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Equity Investment in Savoy (Savoy [Member]) | 12 Months Ended
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Dec. 31, 2014
Savoy [Member] |
Equity Investment | (14) Equity Investment in Savoy We currently own a 40% interest in Savoy Energy, L.P., a private company engaged in the oil and gas business primarily in the state of Michigan. Savoy uses the successful efforts method of accounting. Our 45% ownership was decreased to 40% on October 1, 2014 due to the exercise of options by Savoy’s management. We account for our interest using the equity method of accounting. Below (in thousands) to the 100% is a condensed balance sheet at December 31, for both years and a condensed statement of operations for both years.
Condensed Balance Sheet
|  | 2014 |  |  | 2013 |
Current assets |  | $ | 14,863 |  |  | $ | 29,182 |
Oil and gas properties, net |  |  | 27,549 |  |  |  | 25,408 |
Other |  |  | 852 |  |  |  | 260 |
|  | $ | 43,264 |  |  | $ | 54,850 |
Total liabilities |  | $ | 10,079 |  |  | $ | 16,447 |
Partners' capital |  |  | 33,185 |  |  |  | 38,403 |
|  | $ | 43,264 |  |  | $ | 54,850 |
Condensed Statement of Operations
|  | 2014 |  |  | 2013 |
Revenue |  | $ | 41,583 |  |  | $ | 42,248 |
Expenses |  |  | (29,354 | ) |  |  | (29,322 | )
Net income |  | $ | 12,229 |  |  | $ | 12,926 |
In 2014, Savoy engaged Energy Spectrum Advisors Inc. (ESA) to market its Trenton-Black River oil properties located in southeast Michigan. No acceptable offers were received. Marketing efforts are on hold until oil prices recover Savoy made a $12 million cash distribution in early October 2014; our share was $4.9 million; such amount was applied toward our bank debt as required under the new credit agreement. Unaudited Oil and Gas Reserve Quantity and Value Information (in thousands) The data below is shown proportionate to our 40% (45% in 2013) ownership of Savoy.
Costs incurred are as follows: |  | 2014 |  |  | 2013 |  |
Unproved property acquisition |  | $ | 899 |  |  | $ | 1,287 |  |
Development |  |  | 1,224 |  |  |  | 858 |  |
Exploration |  |  | 5,130 |  |  |  | 7,061 |  |
Total |  | $ | 7,253 |  |  | $ | 9,206 |  |
|  |  | Oil |  |  | NGLs |  |  |  | Natgas |
|  |  | (Bbls) |  |  | (Bbls) |  |  |  | (Mcf) |
Change in proved reserves: |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2013 |  |  | 700 |  |  |  | 29 |  |  |  | 1,108 |
Extensions and discoveries |  |  | 898 |  |  |  | 58 |  |  |  | 442 |
Production |  |  | (153 | ) |  |  | (11 | ) |  |  | (96 | )
Revisions to previous estimates |  |  | 24 |  |  |  | 23 |  |  |  | (153 | )
December 31, 2013 |  |  | 1,469 |  |  |  | 99 |  |  |  | 1,301 |
Extensions and discoveries |  |  | 262 |  |  |  | 14 |  |  |  | 253 |
Production |  |  | (143 | ) |  |  | (9 | ) |  |  | (83 | )
Revisions to previous estimates |  |  | (840 | ) |  |  | (60 | ) |  |  | (956 | )
Change in ownership from 45% to 40% |  |  | (73 | ) |  |  | (5 | ) |  |  | (65 | )
December 31, 2014 |  |  | 675 |  |  |  | 39 |  |  |  | 450 |
Proved developed reserves included above: |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2013 |  |  | 746 |  |  |  | 60 |  |  |  | 450 |
December 31, 2014 |  |  | 467 |  |  |  | 30 |  |  |  | 292 |
Proved undeveloped reserves (PUDs) included above: |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2013 |  |  | 723 |  |  |  | 39 |  |  |  | 851 |
December 31, 2014 |  |  | 208 |  |  |  | 9 |  |  |  | 158 |
FOR INFORMATION PURPOSES ONLY
|  | Proved |  |  |  |  |  | Total |
December 31, 2014 based on current and future NYMEX strip prices |  | Developed |  |  | PUDs |  |  | Proved |
Future cash inflows: |  |  |  |  |  |  |  |  |
Oil |  | $ | 24,768 |  |  | $ | 12,239 |  |  | $ | 37,007 |
NGLs |  |  | 785 |  |  |  | 252 |  |  |  | 1,037 |
Natgas |  |  | 915 |  |  |  | 683 |  |  |  | 1,598 |
Total cash inflows |  |  | 26,468 |  |  |  | 13,174 |  |  |  | 39,642 |
Future production costs |  |  | (9,462 | ) |  |  | (3,398 | ) |  |  | (12,860 | )
Future development costs |  |  | (58 | ) |  |  | (1,800 | ) |  |  | (1,858 | )
Future income tax (none since Savoy is a pass-through entity for income tax purposes) |  |  |  |  |  |  |  |  |  |  |  |
Future net cash flows |  |  | 16,948 |  |  |  | 7,976 |  |  |  | 24,924 |
10% annual discount for estimated timing of cash flows |  |  | (3,608 | ) |  |  | (2,336 | ) |  |  | (5,944 | )
Discounted future net cash flows |  | $ | 13,340 |  |  | $ | 5,640 |  |  | $ | 18,980 |
|  | Proved |  |  |  |  |  | Total |
December 31, 2014 based on SEC first-of-month average prices |  | Developed |  |  | PUDs |  |  | Proved |
Future cash inflows: |  |  |  |  |  |  |  |  |
Oil |  | $ | 41,660 |  |  | $ | 18,530 |  |  | $ | 60,190 |
NGLs |  |  | 1,256 |  |  |  | 368 |  |  |  | 1,624 |
Natgas |  |  | 1,203 |  |  |  | 721 |  |  |  | 1,924 |
Total cash inflows |  |  | 44,119 |  |  |  | 19,619 |  |  |  | 63,738 |
Future production costs |  |  | (12,886 | ) |  |  | (3,749 | ) |  |  | (16,635 | )
Future development costs |  |  | (60 | ) |  |  | (1,790 | ) |  |  | (1,850 | )
Future income tax (none because Savoy is a pass-through entity for income tax purposes) |  |  |  |  |  |  |  |  |  |  |  |
Future net cash flows |  |  | 31,173 |  |  |  | 14,080 |  |  |  | 45,253 |
10% annual discount for estimated timing of cash flows |  |  | (7,125 | ) |  |  | (4,028 | ) |  |  | (11,153 | )
Standardized measure of discounted future net cash flows |  | $ | 24,048 |  |  | $ | 10,052 |  |  | $ | 34,100 |
|  | Proved |  |  |  |  |  | Total |
December 31, 2013 based on SEC first-of-month average prices |  | Developed |  |  | PUDs |  |  | Proved |
Future cash inflows: |  |  |  |  |  |  |  |  |
Oil |  | $ | 70,582 |  |  | $ | 70,662 |  |  | $ | 141,244 |
NGLs |  |  | 2,551 |  |  |  | 1,669 |  |  |  | 4,220 |
Natgas |  |  | 1,365 |  |  |  | 976 |  |  |  | 2,341 |
Total cash inflows |  |  | 74,498 |  |  |  | 73,307 |  |  |  | 147,805 |
Future production costs |  |  | (12,213 | ) |  |  | (12,233 | ) |  |  | (24,446 | )
Future development costs |  |  |  |  |  |  | (3,073 | ) |  |  | (3,073 | )
Future income tax (none because Savoy is a pass-through entity for income tax purposes) |  |  |  |  |  |  |  |  |  |  |  |
Future net cash flows |  |  | 62,285 |  |  |  | 58,001 |  |  |  | 120,286 |
10% annual discount for estimated timing of cash flows |  |  | (14,375 | ) |  |  | (15,111 | ) |  |  | (29,486 | )
Standardized measure of discounted future net cash flows |  | $ | 47,910 |  |  | $ | 42,890 |  |  | $ | 90,800 |
|  |  | 2014 |  |  |  | 2013 |
Beginning of year |  | $ | 90,800 |  |  | $ | 35,300 |
Sales, net of production costs |  |  | (11,000 | ) |  |  | (12,600 | )
Net changes in prices and production costs |  |  | (5,700 | ) |  |  | 1,600 |
Extensions and discoveries |  |  | 13,300 |  |  |  | 57,200 |
Revisions of previous quantity estimates |  |  | (61,000 | ) |  |  | 2,100 |
Change in production timing and other |  |  | 3,100 |  |  |  | 3,700 |
Change in ownership from 45% to 40% |  |  | (4,500 | ) |  |  |  |
Accretion of discount |  |  | 9,100 |  |  |  | 3,500 |
End of year |  | $ | 34,100 |  |  | $ | 90,800 |
Average wellhead prices based on SEC average prices: |  |  |  |  |  |  |
Oil (per Bbl) |  | $ | 89 |  |  | $ | 95
NGLs (per Bbl) |  |  | 41 |  |  |  | 42
Natgas (per Mcf) |  |  | 4.27 |  |  |  | 3.04
Average wellhead prices based on NYMEX strip prices: |  |  |  |  |  |  |
Oil (per Bbl) |  |  | 59 |  |  |  |
NGLs (per Bbl) |  |  | 28 |  |  |  |
Natgas (per Mcf) |  |  | 3.94 |  |  |  |
The 2014 reserve estimates shown above have been independently evaluated by Netherland, Sewell & Associates, Inc. (NSAI), a worldwide leader of petroleum property analysis for industry and financial organizations and government agencies. NSAI was founded in 1961 and performs consulting petroleum engineering services under Texas Board of Professional Engineers Registration No. F-2699. Within NSAI, the technical person primarily responsible for preparing the estimates set forth in the NSAI reserves report incorporated herein is Mr. G. Lance Binder. Mr. Binder, a Licensed Professional Engineer in the State of Texas (No. 61794), has been practicing consulting petroleum engineering at NSAI since 1983 and has over 5 years of prior industry experience. He graduated from Purdue University in 1978 with a Bachelor of Science Degree in Chemical Engineering. He meets or exceeds the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers; he is proficient in judiciously applying industry standard practices to engineering evaluations as well as applying SEC and other industry reserves definitions and guidelines. Brock Engineering, LLC, an independent petroleum engineering firm, estimated our proved reserves as of December 31, 2013. Differences in the professional opinions of the two engineering firms, plus the fact that estimates of proved reserves are inherently imprecise and are continually subject to revision based on production history, results of additional exploration and development, price changes and other factors are the primary reasons for the 2014 downward revision.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32847-111569 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32787-111569 + Details
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