Property, Plant and Equipment

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

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



	June 30, 2013			December 31, 2012
Oil and natural gas properties
Proved(1)	$	10,355,137		$	12,262,921
Unproved	535,836			865,863
Total oil and natural gas properties	10,890,973			13,128,784
Less accumulated depreciation, depletion and impairment	(5,515,168		)	(5,231,182		)
Net oil and natural gas properties capitalized costs	5,375,805			7,897,602
Land	17,929			17,927
Non-oil and natural gas equipment(2)	607,665			643,370
Buildings and structures	221,453			205,349
Total	847,047			866,646
Less accumulated depreciation and amortization	(279,137		)	(284,271		)
Other property, plant and equipment, net	567,910			582,375
Total property, plant and equipment, net	$	5,943,715		$	8,479,977

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(1)	Includes cumulative capitalized interest of approximately $17.7 million and $11.7 million at June 30, 2013 and December 31, 2012, respectively.


(2)	Includes cumulative capitalized interest of approximately $13.8 million and $11.4 million at June 30, 2013 and December 31, 2012, respectively.

Assets held for sale. During the second quarter of 2013, the Company committed to a plan to sell various drilling and corporate assets. These assets are included in other current assets in the accompanying unaudited condensed consolidated balance sheet at June 30, 2013 as the Company intends to sell the assets within a year. The net book value of the drilling assets was adjusted to fair value, resulting in an impairment of $10.6 million and remaining net book value of $4.1 million, based upon the fair value for these assets estimated with a discounted cash flow model utilizing market assumptions of projections of future cash flows to be generated by the assets and risk-adjusted discount rates. Based on the unobservable nature of certain of these assumptions, the valuation is considered Level 3 under the fair value hierarchy, as described in Note 4. The net book value of the corporate asset to be sold was adjusted to fair value, resulting in an impairment of $2.9 million and remaining net book value of $17.0 million. The fair value of the corporate asset was based on current market value using observations of comparable assets for sale in the market.

Other Impairments. In the second quarter of 2013, the Company evaluated certain midstream pipe inventory and natural gas compressors for impairment after determining that their future use was limited. As a result of this evaluation, the Company recorded a $2.1 million impairment on these assets to reduce their carrying value to market value.

- 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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