PROPERTIES AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2013

2. PROPERTIES AND EQUIPMENT, NET

Properties and equipment, net are comprised of the following:

	September 30,			December 31,
(In thousands)	2013			2012

Proved oil and gas properties	$	6,522,753		$	5,724,940
Unproved oil and gas properties	444,353			467,483
Gathering and pipeline systems	240,285			239,656
Land, building and other equipment	92,740			86,137
	7,300,131			6,518,216
Accumulated depreciation, depletion and amortization	(2,609,955		)	(2,207,239		)
	$	4,690,176		$	4,310,977

At September 30, 2013, the Company did not have any projects that had exploratory well costs that were capitalized for a period of greater than one year after drilling.

Divestitures

In June 2012, the Company sold a 35% non-operated working interest associated with certain of its Pearsall Shale undeveloped leaseholds in south Texas to a wholly-owned subsidiary of Osaka Gas Co., Ltd. (Osaka) for total consideration of approximately $251.0 million. The Company received $125.0 million in cash proceeds and Osaka agreed to fund 85% of the Company’s share of future drilling and completion costs associated with these leaseholds until it has paid approximately $126.0 million in accordance with a joint development agreement entered into at the closing. The Company recognized a $67.0 million gain on sale of assets associated with this sale. The drilling and completion carry under the joint development agreement will terminate two years after the closing of the transaction; however, based on the Company’s current drilling and completion activities in the Pearsall Shale, the Company expects that the carry will be fully satisfied in the fourth quarter of 2013.

Subsequent Event

In October 2013, the Company entered into purchase and sale agreements to sell certain proved and unproved oil and gas properties located in the Oklahoma and Texas panhandles for approximately $160.0 million and west Texas for approximately $28.0 million. These transactions are expected to close in the fourth quarter 2013, subject to customary closing conditions and adjustments.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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