the Michigan assets were reclassified as held for sale as of December 31, 2010, and the results of operations related to the those assets have been reported as discontinued operations in the consolidated statement of operations for 2010 and 2009.

Natural Gas and Crude Oil Well Drilling Activities. We offered our last sponsored drilling partnership in October 2007. In January 2008, we first announced that we had no plans to sponsor a new drilling partnership in 2008 and this decision was upheld again in 2009. As of June 30, 2009, all remaining contractual drilling and completion obligations were completed for all partnerships and we did not have any plans in the foreseeable future to sponsor a drilling partnership; accordingly, we reclassified our natural gas and crude oil well drilling activities as discontinued operations.