Related Party Transactions

6 Months Ended

Jun. 30, 2012

Related Party Transactions

Related Party Transactions

Note 14 — Related Party Transactions

The Company previously engaged Nytis Exploration Company (“NEC”) to assist in the management, direction and supervision of the operations and business functions of the Company.  A service agreement between the Company, NEC and other related entities provided for the compensation of NEC in performing these duties. For the three and six months ended June 30, 2011, NEC charged the Company approximately $302,000 and $673,000 for general and administrative expenses pursuant to this service agreement.

The services agreement was terminated on June 30, 2011.  Effective July 1, 2011, the parties entered into a new agreement whereby the Company manages, directs and supervises the operations and business of NEC and other related entities.  The new agreement’s initial term of one year is automatically renewable for successive one-year terms.  For the three and six month period ended June 30, 2012, pursuant to the new service agreement, the Company charged NEC $45,000 and $90,000, respectively.

As of June 30, 2012, NEC and the other related entities owe the Company approximately $620,000.  This receivable consists primarily of charges incurred under the service agreement, short-term advances and reimbursement of other general and administrative expenses paid by Carbon.  This receivable is reflected in accounts receivable on the Company’s consolidated balance sheets.