Property, Plant and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, plant and equipment consists of the following (in thousands):



	December 31,
	2012			2011
Oil and natural gas properties
Proved(1)	$	12,262,921		$	8,969,296
Unproved	865,863			689,393
Total oil and natural gas properties	13,128,784			9,658,689
Less accumulated depreciation, depletion and impairment	(5,231,182		)	(4,791,534		)
Net oil and natural gas properties capitalized costs	7,897,602			4,867,155
Land	17,927			14,196
Non-oil and natural gas equipment(2)	643,370			668,391
Buildings and structures	205,349			133,147
Total	866,646			815,734
Less accumulated depreciation and amortization	(284,271		)	(293,465		)
Other property, plant and equipment, net	582,375			522,269
Total property, plant and equipment, net	$	8,479,977		$	5,389,424

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(1)	Includes cumulative capitalized interest on oil and natural gas properties of $11.7 million and $1.6 million at December 31, 2012 and 2011, respectively.


(2)	Includes cumulative capitalized interest of approximately $11.4 million and $6.7 million at December 31, 2012 and 2011, respectively.

There was no full cost ceiling impairment during any of the years ended December 31, 2012, 2011 or 2010. Cumulative full cost ceiling limitation impairment charges of $3.5 billion at both December 31, 2012 and 2011 were included in accumulated depreciation, depletion and impairment for oil and natural gas properties in the accompanying consolidated balance sheets. See Note 8 for discussion of impairment of non-oil and natural gas property, plant and equipment.

The average rates used for depreciation and depletion of oil and natural gas properties were $16.93 per Boe in 2012, $13.57 per Boe in 2011 and $13.24 per Boe in 2010.

Costs Excluded from Amortization

Costs associated with unproved properties of $865.9 million as of December 31, 2012 were excluded from amounts subject to amortization. The following table summarizes the costs, by year incurred, related to unproved properties and pipe inventory, which were excluded from oil and natural gas properties subject to amortization at December 31, 2012 (in thousands):



			Year Cost Incurred
	Total		2012		2011		2010		2009 and Prior
Property acquisition	$	856,290	$	377,185	$	76,754	$	286,758	$	115,593
Exploration(1)	81,940		57,579		5,846		6,285		12,230
Total costs incurred	$	938,230	$	434,764	$	82,600	$	293,043	$	127,823

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(1)	Includes $72.4 million of pipe inventory costs incurred ($54.9 million in 2012, $2.3 million in 2011, $5.1 million in 2010 and $10.1 million in 2009 and prior years).

The Company expects to complete the majority of the evaluation activities within 10 years from the applicable date of acquisition, contingent on the Company’s capital expenditures and drilling program. In addition, the Company’s internal engineers evaluate all properties on at least an annual basis.

- 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.

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