Other Operating Revenues and Expenses

Net other operating revenues and expenses for the years ended December 31, 2012, 2011 and 2010 are as follows:



	2012			2011			2010
	(In thousands)
Other operating revenues:
Gain on sales of assets	$	1,496		$	15,744		$	3,680
Net marketing revenue	581			—			—
Total other operating revenues	$	2,077		$	15,744		$	3,680
Other operating expenses:
Loss on sales of assets	$	(523	)	$	(945	)	$	(1,655	)
Impairment of inventory	(510		)	(721		)	(95		)
Total other operating expenses	$	(1,033	)	$	(1,666	)	$	(1,750	)

In February 2011, we sold two 2,000 horsepower drilling rigs and related equipment for $22 million of total consideration. In connection with the sale, we recorded a gain of $13.2 million during the first quarter of 2011. Proceeds from the sale consisted of $11 million cash and an $11 million promissory note that was subsequently exchanged for a membership interest in Dalea Investment Group, LLC in June 2012 (See Note 13). In 2011, we also sold certain interests in two prospects in South Louisiana and recorded a gain of $852,000.

In June 2010, we sold our interests in 22 operated and 76 non-operated producing wells in North Louisiana for net proceeds of $73.1 million, after giving effect to customary closing adjustments and the allocation of approximately $2 million of proceeds to applicable APO Partnerships (see Note 10), resulting in a loss on the sale of approximately $1.4 million. Proceeds from the sale were used to repay indebtedness under our revolving credit facility. The assets that were sold in this transaction represented substantially all of our proved oil and gas properties in North Louisiana but did not meet the criteria for treatment as discontinued operations under applicable accounting standards. Additionally in August 2010, we sold our interest in a non-operated well and related leasehold interests in North Louisiana for net proceeds of $2.9 million, all of which was recorded as a gain on sale of assets.

We maintain an inventory of tubular goods and other well equipment for use in our exploration and development drilling activities. Inventory is carried at the lower of average cost or estimated fair market value. We categorize the measurement of fair value of inventory as Level 2 under applicable accounting standards. To determine estimated fair value of inventory, we subscribe to market surveys and obtain quotes from equipment dealers for similar equipment. We then correlate the data as needed to estimate the fair value of the specific items (or groups of similar items) in our inventory. If the estimated fair values for those specific items (or groups of similar items) in our inventory are less than the related average cost, a provision for impairment is made.