Quarterly report pursuant to Section 13 or 15(d)

Global Settlement with Joint Interest Partner

v2.4.0.6
Global Settlement with Joint Interest Partner
3 Months Ended
Mar. 31, 2012
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 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 basis difference in the assets, of Callon Entrada to be $2,681 as 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 $8,668 were recorded during 2011 as a $5,041 gain and $3,718 as an adjustment to the Company's full cost pool of oil and natural gas properties.

As of March 31, 2012, the remaining unsold assets had carrying values of $6,008 and are included in the Company's balance sheet as a component of Other property and equipment, net. The Company is actively marketing these assets.