NOTE 6 — INVESTMENT IN OIL AND GAS PROPERTIES:

The following table discloses certain financial data relative to our oil and gas producing activities located onshore and offshore in the continental United States:


	Year Ended December 31,
	2012			2011			2010
Oil and gas properties, proved and unevaluated:
Balance, beginning of year	$	7,049,777		$	6,202,758		$	5,741,081
Costs incurred during the year (capitalized):
Acquisition costs, net of sales of unevaluated properties		102,807			270,354			127,069
Exploratory costs		81,458			84,199			42,205
Development costs (1)		395,555			426,355			241,387
Salaries, general and administrative costs		25,318			24,430			20,521
Interest		37,656			42,033			30,783
Less: overhead reimbursements		(310	)		(352	)		(288	)

Total costs incurred during the year, net of divestitures		642,484			847,019			461,677

Balance, end of year	$	7,692,261		$	7,049,777		$	6,202,758


Accumulated depreciation, depletion and amortization (DD&A):
Balance, beginning of year	($	5,174,729	)	($	4,804,949	)	($	4,555,372	)
Provision for DD&A		(341,096	)		(276,480	)		(242,745	)
Sale of proved properties		5,659			(93,300	)		(6,832	)

Balance, end of year	($	5,510,166	)	($	5,174,729	)	($	4,804,949	)


Net capitalized costs, proved and unevaluated	$	2,182,095		$	1,875,048		$	1,397,809


DD&A per Mcfe	$	3.69		$	3.45		$	3.08


(1) Includes capitalized asset retirement costs of $95,293, $96,386 and $56,444, respectively.

Costs incurred during the year (expensed):
Lease operating expenses	$	215,003		$	175,881		$	150,212
Transportation, processing and gathering expenses		21,782			8,958			7,218
Production taxes		10,015			9,380			5,808
Accretion expense		33,331			30,764			34,469

Expensed costs	$	280,131		$	224,983		$	197,707

The following table discloses net costs incurred (evaluated) on our unevaluated properties:


	Year Ended December 31,
	2012			2011			2010
Unevaluated oil and gas properties:
Net costs incurred (evaluated) during year:
Acquisition costs	$	9,739		($	2,397	)	$	42,664
Exploration costs		(1,209	)		(51,207	)		10,491
Capitalized interest		37,656			42,033			30,783

	$	46,186		($	11,571	)	$	83,938

The following table discloses financial data associated with unevaluated costs at December 31, 2012:


	Balance as of		Net Costs Incurred During the Year Ended December 31,
	December 31, 2012		2012		2011		2010		2009 and prior

Acquisition costs	$	258,580	$	43,544	$	39,984	$	104,154	$	70,898
Exploration costs		108,248		81,246		2,335		5,151		19,516
Capitalized interest		80,967		30,989		27,818		13,762		8,398

Total unevaluated costs	$	447,795	$	155,779	$	70,137	$	123,067	$	98,812

Approximately 124 specifically identified drilling projects are included in unevaluated costs at December 31, 2012 and are expected to be evaluated in the next four years. The excluded costs will be included in the amortization base as the properties are evaluated and proved reserves are established or impairment is determined. Interest costs capitalized on unevaluated properties during the years ended December 31, 2012, 2011 and 2010 totaled $37,656, $42,033 and $30,783, respectively.