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Global Settlement with Joint Interest Partner
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12 Months Ended |
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Dec. 31, 2012
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| Variable Interest Entity Wind-Down [Abstract] | |
| Global Settlement with Joint Interest Partner |
Global Settlement with Joint Interest Partner
During May 2011, the Company entered into a final project wind-down agreement (the "Agreement") with CIECO. As a result of this Agreement, which included both the assignment of the rights to the Entrada assets (including the rights to 50% of the assets previously held by CIECO and the rights to 50% of the assets held by Callon Entrada) and the proceeds from the ultimate sale of such assets, the Company gained the power to direct the activities related to the sale of the remaining assets, and therefore became the primary beneficiary of Callon Entrada. Therefore, Callon Entrada was consolidated in the Company's consolidated financial statements, effective April 29, 2011. Upon consolidating Callon Entrada, the Company estimated the fair values of the assets acquired to be $11,349 and liabilities assumed, primarily deferred tax liabilities associated with the tax basis difference in the assets, of Callon Entrada to be $2,681as a result of this Agreement. Also in connection with this Agreement, Callon Entrada agreed to pay to CIECO approximately $438, which represented the net balance of joint interest billings due to CIECO and which had been previously accrued. The agreement also included joint releases of each party from any further liabilities or obligations to the other party in connection with the Entrada project. The adjusted fair market value of the net assets acquired of approximately $8,759 were recorded during 2011 as a $5,041 gain and $3,718 as an adjustment to the Company's full cost pool of crude oil and natural gas properties.
While the Company continues to actively market these assets, its inability to complete a transaction over the past several quarters constituted an impairment indicator, which prompted the Company to reevaluate the remaining value of the assets. As of December 31, 2012, the remaining unsold assets, which are included in the Company's balance sheet as a component of Other property and equipment, net had carrying values of $3,634. During the year ended December 31, 2012, the Company sold assets valued at $527, and recorded an impairment charge of $1,177 to its Statement of Operations as a result of the Company's December 31, 2012 impairment analysis. The Company continues to actively market these assets, and will continue to monitor the assets for additional impairment. See Note 7 for additional information regarding the determination of the assets' fair values.
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