2012 Annual Report - Stone Energy Corporation

DivestituresIn the fourth quarter of 2011, we completed the sale of our non-operated interest in the Main Pass Block 296 and 311 fields totwo separate parties for total cash consideration of approximately $80,381 and the assumption by the third parties of the associatedasset retirement obligation of approximately $10,900. The sale was accounted for as an adjustment to the full cost pool with nogain or loss recognized.NOTE 6 — INVESTMENT IN OIL AND GAS PROPERTIES:The following table discloses certain financial data relative to our oil and gas producing activities located onshore and offshorein the continental United States:Year Ended December 31,2012 2011 2010Oil and gas properties, proved and unevaluated:Balance, beginning of year ................................................................. $7,049,777 $6,202,758 $5,741,081Costs incurred during the year (capitalized):Acquisition costs, net of sales of unevaluated properties ............... 102,807 270,354 127,069Exploratory costs ........................................................................... 81,458 84,199 42,205Development costs (1) ................................................................... 395,555 426,355 241,387Salaries, general and administrative costs ...................................... 25,318 24,430 20,521Interest ........................................................................................... 37,656 42,033 30,783Less: overhead reimbursements .................................................... (310) (352) (288)Total costs incurred during the year, net of divestitures ..................... 642,484 847,019 461,677Balance, end of year ............................................................................ $7,692,261 $7,049,777 $6,202,758Accumulated depreciation, depletion and amortization (DD&A):Balance, beginning of year ............................................................ ($5,174,729) ($4,804,949) ($4,555,372)Provision for DD&A ...................................................................... (341,096) (276,480) (242,745)Sale of proved properties ............................................................... 5,659 (93,300) (6,832)Balance, end of year ............................................................................ ($5,510,166) ($5,174,729) ($4,804,949)Net capitalized costs, proved and unevaluated.................................... $2,182,095 $1,875,048 $1,397,809DD&A per Mcfe ................................................................................. $3.69 $3.45 $3.08(1) Includes capitalized asset retirement costs of $95,293, $96,386 and $56,444, respectively.Costs incurred during the year (expensed):Lease operating expenses ............................................................... $215,003 $175,881 $150,212Transportation, processing and gathering expenses ....................... 21,782 8,958 7,218Production taxes ............................................................................. 10,015 9,380 5,808Accretion expense .......................................................................... 33,331 30,764 34,469Expensed costs .................................................................................... $280,131 $224,983 $197,707The following table discloses net costs incurred (evaluated) on our unevaluated properties:Year Ended December 31,Unevaluated oil and gas properties: 2012 2011 2010Net costs incurred (evaluated) during year:Acquisition costs .................................................... $9,739 ($2,397) $42,664Exploration costs .................................................... (1,209) (51,207) 10,491Capitalized interest ................................................. 37,656 42,033 30,783$46,186 ($11,571) $83,938F-14