XML 64 R10.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Property And Equipment | 6 Months Ended
--- | ---
Jun. 30, 2012
Property, Plant and Equipment [Abstract] |
Property And Equipment | PROPERTY AND EQUIPMENT The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of June 30, 2012 and December 31, 2011 are as follows:
| June 30, 2012 |  | December 31, 2011
Oil and natural gas properties | $ | 1,219,376,000 |  |  | $ | 1,035,754,000 |
Office furniture and fixtures | 4,201,000 |  |  | 3,692,000 |
Building | 3,926,000 |  |  | 4,049,000 |
Land | 260,000 |  |  | 283,000 |
Total property and equipment | 1,227,763,000 |  |  | 1,043,778,000 |
Accumulated depletion, depreciation, amortization and impairment | (620,182,000 | ) |  | (575,142,000 | )
Property and equipment, net | $ | 607,581,000 |  |  | $ | 468,636,000 |
Included in oil and gas properties at June 30, 2012 is the cumulative capitalization of $27,630,000 in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $2,160,000 and $4,136,000 for the three months and six months ended June 30, 2012, respectively, and $1,411,000 and $2,788,000 for the three months and six months ended June 30, 2011, respectively. The following table summarizes the Company’s non-producing properties excluded from amortization by area at June 30, 2012:
| June 30, 2012
West Texas Permian | $ | 15,033,000 |
Colorado | 5,697,000 |
Bakken | 300,000 |
Southern Louisiana | 709,000 |
Ohio | 172,103,000 |
Belize | 5,711,000 |
Other | 45,000 |
| $ | 199,598,000 |
The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company’s activities, the inclusion of most of the above referenced costs into the Company’s amortization calculation is expected to occur within three to five years. A reconciliation of the asset retirement obligation for the six months ended June 30, 2012 and 2011 is as follows:
| June 30, 2012 |  | June 30, 2011
Asset retirement obligation, beginning of period | $ | 12,653,000 |  |  | $ | 10,845,000 |
Liabilities incurred | 1,176,000 |  |  | 449,000 |
Liabilities settled | (1,002,000 | ) |  | — |
Accretion expense | 353,000 |  |  | 323,000 |
Asset retirement obligation as of end of period | 13,180,000 |  |  | 11,617,000 |
Less current portion | 60,000 |  |  | 635,000 |
Asset retirement obligation, long-term | $ | 13,120,000 |  |  | $ | 10,982,000 |
On May 7, 2012, the Company entered into a contribution agreement with Diamondback Energy, Inc., (“Diamondback”). Under the terms of the contribution agreement, the Company agreed to contribute to Diamondback, prior to the closing of the Diamondback initial public offering (“Diamondback IPO”), all its oil and gas interests in the Permian Basin in exchange for (i) shares of common stock representing 35% of Diamondback’s outstanding common stock immediately prior to the closing of the Diamondback IPO and (ii) $63,590,050.00 in the form of a non-interest bearing promissory note, which will be repaid in full upon the closing of the Diamondback IPO with a portion of the net proceeds from that offering. The aggregate consideration payable to the Company is subject to a post-closing cash adjustment based on changes in the working capital, long-term debt and other items of Windsor Permian LLC (“Windsor Permian”) referred to in the contribution agreement as of the date of the contribution. Windsor Permian, an entity controlled by Wexford, is the operator of the Company’s acreage to be contributed and will be a wholly-owned subsidiary of Diamondback at the time of the contribution. The Company’s obligation to make this contribution is contingent upon, among other things, the contribution to Diamondback of all the outstanding equity interests in Windsor Permian, the Company’s satisfaction with the terms of the Diamondback IPO and customary closing conditions. Under the contribution agreement, the Company is generally responsible for all liabilities and obligations with respect to the contributed properties arising prior to the contribution and Diamondback is responsible for such liabilities and obligations with respect to the contributed properties arising after the contribution. In connection with the contribution, the Company and Diamondback will enter into an investor rights agreement in which the Company will have the right, for so long as it beneficially owns more than 10% of Diamondback’s outstanding common stock, to designate one individual as a nominee to serve on Diamondback’s board of directors. Such nominee, if elected to Diamondback’s board, will also serve on each committee of the board so long as he or she satisfies the independence and other requirements for service on the applicable committee of the board. So long as the Company has the right to designate a nominee to Diamondback’s board and there is no Gulfport nominee actually serving as a Diamondback director, the Company will have the right to appoint one individual as an advisor to the board who shall be entitled to attend board and committee meetings. The Company will also be entitled to certain information rights and Diamondback will grant the Company certain demand and “piggyback” registration rights obligating Diamondback to register with the SEC any shares of Diamondback common stock that the Company owns. If the contribution is completed, the Company will own a 35% equity interest in Diamondback immediately prior to the closing of the Diamondback IPO, rather than leasehold interests in the Company’s Permian Basin acreage. In the event the contribution is completed, the investment in Diamondback will be accounted for as an equity method investment going forward.

X
- Details
Name: | us-gaap_PropertyPlantAndEquipmentAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.13-14) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 12 -Paragraph 5 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6391035&loc=d3e2868-110229 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2921-110230 + Details
Name: | us-gaap_PropertyPlantAndEquipmentDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration