Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

NOTE 8 – STOCK-BASED COMPENSATION

For both the three months ended March 31, 2012 and 2011, we recognized stock compensation expense for restricted stock awards, stock options and stock settled SARs of $2.3 million, and capitalized stock compensation cost for oil and natural gas properties of $0.6 million. For these same periods, the tax benefit related to this stock based compensation was $0.9 million. The remaining unrecognized compensation cost related to unvested awards at March 31, 2012 is approximately $20.7 million of which $3.9 million is anticipated to be capitalized. The weighted average period of time over which this cost will be recognized is 1.0 year.

We did not grant any stock options or SARs during either of the three month periods ending March 31, 2012 and 2011.

The following table shows the fair value of any restricted stock awards granted during the periods indicated:


	Three Months Ended March 31,
	2012			2011

Shares granted		367,936			192,581

Estimated fair value (in millions)	$	15.6		$	10.0

Percentage of shares granted expected to be distributed		89	%		93	%

The restricted stock awards granted during the first three months of 2012 and 2011 are being recognized over a three year vesting period, except for a portion of those granted to certain executive officers. As to those executive officers, 30% of the shares granted, or 46,441 shares granted in 2012 and 20,062 shares granted in 2011 (the performance shares), will cliff vest in the first half of 2015 and 2014, respectively. The actual number of performance shares that vest in 2014 and 2015 will be based on the company's achievement of certain performance criteria over a three-year period, and will range from 50% to 150% of the restricted shares granted as performance shares. Based on the first year's results, the participants would receive less than 100% of the performance based shares. Total 2012 awards increased the stock compensation expense and the capitalized cost related to oil and natural gas properties for the first three months of 2012 by an aggregate of $0.8 million.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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