Commitments and Contingencies | 9 Months Ended |
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Sep. 30, 2011 | |
| Commitments and Contingencies [Abstract] | |
| Commitments and Contingencies |
5. Commitments and Contingencies
In August 2011, we settled all claims with EnCana Oil & Gas (USA) Inc. (“EnCana”) arising out
of Approach Operating, LLC v. EnCana Oil & Gas (USA) Inc., Cause No. 29.070A, District Court of
Limestone County, Texas. As previously disclosed, on July 2, 2009, our operating subsidiary filed
a lawsuit against EnCana for breach of the joint operating agreement (“JOA”) covering our North
Bald Prairie project in East Texas and seeking damages for nonpayment of amounts owed under the JOA
as well as declaratory relief. As part of the release and settlement of all claims by both
parties, EnCana paid us $1.4 million. In addition, we will remain operator of the North Bald
Prairie project, subject to the terms of the JOA.
We are involved in various legal and regulatory proceedings arising in the normal course of
business. While we cannot predict the outcome of these proceedings with certainty, we do not
believe that an adverse result in any pending legal or regulatory proceeding, individually or in
the aggregate, would be material to our consolidated financial condition or cash flows; however, an
unfavorable outcome could have a material adverse effect on our results of operations for a
specific interim period or year.
We have entered into an 18-month contract for a dedicated, third-party fracture stimulation
fleet, effective September 1, 2011. The contract requires a minimum commitment of $3 million per
month for the contract term. The contract contains customary, early termination provisions for a
monthly fee of less than the minimum monthly commitment in the event of a termination before the
end of the contract term.
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