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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2012	Aug. 07, 2012
Document and Entity Information
Entity Registrant Name	Laredo Petroleum Holdings, Inc.
Entity Central Index Key	0001528129
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		128,231,994
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

Consolidated balance sheets - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 146,485	$ 28,002
Accounts receivable, net	71,832	74,135
Derivative financial instruments	20,513	13,281
Deferred income taxes		5,202
Other current assets	5,816	2,318
Total current assets	244,646	122,938
Oil and natural gas properties, full cost method:
Proved properties	2,551,524	2,083,015
Unproved properties not being amortized	127,971	117,195
Pipeline and gas gathering assets	63,667	58,136
Other fixed assets	21,840	16,948
Gross property and equipment	2,765,002	2,275,294
Less accumulated depreciation, depletion, amortization and impairment	1,008,597	896,785
Net property and equipment	1,756,405	1,378,509
Deferred income taxes	64,903	90,376
Derivative financial instruments	12,888	6,510
Deferred loan costs, net	31,666	23,457
Other assets, net	5,430	5,862
Total assets	2,115,938	1,627,652
Current liabilities:
Accounts payable	49,311	46,007
Undistributed revenue and royalties	31,565	26,844
Accrued capital expenditures	92,646	91,022
Accrued compensation and benefits	8,210	11,270
Derivative financial instruments	603	4,187
Accrued interest payable	26,193	20,112
Other current liabilities	15,498	14,919
Total current liabilities	224,026	214,361
Long-term debt	1,051,863	636,961
Derivative financial instruments	72	2,415
Asset retirement obligations	15,483	12,568
Other noncurrent liabilities	2,436	1,334
Total liabilities	1,293,880	867,639
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued at June 30, 2012 and December 31, 2011
Common stock, $0.01 par value, 450,000,000 shares authorized, and 128,296,239 and 127,617,391 issued, net of treasury, at June 30, 2012 and December 31, 2011, respectively	1,283	1,276
Additional paid-in capital	956,203	951,375
Accumulated deficit	(135,424)	(192,634)
Treasury stock, at cost, 7,609 common shares at June 30, 2012 and December 31, 2011	(4)	(4)
Total stockholders' equity	822,058	760,013
Total liabilities and stockholders' equity	$ 2,115,938	$ 1,627,652

Consolidated balance sheets (Parenthetical) - $ / shares	Jun. 30, 2012	Dec. 31, 2011
Consolidated balance sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	450,000,000	450,000,000
Common stock issued	128,296,239	127,617,391
Treasury stock, shares	7,609	7,609

Consolidated statements of operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Oil and natural gas sales	$ 139,609	$ 130,763	$ 288,560	$ 236,532
Natural gas transportation and treating	1,015	964	2,412	2,306
Total revenues	140,624	131,727	290,972	238,838
Costs and expenses:
Lease operating expenses	15,660	10,194	30,644	18,112
Production and ad valorem taxes	7,318	7,897	16,237	14,999
Natural gas transportation and treating	391	615	691	1,167
Drilling and production	333	397	1,771	693
General and administrative (including non-cash stock-based compensation of $2,588 and $557 for the three months ended June 30, 2012 and 2011, respectively, and $4,835 and $876 for the six months ended June 30, 2012 and 2011, respectively)	14,410	10,522	31,941	19,770
Accretion of asset retirement obligations	292	155	556	304
Depreciation, depletion and amortization	60,697	43,439	112,220	75,917
Impairment expense		37		243
Total costs and expenses	99,101	73,256	194,060	131,205
Operating income	41,523	58,471	96,912	107,633
Realized and unrealized gain (loss):
Commodity derivative financial instruments, net	28,543	18,449	29,137	(9,585)
Interest rate derivatives, net		(976)	(323)	(1,094)
Interest expense	(21,674)	(11,736)	(36,358)	(22,252)
Interest and other income	15	22	31	58
Write-off of deferred loan costs				(3,246)
Loss on disposal of assets	(8)	(18)	(8)	(35)
Non-operating income (expense), net	6,876	5,741	(7,521)	(36,154)
Income before income taxes	48,399	64,212	89,391	71,479
Income tax expense:
Deferred	(17,424)	(23,140)	(32,181)	(25,737)
Total income tax expense	(17,424)	(23,140)	(32,181)	(25,737)
Net income	$ 30,975	$ 41,072	$ 57,210	$ 45,742
Net income per common share:
Basic (in dollars per share)	$ 0.24		$ 0.45
Diluted (in dollars per share)	$ 0.24		$ 0.45
Weighted average common shares outstanding:
Basic (in shares)	126,921		126,862
Diluted (in shares)	128,222		128,101

Consolidated statements of operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated statements of operations
General and administrative, non-cash stock-based compensation	$ 2,588	$ 557	$ 4,835	$ 876

Consolidated statement of stockholders' equity - 6 months ended Jun. 30, 2012 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional paid-in capital	Treasury Stock (at cost)	Accumulated deficit
Balance at Dec. 31, 2011	$ 760,013	$ 1,276	$ 951,375	$ (4)	$ (192,634)
Balance (in shares) at Dec. 31, 2011		127,617		8
Increase (Decrease) in Stockholders' Equity
Restricted stock awards		$ 8	(8)
Restricted stock awards (in shares)		777
Restricted stock forfeitures		$ (1)	1
Restricted stock forfeitures (in shares)		(98)
Stock-based compensation	4,835		4,835
Net income	57,210				57,210
Balance at Jun. 30, 2012	$ 822,058	$ 1,283	$ 956,203	$ (4)	$ (135,424)
Balance (in shares) at Jun. 30, 2012		128,296		8

- Definition

This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation".

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 35
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415241&loc=d3e4534-113899

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 20
-Section 55
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6576910&loc=d3e11149-113907

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 20
-Section 55
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=6576910&loc=d3e11178-113907

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph A91
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 39
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Consolidated statements of cash flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 30,975	$ 41,072	$ 57,210	$ 45,742
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax expense	17,424	23,140	32,181	25,737
Depreciation, depletion and amortization	60,697	43,439	112,220	75,917
Impairment expense		37		243
Non-cash stock-based compensation	2,588	557	4,835	876
Accretion of asset retirement obligations	292	155	556	304
Unrealized (gain) loss on derivative financial instruments, net			(16,929)	7,192
Premiums paid for derivative financial instruments			(2,927)	(512)
Amortization of premiums paid for derivative financial instruments			319	216
Amortization of deferred loan costs			2,268	1,909
Write-off of deferred loan costs				3,246
Amortization of October 2011 Notes premium			(99)
Amortization of other assets			10	9
Loss on disposal of assets	8	18	8	35
(Increase) decrease in accounts receivable			2,303	(12,142)
(Increase) decrease in other current assets			(3,075)	(768)
Increase (decrease) in accounts payable			3,304	(6,513)
Increase (decrease) in undistributed revenues and royalties			4,721	8,019
Increase (decrease) in accrued compensation and benefits			(3,060)	(3,970)
Increase (decrease) in other accrued liabilities			4,828	16,572
Increase (decrease) in other noncurrent liabilities			1,117	(54)
Net cash provided by operating activities			199,790	162,058
Capital expenditures:
Oil and natural gas properties			(473,846)	(348,523)
Pipeline and gas gathering assets			(7,031)	(6,344)
Other fixed assets			(4,988)	(4,602)
Proceeds from other fixed asset disposals			34	20
Net cash used in investing activities			(485,831)	(359,449)
Cash flows from financing activities:
Borrowings on revolving credit facilities			195,000	180,100
Payments on revolving credit facilities			(280,000)	(231,300)
Payments on term loan				(100,000)
Issuance of 2019 Notes				350,000
Issuance of 2022 Notes			500,000
Payments for loan costs			(10,476)	(10,592)
Net cash provided by financing activities			404,524	188,208
Net increase (decrease) in cash and cash equivalents			118,483	(9,183)
Cash and cash equivalents, beginning of period			28,002	31,235
Cash and cash equivalents, end of period	146,485	22,052	146,485	22,052
Cash paid during the period:
Interest, net of $505 and zero, respectively, of capitalized interest for the six months ended June 30, 2012 and 2011, respectively	$ 1,356	$ 2,935	$ 27,956	$ 6,626

Consolidated statements of cash flows (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Consolidated statements of cash flows
Capitalized interest	$ 505	$ 0

Organization

6 Months Ended

Jun. 30, 2012

Organization

Organization

A—Organization

Laredo Petroleum Holdings, Inc. ("Laredo Holdings") together with its subsidiaries, is an independent energy company focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States. Laredo Holdings was incorporated pursuant to the laws of the State of Delaware on August 12, 2011 for the purposes of a Corporate Reorganization (as defined below) and the initial public offering of its common stock (the "IPO") on December 20, 2011. As a holding company, Laredo Holdings' management operations are conducted through its wholly-owned subsidiary, Laredo Petroleum, Inc. ("Laredo"), a Delaware corporation, and Laredo's subsidiaries, Laredo Petroleum Texas, LLC ("Laredo Texas"), a Texas limited liability company, Laredo Gas Services, LLC ("Laredo Gas"), a Delaware limited liability company, and Laredo Petroleum—Dallas, Inc. ("Laredo Dallas"), a Delaware corporation.

On July 1, 2011, Laredo Petroleum, LLC ("Laredo LLC"), a Delaware limited liability company, and Laredo completed the acquisition of Broad Oak Energy, Inc., a Delaware corporation ("Broad Oak"), for a combination of equity and cash. Prior to the acquisition, Broad Oak was owned by its management and Warburg Pincus Private Equity, L.P. ("Warburg Pincus IX"). On July 19, 2011, Broad Oak's name was changed to Laredo Petroleum—Dallas, Inc.

On December 19, 2011, immediately prior to the IPO, Laredo LLC merged with and into Laredo Holdings, with Laredo Holdings being the surviving entity. Warburg Pincus IX and other affiliates of Warburg Pincus LLC were majority owners of Laredo LLC and are of Laredo Holdings. The preferred units and certain series of restricted units of Laredo LLC were exchanged into shares of common stock of Laredo Holdings based on the pre-offering equity value of such units (the "Corporate Reorganization"). The common stock has one vote per share and a par value of $0.01 per share.

In these notes, the "Company," when used in the present tense, prospectively or for historical periods since December 19, 2011, refers to Laredo Holdings, Laredo and its subsidiaries collectively, and for historical periods prior to December 19, 2011 refers to Laredo LLC, Laredo and its subsidiaries collectively, unless the context indicates otherwise.

Basis of presentation and significant accounting policies

6 Months Ended

Jun. 30, 2012

Basis of presentation and significant accounting policies

Basis of presentation and significant accounting policies

B—Basis of presentation and significant accounting policies

1. Basis of presentation

The accompanying unaudited consolidated financial statements were derived from the historical accounting records of the Company and reflect the historical financial position, results of operations and cash flows for the periods described herein. The Broad Oak acquisition discussed in Note A was accounted for in a manner similar to a pooling of interests. The historical financial statements present the assets and liabilities of Laredo Holdings and its subsidiaries and Broad Oak at historical carrying values and their operations as if they were consolidated for all periods presented. All material intercompany transactions and account balances have been eliminated in the consolidation of accounts. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company operates oil and natural gas properties as one business segment, which explores for, develops and produces oil and natural gas.

The accompanying consolidated financial statements have not been audited by the Company's independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2011 is derived from audited consolidated financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all necessary adjustments to present fairly the Company's financial position at June 30, 2012, the results of operations for the three and six months ended June 30, 2012 and 2011 and cash flows for the six months ended June 30, 2012 and 2011. All such adjustments are of a normal recurring nature.

Certain disclosures have been condensed or omitted from these unaudited consolidated financial statements. Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Laredo Holdings' Annual Report on Form 10-K for the year ended December 31, 2011 (the "2011 Annual Report").

2. Use of estimates in the preparation of interim unaudited consolidated financial statements

The preparation of the accompanying unaudited consolidated financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. The interim results reflected in the unaudited consolidated financial statements are not necessarily indicative of the results that may be expected for other interim periods or for the full year.

Significant estimates include, but are not limited to, estimates of the Company's reserves of oil and natural gas, future cash flows from oil and natural gas properties, depreciation, depletion and amortization, asset retirement obligations, stock-based compensation, deferred income taxes and fair values of commodity, interest rate derivatives and commodity deferred premiums. As fair value is a market-based measurement, it is determined based on the assumptions that market participants would use. These estimates and assumptions are based on management's best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Such estimates and assumptions are adjusted when facts and circumstances dictate. Illiquid credit markets and volatile equity and energy markets have combined to increase the uncertainty inherent in such estimates and assumptions. Management believes its estimates and assumptions to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual values and results could differ from these estimates. Any changes in estimates resulting from future changes in the economic environment will be reflected in the financial statements in future periods.

3. Accounts receivable

The Company sells oil and natural gas to various customers and participates with other parties in the drilling, completion and operation of oil and natural gas wells. Joint interest and oil and natural gas sales receivables related to these operations are generally unsecured. Accounts receivable for joint interest billings are recorded as amounts billed to customers less an allowance for doubtful accounts. Amounts are considered past due after 30 days. The Company determines joint interest operations accounts receivable allowances based on management's assessment of the creditworthiness of the joint interest owners and as the operator in the majority of its wells the ability to realize the receivables through netting of anticipated future production revenues. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses, current receivables aging, and existing industry and economic data. The Company reviews its allowance for doubtful accounts quarterly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is remote.

Accounts receivable consist of the following components as of June 30, 2012 and December 31, 2011:

(in thousands)	June 30, 2012		December 31, 2011

Oil and natural gas sales	$	38,945	$	49,434
Joint operations(1)		31,104		24,190
Other		1,783		511

Total, net	$	71,832	$	74,135

(1): Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of approximately $0.1 million at each of June 30, 2012 and December 31, 2011.

4. Derivative financial instruments

The Company uses derivative financial instruments to reduce exposure to fluctuations in the prices of oil and natural gas. By removing a significant portion of the price volatility associated with future production, the Company expects to mitigate, but not eliminate, the potential effects of variability in cash flows from operations due to fluctuations in commodity prices. These transactions are primarily in the form of collars, swaps, puts and basis swaps. In addition, the Company enters into derivative contracts in the form of interest rate derivatives to minimize the effects of fluctuations in interest rates.

Derivative instruments are recorded at fair value and are included on the unaudited consolidated balance sheets as assets or liabilities. The Company netted the fair value of derivative instruments by counterparty in the accompanying unaudited consolidated balance sheets where the right of offset exists. The Company determines the fair value of its derivative financial instruments utilizing pricing models for significantly similar instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties.

The Company's derivatives were not designated as hedges for accounting purposes for any of the periods presented. Accordingly, the changes in fair value are recognized in the unaudited consolidated statements of operations in the period of change. Realized and unrealized gains and losses on derivatives are included in cash flows from operating activities (see Note F).

5. Other current liabilities

Other current liabilities consist of the following components as of June 30, 2012 and December 31, 2011:

(in thousands)	June 30, 2012		December 31, 2011

Lease operating expense payable	$	6,663	$	5,297
Prepaid drilling liability		1,995		2,378
Production taxes payable		1,591		1,493
Deferred income taxes payable		1,506		—
Current portion of asset retirement obligations		393		506
Other accrued liabilities		3,350		5,245

Total other current liabilities	$	15,498	$	14,919

6. Property and equipment

The following table sets forth the Company's property and equipment as of June 30, 2012 and December 31, 2011:

(in thousands)	June 30, 2012		December 31, 2011

Proved oil and natural gas properties	$	2,551,524	$	2,083,015
Less accumulated depletion and impairment		993,312		884,533

Proved oil and natural gas properties, net		1,558,212		1,198,482
Unproved properties not being amortized		127,971		117,195
Pipeline and gas gathering assets		63,667		58,136
Less accumulated depreciation		7,900		6,394

Pipeline and gas gathering assets, net		55,767		51,742
Other fixed assets		21,840		16,948
Less accumulated depreciation and amortization		7,385		5,858

Other fixed assets, net		14,455		11,090

Total property and equipment, net	$	1,756,405	$	1,378,509

For the three months ended June 30, 2012 and 2011, depletion expense was $20.70 per barrel of oil equivalent ("BOE") and $20.11 per BOE, respectively. For the six months ended June 30, 2012 and 2011, depletion expense was $20.20 per BOE and $18.44 per BOE, respectively.

7. Deferred loan costs

Loan origination fees are stated at cost, net of amortization, which are amortized over the life of the respective debt agreements utilizing the effective interest and straight-line methods. The Company capitalized $10.5 million and $0.4 million of deferred loan costs in the three months ended June 30, 2012 and 2011, respectively, and $10.5 million and $10.6 million in the six months ended June 30, 2012 and 2011, respectively. The Company had total deferred loan costs of $31.7 million and $23.5 million, net of accumulated amortization of $6.7 million and $4.4 million, as of June 30, 2012 and December 31, 2011, respectively.

During the six months ended June 30, 2011, the Company wrote off approximately $3.2 million in deferred loan costs as a result of the retirement of debt and changes in the borrowing base of the Senior Secured Credit Facility (as defined in Note C). No deferred loan costs were written off in the six months ended June 30, 2012.

Future amortization expense of deferred loan costs at June 30, 2012 is as follows:

(in thousands)

Remaining 2012	$	2,534
2013		5,107
2014		5,164
2015		5,225
2016		3,969
Thereafter		9,667

Total	$	31,666

8. Asset retirement obligations

Asset retirement obligations associated with the retirement of tangible long-lived assets are recognized as a liability in the period in which they are incurred and become determinable. The associated asset retirement costs are part of the carrying amount of the long-lived asset. Subsequently, the asset retirement cost included in the carrying amount of the related long-lived asset is charged to expense through the depletion of the asset. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as corresponding accretion expense. See Note G for fair value disclosures related to the Company's asset retirement obligations.

The Company is obligated by contractual and regulatory requirements to remove certain pipeline and gas gathering assets and perform other remediation of the sites where such pipeline and gas gathering assets are located upon the retirement of those assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminate. The Company will record an asset retirement obligation for pipeline and gas gathering assets in the periods in which settlement dates are reasonably determinable.

The following reconciles the Company's asset retirement obligations liability as of June 30, 2012 and December 31, 2011:

(in thousands)	Six months ended June 30, 2012			Year ended December 31, 2011

Liability at beginning of period	$	13,074		$	8,278
Liabilities added due to acquisitions, drilling and other		2,270			1,519
Accretion expense		556			616
Liabilities settled upon plugging and abandonment		(24	)		(340	)
Revision of estimates		—			3,001

Liability at end of period	$	15,876		$	13,074

9. Fair value measurements

The carrying amounts reported in the unaudited consolidated balance sheets for cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, undistributed revenue and royalties, and other accrued liabilities approximate their fair values. See Note C for fair value disclosures related to the Company's debt obligations. The Company carries its derivative financial instruments at fair value. See Note F and Note G for details regarding the fair value of the Company's derivative financial instruments.

10. Compensation awards

For stock-based compensation awards, compensation expense is recognized in "General and adminstrative" in the Company's unaudited consolidated statements of operations over the awards' vesting periods based on their grant date fair value. The Company utilizes the closing stock price on the date of grant to determine the fair value of service vesting restricted stock awards and a Black-Scholes pricing model to determine the fair values of service vesting restricted stock option awards. See Note D for further discussion of the restricted stock awards and restricted stock option awards.

For performance unit awards issued to management with a combination of market and service vesting criteria, a Monte Carlo simulation prepared by an independent third party is utilized in order to determine the fair value of the awards at the date of grant and to re-measure the fair value at the end of each reporting period until settlement in accordance with GAAP. Due to the relatively short trading history for the Company's stock, the volatility criteria utilized in the Monte Carlo simulation is based on the volatilities of a group of peer companies that have been determined to be most representative of the Company's expected volatility. These awards are accounted for as liability awards as they will be settled in cash at the end of the requisite service period based on the achievement of certain performance criteria. The liability and related compensation expense for each period for these awards is recognized by dividing the fair value of the total liability by the requisite service period and recording the pro rata share for the period for which service has already been provided. Compensation expense for these awards amounted to $0.5 million and $1.0 million in the three and six months ended June 30, 2012, respectively, and is recognized in "General and administrative" in the Company's unaudited consolidated statements of operations and the corresponding liability is included in "Other noncurrent liabilities" in the June 30, 2012 unaudited consolidated balance sheet. As there are inherent uncertainties related to the factors and the Company's judgment in applying them to the fair value determinations, there is risk that the recorded performance unit compensation may not accurately reflect the amount ultimately earned by the member of management.

11. Impairment of long-lived assets

Impairment losses are recorded on property and equipment used in operations and other long-lived assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Impairment is measured based on the excess of the carrying amount over the fair value of the asset. During the three and six months ended June 30, 2011, the Company recorded a $0.04 million and a $0.2 million write-down of materials and supplies, respectively. Other than the aforementioned write-downs, for the three and six months ended June 30, 2012 and 2011, the Company did not record any additional impairment to property and equipment used in operations or other long-lived assets.

12. Environmental

The Company is subject to extensive federal, state and local environmental laws and regulations. These laws, which are often changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment or remediation is probable and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments is fixed and readily determinable. Management believes no materially significant liabilities of this nature existed at June 30, 2012 or December 31, 2011.

13. Business combinations

Acquisitions are accounted for under the acquisition method of accounting. Accordingly, the Company conducts assessments of net assets acquired and recognizes amounts for identifiable assets acquired and liabilities assumed at the estimated acquisition date fair values, while transaction and integration costs associated with the acquisitions are expensed as incurred.

14. Related party transactions

The following table summarizes the net oil and natural gas sales (oil and natural gas sales less production taxes) received from the Company's related party and is included in the unaudited consolidated statements of operations for the periods presented:

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Net oil and natural gas sales(1)	$	18,350	$	18,093	$	37,740	$	33,533

The following table summarizes the amounts included in oil and natural gas sales receivable in the unaudited consolidated balance sheets for the periods presented:

(in thousands)		June 30, 2012			December 31, 2011

Oil and natural gas sales receivable(1)		$	5,504		$	6,845

(1): The Company has a gas gathering and processing arrangement with affiliates of Targa Resources, Inc. ("Targa"). Warburg Pincus IX, a majority stockholder of Laredo Holdings, and other affiliates of Warburg Pincus LLC hold investment interests in Targa. One of Laredo Holdings' directors is on the board of directors of affiliates of Targa.

Debt

6 Months Ended

Jun. 30, 2012

Debt

Debt

C—Debt

1. Interest expense

The following amounts have been incurred and charged to interest expense for the three and six months ended June 30, 2012 and 2011:

	Three months ended June 30,					Six months ended June 30,

(in thousands)	2012			2011		2012			2011
Cash payments for interest	$	1,356		$	2,935	$	28,461		$	6,626
Amortization and write-off of deferred loan costs and other adjustments		1,240			4,105		2,321			5,155
Change in accrued interest		19,204			4,696		6,081			10,471

Interest costs incurred		21,800			11,736		36,863			22,252
Less capitalized interest		(126	)		—		(505	)		—

Total interest expense	$	21,674		$	11,736	$	36,358		$	22,252

The following table presents the weighted average interest rates and the weighted average outstanding debt balances for the three and six months ended June 30, 2012 and 2011:

	Three months ended June 30,										Six months ended June 30,

	2012					2011					2012					2011
(in thousands except for percentages)	Weighted average principal		Weighted average interest rate(3)			Weighted average principal		Weighted average interest rate(3)			Weighted average principal		Weighted average interest rate(3)			Weighted average principal		Weighted average interest rate(3)
Senior Secured Credit Facility	$	270,741		0.17	%	$	43,182		0.55	%	$	190,085		0.72	%	$	68,056		0.75	%
2019 Notes		550,000		2.37	%		350,000		2.37	%		550,000		4.73	%		350,000		4.19	%
2022 Notes		500,000		1.29	%		—		—			500,000		1.29	%		—		—
Term Loan(1)		—		—			—		—			—		—			100,000		0.31	%
Broad Oak Credit Facility(2)		—		—			64,541		2.87	%		—		—			122,904		3.07	%

(1): Laredo's Second Lien Term Loan Agreement was entered into on July 7, 2010 and was paid-in-full and terminated on January 20, 2011.
(2): The Broad Oak revolving credit facility was paid-in-full and terminated on July 1, 2011.
(3): Interest rates presented are annual rates which have been prorated to reflect the portion of the year for which they have been incurred.

2. 2022 Notes

On April 27, 2012, Laredo completed an offering of $500 million in aggregate principal amount of 7³/8% senior unsecured notes due 2022 (the "2022 Notes"). The 2022 Notes will mature on May 1, 2022 and bear an interest rate of 7³/8% per annum, payable semi-annually, in cash in arrears on May 1 and November 1 of each year, commencing November 1, 2012. The 2022 Notes are fully and unconditionally guaranteed, jointly and severally on a senior unsecured basis by Laredo Holdings and its subsidiaries, with the exception of Laredo (collectively, the "Guarantors"). The net proceeds from the 2022 Notes (i) were used to pay in full $280.0 million outstanding under Laredo's revolving Amended and Restated Credit Agreement (as amended, the "Senior Secured Credit Facility"), and (ii) will be used for general working capital purposes.

The 2022 Notes were issued under and are governed by an indenture and supplement thereto, each dated April 27, 2012 (collectively, the "2012 Indenture"), among Laredo, Wells Fargo Bank, National Association, as trustee, and the Guarantors. The 2012 Indenture contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of dividends or similar restricted payments, entering into transactions with affiliates and limitations on asset sales. Indebtedness under the 2022 Notes may be accelerated in certain circumstances upon an event of default as set forth in the 2012 Indenture.

Laredo will have the option to redeem the 2022 Notes, in whole or in part, at any time on or after May 1, 2017, at the redemption prices (expressed as percentages of principal amount) of 103.688% for the twelve-month period beginning on May 1, 2017, 102.458% for the twelve-month period beginning on May 1, 2018, 101.229% for the twelve-month period beginning on May 1, 2019 and 100.000% for the twelve-month period beginning on May 1, 2020 and at any time thereafter, together with any accrued and unpaid interest to, but not including, the date of redemption. In addition, before May 1, 2017, Laredo may redeem all or any part of the 2022 Notes at a redemption price equal to the sum of the principal amount thereof, plus a make whole premium at the redemption date, plus accrued and unpaid interest, if any, to the redemption date. Furthermore, before May 1, 2015, Laredo may, at any time or from time to time, redeem up to 35% of the aggregate principal amount of the 2022 Notes with the net proceeds of a public or private equity offering at a redemption price of 107.375% of the principal amount of the 2022 Notes, plus any accrued and unpaid interest to the date of redemption, if at least 65% of the aggregate principal amount of the 2022 Notes issued under the 2012 Indenture remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. Laredo may also be required to make an offer to purchase the 2022 Notes upon a change of control triggering event. In addition, if a change of control occurs prior to May 1, 2013, Laredo may redeem all, but not less than all, of the notes at a redemption price equal to 110% of the principal amount of the 2022 Notes redeemed, plus any accrued and unpaid interest, if any, to the date of redemption.

In connection with the issuance of the 2022 Notes, Laredo and the Guarantors entered into a registration rights agreement with the initial purchasers of the 2022 Notes on April 27, 2012, pursuant to which Laredo and the Guarantors filed with the Securities and Exchange Commission ("SEC") a registration statement that became effective with respect to an offer to exchange the 2022 Notes for substantially identical notes (other than with respect to restrictions on transfer or to any increase in annual interest rate) that are registered under the Securities Act of 1933, as amended (the "Securities Act"). The offer to exchange the 2022 Notes for substantially identical notes registered under the Securities Act commenced on July 2, 2012 and was consummated on August 1, 2012 with all notes exchanged.

3. 2019 Notes

On January 20, 2011, Laredo completed an offering of $350 million 9¹/2% Senior Notes due 2019 (the "January Notes") and on October 19, 2011, Laredo completed an offering of an additional $200 million 9¹/2% Senior Notes due 2019 (the "October 2011 Notes" and together with the January Notes, the "2019 Notes"). The 2019 Notes will mature on February 15, 2019 and bear an interest rate of 9.5% per annum payable semi-annually, in cash, in arrears on February 15 and August 15 of each year. The 2019 Notes are fully and unconditionally guaranteed, jointly and severally on a senior unsecured basis by the Guarantors.

In connection with the issuance of the 2019 Notes, Laredo and the Guarantors entered into registration rights agreements with the initial purchasers of the 2019 Notes, pursuant to which Laredo and the Guarantors filed with the SEC a registration statement that became effective with respect to an offer to exchange the 2019 Notes for substantially identical notes (other than with respect to restrictions on transfer or to any increase in annual interest rate) registered under the Securities Act. The offer to exchange the 2019 Notes for substantially identical notes registered under the Securities Act was consummated on January 13, 2012 with all notes exchanged.

4. Senior secured credit facility

The Senior Secured Credit Facility, which matures July 1, 2016, had a borrowing base of $785.0 million with no amounts outstanding at June 30, 2012. It contains both financial and non-financial covenants that the Company was in compliance with at June 30, 2012.

Additionally, the Senior Secured Credit Facility provides for the issuance of letters of credit, limited to the lesser of total capacity or $20.0 million. At June 30, 2012, Laredo had one letter of credit outstanding totaling $0.03 million under the Senior Secured Credit Facility.

5. Fair value of debt

The Company has not elected to account for its debt instruments at fair value. The following table presents the carrying amount and fair value of the Company's debt instruments at June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011

(in thousands)	Carrying value		Fair value		Carrying value		Fair value
2019 Notes(1)	$	551,863	$	616,000	$	551,961	$	585,750
2022 Notes		500,000		521,875		—		—
Senior Secured Credit Facility(2)		—		—		85,000		84,893

Total value of debt	$	1,051,863	$	1,137,875	$	636,961	$	670,643

(1): The carrying value of the 2019 Notes includes the October 2011 Notes unamortized bond premium of approximately $1.9 million and $2.0 million as of June 30, 2012 and December 31, 2011, respectively.
(2): No amounts were outstanding under the Senior Secured Credit Facility at June 30, 2012.

At June 30, 2012 and December 31, 2011, the fair value of the debt outstanding on the 2019 Notes and the 2022 Notes was determined using the June 30, 2012 and December 31, 2011 quoted market price (Level 1), respectively, and the fair value of the outstanding debt at December 31, 2011 on the Senior Secured Credit Facility was estimated utilizing pricing models for similar instruments (Level 2). See Note G for information about fair value hierarchy levels.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Stock-based compensation

6 Months Ended

Jun. 30, 2012

Stock-based compensation

Stock-based compensation

D—Stock-based compensation

In November 2011, the Board of Directors of Laredo Holdings and its stockholders approved a Long-Term Incentive Plan (the "LTIP"), which provides for the granting of incentive awards in the form of stock options, restricted stock awards and other awards. The LTIP provides for the issuance of 10.0 million shares.

The Company recognizes the fair value of stock-based payments to employees and directors as a charge against earnings. The Company recognizes stock-based payment expense over the requisite service period. Laredo Holdings' stock-based payment awards are accounted for as equity instruments. Stock-based compensation is included in "General and administrative" in the unaudited consolidated statements of operations.

Restricted stock awards

All restricted stock awards are treated as issued and outstanding in the accompanying unaudited consolidated financial statements. If an employee terminates employment prior to the restriction lapse date, the awarded shares are forfeited and cancelled and are no longer considered issued and outstanding. Restricted stock awards converted in the Corporate Reorganization vested 20% at the grant date and then vest 20% annually thereafter. The restricted stock awards granted under the LTIP vest 33%, 33% and 34% per year beginning on the first anniversary date of the grant. The following table reflects the outstanding restricted stock awards for the six months ended June 30, 2012:

(in thousands, except for weighted average grant date fair values)			Weighted average grant date fair value

Outstanding at December 31, 2011	911		$	1.14
Granted	777		$	23.50
Forfeited	(98	)	$	14.93
Vested	(233	)	$	0.44

Outstanding at June 30, 2012	1,357		$	13.02

Restricted stock option awards

Restricted stock options granted under the LTIP vest and are exercisable in four equal installments on each of the first four anniversaries of the date of the grant. The following table reflects the stock option award activity for the six months ended June 30, 2012:

(in thousands, except for weighted average exercise price and contractual term)			Weighted average exercise price (per option)

Outstanding at December 31, 2011	—		$	—	—
Granted	603		$	24.11	10
Forfeited	(54	)	$	24.11	10

Outstanding at June 30, 2012	549		$	24.11	10

Vested and exercisable at end of period	—

The Company used the Black-Scholes option pricing model to determine the fair value of restricted stock options and is recognizing the associated expense on a straight-line basis over the four year requisite service period of the awards. Determining the fair value of equity-based awards requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, and the associated volatility. There were no restricted stock options granted during the three months ended June 30, 2012.

The assumptions used to estimate the fair value of restricted stock options granted on February 3, 2012 are as follows:


Risk-free interest rate(1)		1.07	%
Expected option life(2)		6.01
Expected volatility(3)		60.18	%
Fair value per option	$	13.36

(1): U.S. Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, matching the treasury yield terms to the expected life of the option.
(2): As the Company has no historical exercise history, expected option life assumptions were developed using the simplified method in accordance with GAAP.
(3): The Company utilized a peer historical look-back, weighted with the Company's own volatility since the IPO, to develop the expected volatility.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Income taxes

6 Months Ended

Jun. 30, 2012

Income taxes

Income taxes

E—Income taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The Company is subject to corporate income taxes and the Texas margin tax. Income tax expense for the three and six months ended June 30, 2012 and 2011 consisted of the following:

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Current taxes
Federal	$	—	$	—	$	—	$	—
State		—		—		—		—
Deferred taxes
Federal		17,055		22,254		30,847		24,528
State		369		886		1,334		1,209

Income tax expense	$	17,424	$	23,140	$	32,181	$	25,737

Income tax expense differed from amounts computed by applying the federal income tax rate of 34% to pre-tax income from operations as a result of the following:

	Three months ended June 30,						Six months ended June 30,

(in thousands)	2012			2011			2012			2011
Income tax expense computed by applying the statutory rate	$	16,456		$	21,832		$	30,393		$	24,303
State income tax, net of federal tax benefit and increase in valuation allowance		1,395			1,478			1,900			1,189
Income from non-taxable entity		—			(6	)		—			(16	)
Non-deductible compensation		275			187			655			287
Change in valuation allowance		1			193			2			2
Other items		(703	)		(544	)		(769	)		(28	)

Income tax expense	$	17,424		$	23,140		$	32,181		$	25,737

Significant components of the Company's deferred tax assets as of June 30, 2012 and December 31, 2011 are as follows:

(in thousands)	June 30, 2012			December 31, 2011

Derivative financial instruments	$	(3,526	)	$	3,551
Oil and natural gas properties and equipment		(119,354	)		(87,138	)
Net operating loss carry-forward		186,222			180,740
Other		705			(926	)

		64,047			96,227
Valuation allowance		(650	)		(649	)

Net deferred tax asset	$	63,397		$	95,578

Net deferred tax assets and liabilities were classified in the unaudited consolidated balance sheets as follows as of June 30, 2012 and December 31, 2011:

(in thousands)	June 30, 2012		December 31, 2011

Deferred tax asset	$	64,903	$	95,578
Deferred tax liability		1,506		—

Net deferred tax assets	$	63,397	$	95,578

The Company had federal net operating loss carry-forwards totaling approximately $527.3 million and state net operating loss carry-forwards totaling approximately $180.9 million at June 30, 2012. These carry-forwards begin expiring in 2026. The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. At June 30, 2012, a $0.6 million valuation allowance was recorded against the state of Louisiana deferred tax asset and a $0.03 million valuation allowance was recorded against the Company's charitable contribution carry-forward. The Company believes the federal and state of Oklahoma net operating loss carry-forwards are fully realizable. The Company considered all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance was needed. Such consideration included estimated future projected earnings based on existing reserves and projected future cash flows from its oil and natural gas reserves (including the timing of those cash flows), the reversal of deferred tax liabilities recorded at June 30, 2012 and the Company's ability to capitalize intangible drilling costs, rather than expensing these costs, in order to prevent an operating loss carry-forward from expiring unused.

The Company's income tax returns for the years 2008 through 2011 remain open and subject to examination by federal tax authorities and/or the tax authorities in Oklahoma, Texas and Louisiana which are the jurisdictions where the Company has or had operations. Additionally, the statute of limitations for examination of federal net operating loss carryovers typically does not begin to run until the year the attribute is utilized in a tax return. In evaluating its current tax positions in order to identify any material uncertain tax positions, the Company developed a policy in identifying uncertain tax positions that considers support for each tax position, industry standards, tax return disclosures and schedules, and the significance of each position. The Company had no material adjustments to its unrecognized tax benefits during the six months ended June 30, 2012.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Derivative financial instruments

6 Months Ended

Jun. 30, 2012

Derivative financial instruments

Derivative financial instruments

F—Derivative financial instruments

1. Commodity derivatives

The Company engages in derivative transactions such as collars, swaps, puts and basis swaps to hedge price risks due to unfavorable changes in oil and natural gas prices related to its oil and natural gas production. As of June 30, 2012, the Company had 54 open derivative contracts with financial institutions, none of which were designated as hedges for accounting purposes, which extend from July 2012 to December 2015. The contracts are recorded at fair value on the balance sheet and any realized and unrealized gains and losses are recognized in current year earnings.

Each collar transaction has an established price floor and ceiling. When the settlement price is below the price floor established by these collars, the Company receives an amount from its counterparty equal to the difference between the settlement price and the price floor multiplied by the hedged contract volume. When the settlement price is above the price ceiling established by these collars, the Company pays its counterparty an amount equal to the difference between the settlement price and the price ceiling multiplied by the hedged contract volume.

Each swap transaction has an established fixed price. When the settlement price is above the fixed price, the Company pays its counterparty an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. When the settlement price is below the fixed price, the counterparty pays the Company an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume.

Each put transaction has an established floor price. The Company pays the counterparty a premium in order to enter into the put transaction. When the settlement price is below the floor price, the counterparty pays the Company an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. When the settlement price is above the floor price, the put option expires.

Each basis swap transaction has an established fixed differential between the NYMEX gas futures and West Texas WAHA ("WAHA") index gas price. When the NYMEX futures settlement price less the fixed WAHA differential is greater than the actual WAHA price, the difference multiplied by the hedged contract volume is paid to the Company by the counterparty. When the difference between the NYMEX futures settlement price less the fixed WAHA differential is less than the actual WAHA price, the Company pays the counterparty an amount equal to the difference multiplied by the hedged contract volume.

During the six months ended June 30, 2012, the Company entered into additional commodity contracts to hedge a portion of its estimated future production. The following table summarizes information about these additional commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.

		Swap price		Floor price		Ceiling price		Contract period

Oil (volumes in Bbls):
Price collar	270,000		—	$	90.00	$	126.50	April 2012 - December 2012
Price collar	240,000		—	$	90.00	$	118.35	January 2013 - December 2013
Price collar	198,000		—	$	70.00	$	140.00	January 2014 - December 2014
Put	360,000		—	$	75.00		—	January 2014 - December 2014
Price collar	252,000		—	$	75.00	$	135.00	January 2015 - December 2015
Put	360,000		—	$	75.00		—	January 2015 - December 2015
Put	180,000		—	$	75.00		—	January 2014 - December 2014
Put	96,000		—	$	75.00		—	January 2015 - December 2015
Natural gas (volumes in MMBtu):
Swap	700,000	$	2.72		—		—	April 2012 - October 2012
Price collar	700,000		—	$	3.25	$	3.90	April 2013 - October 2013

The following table summarizes open positions as of June 30, 2012, and represents, as of such date, derivatives in place through December 31, 2015, on annual production volumes:

	Remaining year 2012		Year 2013		Year 2014		Year 2015

Oil Positions:
Puts:
Hedged volume (Bbls)		336,000		1,080,000		540,000		456,000
Weighted average price ($/Bbl)	$	65.79	$	65.00	$	75.00	$	75.00
Swaps:
Hedged volume (Bbls)		366,000		600,000		—		—
Weighted average price ($/Bbl)	$	93.52	$	96.32	$	—	$	—
Collars:
Hedged volume (Bbls)		603,000		768,000		726,000		252,000
Weighted average floor price ($/Bbl)	$	79.50	$	79.38	$	75.45	$	75.00
Weighted average ceiling price ($/Bbl)	$	118.09	$	121.67	$	129.09	$	135.00
Natural Gas Positions:
Puts:
Hedged volume (MMBtu)		2,160,000		6,600,000		—		—
Weighted average price ($/MMBtu)	$	5.38	$	4.00	$	—	$	—
Swaps:
Hedged volume (MMBtu)		1,240,000		—		—		—
Weighted average price ($/MMBtu)	$	5.04	$	—	$	—	$	—
Collars:
Hedged volume (MMBtu)		3,900,000		7,300,000		6,960,000		—
Weighted average floor price ($/MMBtu)	$	4.12	$	3.93	$	4.00	$	—
Weighted average ceiling price ($/MMBtu)	$	5.79	$	6.75	$	7.03	$	—
Basis swaps(1):
Hedged volume (MMBtu)		1,440,000		1,200,000		—		—
Weighted average price ($/MMBtu)	$	0.31	$	0.33	$	—	$	—

(1): The cash settlement price of the Company's basis swaps is calculated on the difference between the Company's natural gas futures contracts that settle on the NYMEX index and the NYMEX index price at the time of settlement. At June 30, 2012, the Company had 200,000 MMBtu for the remainder of 2012 and 500,000 MMBtu for 2013 in basis swaps that did not have corresponding volumes hedged with a NYMEX index price.

2. Interest rate derivatives

The Company is exposed to market risk for changes in interest rates related to its Senior Secured Credit Facility. Interest rate derivative agreements are used to manage a portion of the exposure related to changing interest rates by converting floating-rate debt to fixed-rate debt. If LIBOR is lower than the fixed rate in the contract, the Company is required to pay the counterparties the difference, and conversely, the counterparties are required to pay the Company if LIBOR is higher than the fixed rate in the contract. The Company did not designate the interest rate derivatives as cash flow hedges; therefore, the changes in fair value of these instruments are recorded in current earnings.

The following presents the settlement terms of the interest rate derivatives at June 30, 2012:

(in thousands except rate data)	Year 2012			Year 2013			Expiration date

Notional amount	$	50,000		$	50,000
Fixed rate		1.11	%		1.11	%	September 13, 2013
Notional amount	$	50,000		$	50,000
Cap rate		3.00	%		3.00	%	September 13, 2013

Total	$	100,000		$	100,000

3. Balance sheet presentation

The Company's oil and natural gas commodity derivatives and interest rate derivatives are presented on a net basis in "Derivative financial instruments" in the unaudited consolidated balance sheets.

The following summarizes the fair value of derivatives outstanding on a gross basis as of:

(in thousands)	June 30, 2012		December 31, 2011

Assets:
Commodity derivatives:
Oil derivatives	$	33,033	$	16,026
Natural gas derivatives		28,980		34,019
Interest rate derivatives		—		11

	$	62,013	$	50,056

Liabilities:
Commodity derivatives:
Oil derivatives(1)	$	23,691	$	28,044
Natural gas derivatives(2)		5,231		6,832
Interest rate derivatives		365		1,991

	$	29,287	$	36,867

(1): The oil derivatives fair value includes a deferred premium liability of $19.7 million and $13.4 million at June 30, 2012 and December 31, 2011, respectively.
(2): The natural gas derivatives fair value includes a deferred premium liability of $3.9 million and $5.4 million at June 30, 2012 and December 31, 2011, respectively.

By using derivative instruments to economically hedge exposures to changes in commodity prices and interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company's counterparties are participants in the Senior Secured Credit Facility which is secured by the Company's oil and natural gas reserves; therefore, the Company is not required to post any collateral. The Company does not require collateral from its counterparties. The Company minimizes the credit risk in derivative instruments by: (i) limiting its exposure to any single counterparty; (ii) entering into derivative instruments only with counterparties that are also lenders in the Senior Secured Credit Facility and meet the Company's minimum credit quality standard, or have a guarantee from an affiliate that meets the Company's minimum credit quality standard; and (iii) monitoring the creditworthiness of the Company's counterparties on an ongoing basis. In accordance with the Company's standard practice, its commodity and interest rate derivatives are subject to counterparty netting under agreements governing such derivatives and, therefore, the risk of such loss is somewhat mitigated at June 30, 2012.

4. Gain (loss) on derivatives

Gains and losses on derivatives are reported on the unaudited consolidated statements of operations in the respective "Realized and unrealized gain (loss)" amounts. Realized gains (losses) represent amounts related to the settlement of derivative instruments, and for commodity derivatives, are aligned with the underlying production. Unrealized gains (losses) represent the change in fair value of the derivative instruments and are non-cash items.

The following represents the Company's reported gains and losses on derivative instruments for the three and six months ended June 30, 2012 and 2011:

	Three months ended June 30,						Six months ended June 30,

(in thousands)	2012			2011			2012			2011
Realized gains (losses):
Commodity derivatives	$	9,115		$	(1,584	)	$	13,823		$	(931	)
Interest rate derivatives		(835	)		(1,255	)		(1,938	)		(2,556	)

		8,280			(2,839	)		11,885			(3,487	)
Unrealized gains (losses):
Commodity derivatives		19,428			20,033			15,314			(8,654	)
Interest rate derivatives		835			279			1,615			1,462

		20,263			20,312			16,929			(7,192	)
Total gains (losses):
Commodity derivatives		28,543			18,449			29,137			(9,585	)
Interest rate derivatives		—			(976	)		(323	)		(1,094	)

	$	28,543		$	17,473		$	28,814		$	(10,679	)

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

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-Name Accounting Standards Codification
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Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Fair value measurements

6 Months Ended

Jun. 30, 2012

Fair value measurements

Fair value measurements

G—Fair value measurements

The Company accounts for its oil and natural gas commodity and interest rate derivatives at fair value. The fair value of derivative financial instruments is determined utilizing pricing models for similar instruments. The models use a variety of techniques to arrive at fair value, including quotes and pricing analysis. Inputs to the pricing models include publicly available prices and forward curves generated from a compilation of data gathered from third parties.

The Company has categorized its assets and liabilities measured at fair value, based on the priority of inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

Assets and liabilities recorded at fair value on the unaudited consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:


Level 1—		Assets and liabilities recorded at fair value for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2—		Assets and liabilities recorded at fair value for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Substantially all of these inputs are observable in the marketplace throughout the full term of the price risk management instrument, can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace.
Level 3—		Assets and liabilities recorded at fair value for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs that are not corroborated by market data. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability.

When the inputs used to measure fair value fall within different levels of the hierarchy in a liquid environment, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company conducts a review of fair value hierarchy classifications on an annual basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Transfers between fair value hierarchy levels are recognized and reported in the period in which the transfer occurred. No transfers between fair value hierarchy levels occurred during the three and six months ended June 30, 2012 and 2011.

Fair value measurement on a recurring basis

The following presents the Company's fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at June 30, 2012 and December 31, 2011.

(in thousands)	Level 1		Level 2			Level 3			Total fair value

As of June 30, 2012:
Commodity derivatives	$	—	$	56,643		$	—		$	56,643
Deferred premiums		—		—			(23,552	)		(23,552	)
Interest rate derivatives		—		(365	)		—			(365	)

Total	$	—	$	56,278		$	(23,552	)	$	32,726

(in thousands)	Level 1		Level 2			Level 3			Total fair value

As of December 31, 2011:
Commodity derivatives	$	—	$	34,037		$	—		$	34,037
Deferred premiums		—		—			(18,868	)		(18,868	)
Interest rate derivatives		—		(1,980	)		—			(1,980	)

Total	$	—	$	32,057		$	(18,868	)	$	13,189

These items are included in "Derivative financial instruments" on the unaudited consolidated balance sheets. Significant Level 2 assumptions associated with the calculation of discounted cash flows used in the "mark-to-market" analysis of commodity derivatives include the NYMEX natural gas and crude oil prices, appropriate risk adjusted discount rates and other relevant data. Significant Level 2 assumptions associated with the calculation of discounted cash flows used in the "mark-to-market" analysis of interest rate swaps include the interest rate curves, appropriate risk adjusted discount rates and other relevant data.

The Company's deferred premiums associated with its commodity derivative contracts are categorized in Level 3, as the Company utilizes a net present value calculation to determine the valuation. They are considered to be measured on a recurring basis as the derivative contracts they derive from are measured on a recurring basis. As commodity derivative contracts containing deferred premiums are entered into, the Company discounts the associated deferred premium to its net present value at the contract trade date, using the Senior Secured Credit Facility rate at the trade date (historical input rates range from 2.06% to 3.56%) and then amortizing the change in net present value into interest expense over the period from trade until the final settlement date at the end of the contract. After this initial valuation the net present value of each deferred premium is not adjusted, therefore significant increases (decreases) in the Senior Secured Credit Facility rate would result in a significantly lower (higher) fair value measurement for each new deal containing a deferred premium entered into; however the valuation for the deals already recorded would remain unaffected. While the Company believes the sources utilized to arrive at the fair value estimates are reliable, different sources or methods could have yielded different fair value estimates; therefore on a quarterly basis, the valuation is compared to counterparty valuations and third party valuation of the deferred premiums for reasonableness. A summary of the changes in assets classified as Level 3 measurements for the three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30, 2012					Six months ended June 30, 2012

(in thousands)	Derivative option contracts		Deferred premiums			Derivative option contracts		Deferred premiums
Balance of Level 3 at beginning of period(1)	$	—	$	(23,061	)	$	—	$	(18,868	)
Realized and unrealized gains included in earnings		—		—			—		—
Amortization of deferred premiums		—		(169	)		—		(319	)
Total purchases and settlements:
Purchases		—		(1,917	)		—		(7,292	)
Settlements		—		1,595			—		2,927

Balance of Level 3 at end of period	$	—	$	(23,552	)	$	—	$	(23,552	)

Change in unrealized losses attributed to earnings relating to derivatives still held at end of period	$	—	$	—		$	—	$	—

	Three months ended June 30, 2011					Six months ended June 30, 2011

(in thousands)	Derivative option contracts		Deferred premiums			Derivative option contracts			Deferred premiums
Balance of Level 3 at beginning of period	$	12,856	$	(12,581	)	$	20,026		$	(12,495	)
Realized and unrealized gains (losses) included in earnings		521		—			(6,588	)		—
Amortization of deferred premiums		—		(109	)		—			(216	)
Total purchases and settlements:
Purchases		561		—			500			—
Settlements		—		20			—			41

Balance of Level 3 at end of period	$	13,938	$	(12,670	)	$	13,938		$	(12,670	)

Change in unrealized gains attributed to earnings relating to derivatives still held at end of period	$	10,638	$	—		$	1,970		$	—

(1): The Company transferred the commodity derivative option contracts out of Level 3 during the year ended December 31, 2011 due to the Company's ability to utilize transparent forward price curves and volatilities published and available through independent third party vendors. As a result, the Company transferred positions from Level 3 to Level 2 as the significant inputs used to calculate the fair value are all observable.

Fair value measurement on a nonrecurring basis

The Company accounts for additions to its asset retirement obligation (see Note B.8) and the impairment of long-lived assets (see Note B.11), if any, at fair value on a nonrecurring basis in accordance with GAAP. For purposes of fair value measurement, it was determined that the impairment of long-lived assets and the additions to the asset retirement obligation are classified as Level 3 based on the use of internally developed cash flow models. No impairments of long-lived assets were recorded in the six months ended June 30, 2012.

Inherent in the fair value calculation of asset retirement obligations are numerous assumptions and judgments including, in addition to those noted above, the ultimate settlement of these amounts, the ultimate timing of such settlement, and changes in legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing asset retirement obligation liability, a corresponding adjustment will be made to the asset balance.

Asset retirement obligations. The accounting policies for asset retirement obligations are discussed in Note B.8, including a reconciliation of the Company's asset retirement obligation. The fair value of additions to the asset retirement obligation liability is measured using valuation techniques consistent with the income approach, which converts future cash flows to a single discounted amount. Significant inputs to the valuation include: (i) estimated plug and abandonment cost per well based on Company experience; (ii) estimated remaining life per well based on the reserve life per well; (iii) future inflation factors; and (iv) the Company's average credit adjusted risk free rate.

Impairment of oil and natural gas properties. The accounting policies for impairment of oil and natural gas properties are discussed in the audited consolidated financial statements and notes thereto included in the 2011 Annual Report. Significant inputs included in the calculation of discounted cash flows used in the impairment analysis include the Company's estimate of operating and development costs, anticipated production of proved reserves and other relevant data.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
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-Paragraph 15B
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Credit risk

6 Months Ended

Jun. 30, 2012

Credit risk

Credit risk

H—Credit risk

The Company's oil and natural gas sales are to a variety of purchasers, including intrastate and interstate pipelines or their marketing affiliates and independent marketing companies. The Company's joint operations accounts receivable are from a number of oil and natural gas companies, partnerships, individuals and others who own interests in the properties operated by the Company. Management believes that any credit risk imposed by a concentration in the oil and natural gas industry is offset by the creditworthiness of the Company's customer base and industry partners. The Company routinely assesses the recoverability of all material trade and other receivables to determine collectability.

The Company uses derivative instruments to hedge its exposure to oil and natural gas price volatility and its exposure to interest rate risk associated with the Senior Secured Credit Facility. These transactions expose the Company to potential credit risk from its counterparties. In accordance with the Company's standard practice, its derivative instruments are subject to counterparty netting under agreements governing such derivatives and therefore, the credit risk associated with its derivative counterparties is somewhat mitigated. See Note F for additional information regarding the Company's derivative instruments.

- Definition

The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 275
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6327-108592

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 20
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13531-108611

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 20
-URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6404-108592

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-Name Accounting Standards Codification
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-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 94-6
-Paragraph 21, 22, 24
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Commitments and contingencies

6 Months Ended

Jun. 30, 2012

Commitments and contingencies

Commitments and contingencies

I—Commitments and contingencies

1. Lease commitments

The Company leases equipment and office space under operating leases expiring on various dates through 2016. Minimum annual lease commitments at June 30, 2012 and for the calendar years following are as follows:

(in thousands)

Remaining 2012	$	720
2013		1,448
2014		1,102
2015		731
2016		282

Total	$	4,283

The following table presents rent expense for the three and six months ended June 30, 2012 and 2011.

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Rent expense	$	295	$	307	$	602	$	590

The Company's office space lease agreements contain scheduled escalation in lease payments during the term of the lease. In accordance with GAAP, the Company records rent expense on a straight-line basis and a deferred lease liability for the difference between the straight-line amount and the actual amounts of the lease payments.

2. Litigation

The Company may be involved in legal proceedings or is subject to industry rulings that could bring rise to claims in the ordinary course of business. The Company has concluded that the likelihood is remote that the ultimate resolution of any pending litigation or pending claims will be material or have a material adverse effect on the Company's business, financial position, results of operations or liquidity.

3. Drilling contracts

The Company has committed to several short-term drilling contracts with various third parties in order to complete its various drilling projects. The contracts contain an early termination clause that requires the Company to pay significant penalties to the third party should the Company cease drilling efforts. These penalties could significantly impact the Company's financial statements upon contract termination. These commitments are not recorded in the accompanying unaudited consolidated balance sheets. Future commitments as of June 30, 2012 are $35.8 million. Management does not anticipate canceling any drilling contracts or discontinuing drilling efforts in 2012.

4. Federal and state regulations

Oil and natural gas exploration, production and related operations are subject to extensive federal and state laws, rules and regulations. Failure to comply with these laws, rules and regulations can result in substantial penalties. The regulatory burden on the oil and natural gas industry increases the cost of doing business and affects profitability. The Company believes that it is in compliance with currently applicable state and federal regulations and these regulations will not have a material adverse impact on the financial position or results of operations of the Company. Because these rules and regulations are frequently amended or reinterpreted, the Company is unable to predict the future cost or impact of complying with these regulations.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

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-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Defined contribution plans

6 Months Ended

Jun. 30, 2012

Defined contribution plans

Defined contribution plans

J—Defined contribution plans

The Company sponsors a 401(k) defined contribution plan for the benefit of substantially all employees at the date of hire. The plan allows eligible employees to make tax-deferred contributions up to 100% of their annual compensation, not to exceed annual limits established by the federal government. The Company makes matching contributions of up to 6% of an employee's compensation and may make additional discretionary contributions for eligible employees. Employees are 100% vested in the employer contributions upon receipt.

The following table presents total contributions to the plans for the three and six months ended June 30, 2012 and 2011.

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Contributions	$	325	$	326	$	642	$	855

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Implementation Guide (Q and A)
-Number FAS88
-Paragraph 63
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 106
-Paragraph 518
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-2
-Paragraph 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 87
-Paragraph 264
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph q
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph h
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 8
-Subparagraph m
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5, 6, 7, 8
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 158
-Paragraph 7, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS106-2
-Paragraph 20, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 30
-Paragraph 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Net income per share

6 Months Ended

Jun. 30, 2012

Net income per share

Net income per share

K—Net income per share

Basic net income per share is computed by dividing net income by the weighted-average number of shares outstanding for the period. Diluted net income per share reflects the potential dilution of non-vested restricted stock awards. The effect of the Company's outstanding options to purchase 549,446 shares of common stock at $24.11 per share were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2012 because the exercise price of those options was greater than the average market price during the period, and therefore the inclusion of these outstanding options would have been anti-dilutive. The following is the calculation of basic and diluted weighted average shares outstanding and net income per share for the three and six months ended June 30, 2012:

(in thousands, except for per share data)	Three months ended June 30, 2012		Six months ended June 30, 2012

Income (numerator):
Net income—basic and diluted	$	30,975	$	57,210
Weighted average shares (denominator):
Weighted average shares—basic		126,921		126,862
Non-vested restricted stock		1,301		1,239

Weighted average shares—diluted		128,222		128,101

Net income per share:
Basic	$	0.24	$	0.45
Diluted	$	0.24	$	0.45

Recently issued accounting standards

6 Months Ended

Jun. 30, 2012

Recently issued accounting standards

Recently issued accounting standards

L—Recently issued accounting standards

In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2011-11, Disclosures about Offsetting Assets and Liabilities, to improve reporting and transparency of offsetting (netting) assets and liabilities and the related effects on the financial statements. This ASU is effective for fiscal years and interim periods within those years beginning on or after January 1, 2013. The Company does not expect the adoption of this ASU to have a material effect on its consolidated financial statements.

- Definition

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6510796

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22583-107794

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=6958853&loc=d3e46468-122699

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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6503790

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
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-Name Accounting Standards Codification
-Topic 270
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-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e765-108305

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 01
-Paragraph b
-Subparagraph 6
-Article 10

+ Details

Subsidiary guarantees

6 Months Ended

Jun. 30, 2012

Subsidiary guarantees

Subsidiary guarantees

M—Subsidiary guarantees

Laredo Holdings and all of Laredo's wholly-owned subsidiaries (Laredo Gas, Laredo Texas and Laredo Dallas, collectively, the "Subsidiary Guarantors") have fully and unconditionally guaranteed the 2019 Notes, the 2022 Notes and the Senior Secured Credit Facility. In accordance with practices accepted by the SEC, Laredo has prepared condensed consolidating financial statements in order to quantify the assets, results of operations and cash flows of such subsidiaries as subsidiary guarantors. The following unaudited condensed consolidating balance sheet as of June 30, 2012 and audited condensed consolidating balance sheet as of December 31, 2011, unaudited condensed consolidating statements of operations for the three and six months ended June 30, 2012 and 2011, and unaudited condensed consolidating statements of cash flows for the six months ended June 30, 2012 and 2011, present financial information for Laredo Holdings as the parent of Laredo on a stand-alone basis (carrying any investments in subsidiaries under the equity method), financial information for Laredo on a stand-alone basis (carrying any investment in subsidiaries under the equity method), financial information for the Subsidiary Guarantors on a stand-alone basis (carrying any investment in subsidiaries under the equity method), and the consolidation and elimination entries necessary to arrive at the information for the Company on a condensed consolidated basis. All deferred income taxes are recorded on Laredo's statements of financial position, as Laredo's subsidiaries are flow-through entities for income tax purposes. Prior to the Broad Oak acquisition on July 1, 2011, both Laredo and Laredo Dallas were separate taxable entities and deferred income taxes for the Company are recorded separately. The Subsidiary Guarantors are not restricted from making distributions to Laredo.

Condensed consolidating balance sheet
June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings		Laredo		Subsidiary Guarantors		Intercompany eliminations			Consolidated company

Accounts receivable	$	—	$	54,616	$	17,216	$	—		$	71,832
Other current assets		—		172,615		199		—			172,814
Total oil and natural gas properties, net		—		999,604		686,579		—			1,686,183
Total pipeline and gas gathering assets, net		—		—		55,767		—			55,767
Total other fixed assets, net		—		11,686		2,769		—			14,455
Investment in subsidiaries		942,804		619,841		—		(1,562,645	)		—
Total other long-term assets		—		114,887		—		—			114,887

Total assets	$	942,804	$	1,973,249	$	762,530	$	(1,562,645	)	$	2,115,938

Accounts payable	$	1	$	29,730	$	19,580	$	—		$	49,311
Other current liabilities		—		126,691		48,024		—			174,715
Other long-term liabilities		—		9,443		8,548		—			17,991
Long-term debt		—		1,051,863		—		—			1,051,863
Stockholders' equity		942,803		755,522		686,378		(1,562,645	)		822,058

Total liabilities and stockholders' equity	$	942,804	$	1,973,249	$	762,530	$	(1,562,645	)	$	2,115,938

Condensed consolidating balance sheet
December 31, 2011
(audited)

(in thousands)	Laredo Holdings		Laredo		Subsidiary Guarantors		Intercompany eliminations			Consolidated company

Accounts receivable	$	—	$	53,006	$	21,129	$	—		$	74,135
Other current assets		54,921		20,599		204		(26,921	)		48,803
Total oil and natural gas properties, net		—		780,152		535,525		—			1,315,677
Total pipeline and gas gathering assets, net		—		—		51,742		—			51,742
Total other fixed assets, net		—		10,321		769		—			11,090
Investment in subsidiaries		888,043		554,901		—		(1,442,944	)		—
Total other long-term assets		—		126,205		—		—			126,205

Total assets	$	942,964	$	1,545,184	$	609,369	$	(1,469,865	)	$	1,627,652

Accounts payable	$	1	$	58,729	$	14,198	$	(26,921	)	$	46,007
Other current liabilities		—		130,990		37,364		—			168,354
Other long-term liabilities		—		8,779		7,538		—			16,317
Long-term debt		—		636,961		—		—			636,961
Stockholders' equity		942,963		709,725		550,269		(1,442,944	)		760,013

Total liabilities and stockholders' equity	$	942,964	$	1,545,184	$	609,369	$	(1,469,865	)	$	1,627,652

Condensed consolidating statement of operations
For the three months ended June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—		$	76,692		$	66,570		$	(2,638	)	$	140,624
Total operating costs and expenses		140			64,951			36,648			(2,638	)		99,101

Income (loss) from operations		(140	)		11,741			29,922			—			41,523
Interest income (expense), net		—			(21,659	)		—			—			(21,659	)
Other, net		—			28,543			(8	)		—			28,535

Income (loss) from operations before income tax		(140	)		18,625			29,914			—			48,399
Income tax expense		—			(17,424	)		—			—			(17,424	)

Net income (loss)	$	(140	)	$	1,201		$	29,914		$	—		$	30,975

Condensed consolidating statement of operations
For the three months ended June 30, 2011
(unaudited)

(in thousands)	Laredo Holdings		Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—	$	59,958		$	73,489		$	(1,720	)	$	131,727
Total operating costs and expenses		—		40,320			34,656			(1,720	)		73,256

Income from operations		—		19,638			38,833			—			58,471
Interest income (expense), net		19		(9,203	)		(2,530	)		—			(11,714	)
Other, net		—		3,113			14,342			—			17,455

Income from operations before income tax		19		13,548			50,645			—			64,212
Income tax expense		—		(5,323	)		(17,817	)		—			(23,140	)

Net income	$	19	$	8,225		$	32,828		$	—		$	41,072

Condensed consolidating statement of operations
For the six months ended June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—		$	152,458		$	143,403		$	(4,889	)	$	290,972
Total operating costs and expenses		159			126,564			72,226			(4,889	)		194,060

Income (loss) from operations		(159	)		25,894			71,177			—			96,912
Interest income (expense), net		—			(36,327	)		—			—			(36,327	)
Other, net		—			28,814			(8	)		—			28,806

Income (loss) from operations before income tax		(159	)		18,381			71,169			—			89,391
Income tax expense		—			(32,181	)		—			—			(32,181	)

Net income (loss)	$	(159	)	$	(13,800	)	$	71,169		$	—		$	57,210

Condensed consolidating statement of operations
For the six months ended June 30, 2011
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—		$	102,482		$	139,650		$	(3,294	)	$	238,838
Total operating costs and expenses		7			71,859			62,633			(3,294	)		131,205

Income (loss) from operations		(7	)		30,623			77,017			—			107,633
Interest income (expense), net		55			(17,152	)		(5,097	)		—			(22,194	)
Other, net		—			(5,696	)		(8,264	)		—			(13,960	)

Income from operations before income tax		48			7,775			63,656			—			71,479
Income tax expense		—			(4,336	)		(21,401	)		—			(25,737	)

Net income	$	48		$	3,439		$	42,255		$	—		$	45,742

Condensed consolidating statement of cash flows
For the six months ended June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Net cash flows provided by (used in) operating activities	$	(160	)	$	49,843		$	123,186		$	26,921		$	199,790
Net cash flows provided by used in investing activities		(54,761	)		(307,882	)		(123,188	)		—			(485,831	)
Net cash flows provided by financing activities		—			404,524			—			—			404,524

Net increase (decrease) in cash and cash equivalents		(54,921	)		146,485			(2	)		26,921			118,483
Cash and cash equivalents at beginning of period		54,921			—			2			(26,921	)		28,002

Cash and cash equivalents at end of period	$	—		$	146,485		$	—		$	—		$	146,485

Condensed consolidating statement of cash flows
For the six months ended June 30, 2011
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Net cash flows provided by operating activities	$	47		$	65,580		$	102,583		$	(6,152	)	$	162,058
Net cash flows used in investing activities		(7,318	)		(203,452	)		(148,679	)		—			(359,449	)
Net cash flows provided by financing activities		—			137,872			50,336			—			188,208

Net increase (decrease) in cash and cash equivalents		(7,271	)		—			4,240			(6,152	)		(9,183	)
Cash and cash equivalents at beginning of period		38,652			—			6,489			(13,906	)		31,235

Cash and cash equivalents at end of period	$	31,381		$	—		$	10,729		$	(20,058	)	$	22,052

Subsequent events

6 Months Ended

Jun. 30, 2012

Subsequent events

Subsequent events

N—Subsequent events

1. Acquisition

On July 12, 2012, the Company completed the acquisition of additional working interest in certain oil and natural gas properties located in Glasscock County, TX for a contract price of $20.5 million from a private company, subject to certain purchase price adjustments. The initial accounting for the business combination is not complete pending detailed analyses of the facts and circumstances that existed as of the acquisition date.

2. New derivative contracts

Subsequent to June 30, 2012, the Company entered into additional commodity contracts, with approximately $4.2 million in deferred premiums associated. The following table summarizes information about these new commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.

		Floor price		Ceiling price

Natural gas (volumes in MMBtu):
Price collar	8,760,000	$	3.00	$	5.00	January 2013 - December 2013
Price collar	11,160,000	$	3.00	$	5.50	January 2014 - December 2014
Price collar	15,480,000	$	3.00	$	6.00	January 2015 - December 2015

Supplementary information

6 Months Ended

Jun. 30, 2012

Supplementary information

Supplementary Information

O—Supplementary information

Costs incurred in oil and natural gas property acquisition, exploration and development activities(1)

Costs incurred in the acquisition and development of oil and natural gas assets are presented below for the three and six months ended June 30, 2012 and 2011:

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Property acquisition costs:
Proved	$	—	$	—	$	—	$	—
Unproved		—		—		—		—
Exploration		22,219		12,973		51,686		21,868
Development costs		232,508		160,747		427,599		312,390

Total costs incurred	$	254,727	$	173,720	$	479,285	$	334,258

(1): The costs incurred for oil and natural gas development activities include $1.4 million and $0.2 million in asset retirement obligations for the three months ended June 30, 2012 and 2011, respectively, and $2.3 million and $0.5 million for the six months ended June 30, 2012 and 2011, respectively.

Basis of presentation and significant accounting policies (Policies)

6 Months Ended

Jun. 30, 2012

Basis of presentation and significant accounting policies

Basis of presentation

Basis of presentation

Use of estimates in the preparation of interim consolidated financial statements

Use of estimates in the preparation of interim unaudited consolidated financial statements

Accounts receivable

Accounts receivable

Accounts receivable consist of the following components as of June 30, 2012 and December 31, 2011:

(in thousands)	June 30, 2012		December 31, 2011

Oil and natural gas sales	$	38,945	$	49,434
Joint operations(1)		31,104		24,190
Other		1,783		511

Total, net	$	71,832	$	74,135

(1): Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of approximately $0.1 million at each of June 30, 2012 and December 31, 2011.

Derivative financial instruments

Derivative financial instruments

Deferred loan costs

Deferred loan costs

Future amortization expense of deferred loan costs at June 30, 2012 is as follows:

(in thousands)

Remaining 2012	$	2,534
2013		5,107
2014		5,164
2015		5,225
2016		3,969
Thereafter		9,667

Total	$	31,666

Asset retirement obligations

Asset retirement obligations

The following reconciles the Company's asset retirement obligations liability as of June 30, 2012 and December 31, 2011:

(in thousands)	Six months ended June 30, 2012			Year ended December 31, 2011

Liability at beginning of period	$	13,074		$	8,278
Liabilities added due to acquisitions, drilling and other		2,270			1,519
Accretion expense		556			616
Liabilities settled upon plugging and abandonment		(24	)		(340	)
Revision of estimates		—			3,001

Liability at end of period	$	15,876		$	13,074

Fair value measurements

Fair value measurements

Compensation awards

Compensation awards

Impairment of long-lived assets

Impairment of long-lived assets

Environmental laws and regulations

Environmental

Business combinations

Business combinations

Related party transactions

Related party transactions

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Net oil and natural gas sales(1)	$	18,350	$	18,093	$	37,740	$	33,533

The following table summarizes the amounts included in oil and natural gas sales receivable in the unaudited consolidated balance sheets for the periods presented:

(in thousands)		June 30, 2012			December 31, 2011

Oil and natural gas sales receivable(1)		$	5,504		$	6,845

(1): The Company has a gas gathering and processing arrangement with affiliates of Targa Resources, Inc. ("Targa"). Warburg Pincus IX, a majority stockholder of Laredo Holdings, and other affiliates of Warburg Pincus LLC hold investment interests in Targa. One of Laredo Holdings' directors is on the board of directors of affiliates of Targa.

Basis of presentation and significant accounting policies (Tables)

6 Months Ended

Jun. 30, 2012

Basis of presentation and significant accounting policies

Schedule of components of accounts receivable

(in thousands)	June 30, 2012		December 31, 2011

Oil and natural gas sales	$	38,945	$	49,434
Joint operations(1)		31,104		24,190
Other		1,783		511

Total, net	$	71,832	$	74,135

(1): Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of approximately $0.1 million at each of June 30, 2012 and December 31, 2011.

Schedule of components of other current assets and other current liabilities

(in thousands)	June 30, 2012		December 31, 2011

Lease operating expense payable	$	6,663	$	5,297
Prepaid drilling liability		1,995		2,378
Production taxes payable		1,591		1,493
Deferred income taxes payable		1,506		—
Current portion of asset retirement obligations		393		506
Other accrued liabilities		3,350		5,245

Total other current liabilities	$	15,498	$	14,919

Schedule of property and equipment

(in thousands)	June 30, 2012		December 31, 2011

Proved oil and natural gas properties	$	2,551,524	$	2,083,015
Less accumulated depletion and impairment		993,312		884,533

Proved oil and natural gas properties, net		1,558,212		1,198,482
Unproved properties not being amortized		127,971		117,195
Pipeline and gas gathering assets		63,667		58,136
Less accumulated depreciation		7,900		6,394

Pipeline and gas gathering assets, net		55,767		51,742
Other fixed assets		21,840		16,948
Less accumulated depreciation and amortization		7,385		5,858

Other fixed assets, net		14,455		11,090

Total property and equipment, net	$	1,756,405	$	1,378,509

Schedule of future amortization expense of deferred loan costs

(in thousands)

Remaining 2012	$	2,534
2013		5,107
2014		5,164
2015		5,225
2016		3,969
Thereafter		9,667

Total	$	31,666

Schedule of reconciliation of asset retirement obligations liability

(in thousands)	Six months ended June 30, 2012			Year ended December 31, 2011

Liability at beginning of period	$	13,074		$	8,278
Liabilities added due to acquisitions, drilling and other		2,270			1,519
Accretion expense		556			616
Liabilities settled upon plugging and abandonment		(24	)		(340	)
Revision of estimates		—			3,001

Liability at end of period	$	15,876		$	13,074

Summary of net oil and natural gas sales included in the consolidated statements of operations and summary of amounts included in oil and natural gas sales receivable in the consolidated balance sheets

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Net oil and natural gas sales(1)	$	18,350	$	18,093	$	37,740	$	33,533

(in thousands)		June 30, 2012			December 31, 2011

Oil and natural gas sales receivable(1)		$	5,504		$	6,845

(1): The Company has a gas gathering and processing arrangement with affiliates of Targa Resources, Inc. ("Targa"). Warburg Pincus IX, a majority stockholder of Laredo Holdings, and other affiliates of Warburg Pincus LLC hold investment interests in Targa. One of Laredo Holdings' directors is on the board of directors of affiliates of Targa.

Debt (Tables)

6 Months Ended

Jun. 30, 2012

Debt

Schedule of amounts incurred and charged to interest expenses

	Three months ended June 30,					Six months ended June 30,

(in thousands)	2012			2011		2012			2011
Cash payments for interest	$	1,356		$	2,935	$	28,461		$	6,626
Amortization and write-off of deferred loan costs and other adjustments		1,240			4,105		2,321			5,155
Change in accrued interest		19,204			4,696		6,081			10,471

Interest costs incurred		21,800			11,736		36,863			22,252
Less capitalized interest		(126	)		—		(505	)		—

Total interest expense	$	21,674		$	11,736	$	36,358		$	22,252

Schedule of weighted average interest rates and the weighted average outstanding debt balances

	Three months ended June 30,										Six months ended June 30,

	2012					2011					2012					2011
(in thousands except for percentages)	Weighted average principal		Weighted average interest rate(3)			Weighted average principal		Weighted average interest rate(3)			Weighted average principal		Weighted average interest rate(3)			Weighted average principal		Weighted average interest rate(3)
Senior Secured Credit Facility	$	270,741		0.17	%	$	43,182		0.55	%	$	190,085		0.72	%	$	68,056		0.75	%
2019 Notes		550,000		2.37	%		350,000		2.37	%		550,000		4.73	%		350,000		4.19	%
2022 Notes		500,000		1.29	%		—		—			500,000		1.29	%		—		—
Term Loan(1)		—		—			—		—			—		—			100,000		0.31	%
Broad Oak Credit Facility(2)		—		—			64,541		2.87	%		—		—			122,904		3.07	%

(1): Laredo's Second Lien Term Loan Agreement was entered into on July 7, 2010 and was paid-in-full and terminated on January 20, 2011.
(2): The Broad Oak revolving credit facility was paid-in-full and terminated on July 1, 2011.
(3): Interest rates presented are annual rates which have been prorated to reflect the portion of the year for which they have been incurred.

Schedule of carrying amount and fair value of debt instruments

	June 30, 2012				December 31, 2011

(in thousands)	Carrying value		Fair value		Carrying value		Fair value
2019 Notes(1)	$	551,863	$	616,000	$	551,961	$	585,750
2022 Notes		500,000		521,875		—		—
Senior Secured Credit Facility(2)		—		—		85,000		84,893

Total value of debt	$	1,051,863	$	1,137,875	$	636,961	$	670,643

(1): The carrying value of the 2019 Notes includes the October 2011 Notes unamortized bond premium of approximately $1.9 million and $2.0 million as of June 30, 2012 and December 31, 2011, respectively.
(2): No amounts were outstanding under the Senior Secured Credit Facility at June 30, 2012.

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Stock-based compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-based compensation

Schedule of outstanding restricted stock awards

(in thousands, except for weighted average grant date fair values)			Weighted average grant date fair value

Outstanding at December 31, 2011	911		$	1.14
Granted	777		$	23.50
Forfeited	(98	)	$	14.93
Vested	(233	)	$	0.44

Outstanding at June 30, 2012	1,357		$	13.02

Schedule of stock option award activity

(in thousands, except for weighted average exercise price and contractual term)			Weighted average exercise price (per option)

Outstanding at December 31, 2011	—		$	—	—
Granted	603		$	24.11	10
Forfeited	(54	)	$	24.11	10

Outstanding at June 30, 2012	549		$	24.11	10

Vested and exercisable at end of period	—

Schedule of assumptions used to estimate the fair value of options granted


Risk-free interest rate(1)		1.07	%
Expected option life(2)		6.01
Expected volatility(3)		60.18	%
Fair value per option	$	13.36

(1): U.S. Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, matching the treasury yield terms to the expected life of the option.
(2): As the Company has no historical exercise history, expected option life assumptions were developed using the simplified method in accordance with GAAP.
(3): The Company utilized a peer historical look-back, weighted with the Company's own volatility since the IPO, to develop the expected volatility.

Income taxes (Tables)

6 Months Ended

Jun. 30, 2012

Income taxes

Schedule of income tax expense

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Current taxes
Federal	$	—	$	—	$	—	$	—
State		—		—		—		—
Deferred taxes
Federal		17,055		22,254		30,847		24,528
State		369		886		1,334		1,209

Income tax expense	$	17,424	$	23,140	$	32,181	$	25,737

Schedule of reconciliation of income tax expense computed by applying the federal income tax rate of 34% to pre-tax income from operations

	Three months ended June 30,						Six months ended June 30,

(in thousands)	2012			2011			2012			2011
Income tax expense computed by applying the statutory rate	$	16,456		$	21,832		$	30,393		$	24,303
State income tax, net of federal tax benefit and increase in valuation allowance		1,395			1,478			1,900			1,189
Income from non-taxable entity		—			(6	)		—			(16	)
Non-deductible compensation		275			187			655			287
Change in valuation allowance		1			193			2			2
Other items		(703	)		(544	)		(769	)		(28	)

Income tax expense	$	17,424		$	23,140		$	32,181		$	25,737

Schedule of significant components of deferred tax assets

(in thousands)	June 30, 2012			December 31, 2011

Derivative financial instruments	$	(3,526	)	$	3,551
Oil and natural gas properties and equipment		(119,354	)		(87,138	)
Net operating loss carry-forward		186,222			180,740
Other		705			(926	)

		64,047			96,227
Valuation allowance		(650	)		(649	)

Net deferred tax asset	$	63,397		$	95,578

Schedule of net deferred tax assets and liabilities as classified in the consolidated balance sheets

(in thousands)	June 30, 2012		December 31, 2011

Deferred tax asset	$	64,903	$	95,578
Deferred tax liability		1,506		—

Net deferred tax assets	$	63,397	$	95,578

Derivative financial instruments (Tables)

6 Months Ended

Jun. 30, 2012

Derivative financial instruments

Summary of information of additional commodity derivative contracts

		Swap price		Floor price		Ceiling price		Contract period

Oil (volumes in Bbls):
Price collar	270,000		—	$	90.00	$	126.50	April 2012 - December 2012
Price collar	240,000		—	$	90.00	$	118.35	January 2013 - December 2013
Price collar	198,000		—	$	70.00	$	140.00	January 2014 - December 2014
Put	360,000		—	$	75.00		—	January 2014 - December 2014
Price collar	252,000		—	$	75.00	$	135.00	January 2015 - December 2015
Put	360,000		—	$	75.00		—	January 2015 - December 2015
Put	180,000		—	$	75.00		—	January 2014 - December 2014
Put	96,000		—	$	75.00		—	January 2015 - December 2015
Natural gas (volumes in MMBtu):
Swap	700,000	$	2.72		—		—	April 2012 - October 2012
Price collar	700,000		—	$	3.25	$	3.90	April 2013 - October 2013

Summary of open positions and derivatives in place

	Remaining year 2012		Year 2013		Year 2014		Year 2015

Oil Positions:
Puts:
Hedged volume (Bbls)		336,000		1,080,000		540,000		456,000
Weighted average price ($/Bbl)	$	65.79	$	65.00	$	75.00	$	75.00
Swaps:
Hedged volume (Bbls)		366,000		600,000		—		—
Weighted average price ($/Bbl)	$	93.52	$	96.32	$	—	$	—
Collars:
Hedged volume (Bbls)		603,000		768,000		726,000		252,000
Weighted average floor price ($/Bbl)	$	79.50	$	79.38	$	75.45	$	75.00
Weighted average ceiling price ($/Bbl)	$	118.09	$	121.67	$	129.09	$	135.00
Natural Gas Positions:
Puts:
Hedged volume (MMBtu)		2,160,000		6,600,000		—		—
Weighted average price ($/MMBtu)	$	5.38	$	4.00	$	—	$	—
Swaps:
Hedged volume (MMBtu)		1,240,000		—		—		—
Weighted average price ($/MMBtu)	$	5.04	$	—	$	—	$	—
Collars:
Hedged volume (MMBtu)		3,900,000		7,300,000		6,960,000		—
Weighted average floor price ($/MMBtu)	$	4.12	$	3.93	$	4.00	$	—
Weighted average ceiling price ($/MMBtu)	$	5.79	$	6.75	$	7.03	$	—
Basis swaps(1):
Hedged volume (MMBtu)		1,440,000		1,200,000		—		—
Weighted average price ($/MMBtu)	$	0.31	$	0.33	$	—	$	—

(1): The cash settlement price of the Company's basis swaps is calculated on the difference between the Company's natural gas futures contracts that settle on the NYMEX index and the NYMEX index price at the time of settlement. At June 30, 2012, the Company had 200,000 MMBtu for the remainder of 2012 and 500,000 MMBtu for 2013 in basis swaps that did not have corresponding volumes hedged with a NYMEX index price.

Schedule of settlement terms of interest rate derivatives

(in thousands except rate data)	Year 2012			Year 2013			Expiration date

Notional amount	$	50,000		$	50,000
Fixed rate		1.11	%		1.11	%	September 13, 2013
Notional amount	$	50,000		$	50,000
Cap rate		3.00	%		3.00	%	September 13, 2013

Total	$	100,000		$	100,000

Summary of fair value of derivatives outstanding on a gross basis

(in thousands)	June 30, 2012		December 31, 2011

Assets:
Commodity derivatives:
Oil derivatives	$	33,033	$	16,026
Natural gas derivatives		28,980		34,019
Interest rate derivatives		—		11

	$	62,013	$	50,056

Liabilities:
Commodity derivatives:
Oil derivatives(1)	$	23,691	$	28,044
Natural gas derivatives(2)		5,231		6,832
Interest rate derivatives		365		1,991

	$	29,287	$	36,867

(1): The oil derivatives fair value includes a deferred premium liability of $19.7 million and $13.4 million at June 30, 2012 and December 31, 2011, respectively.
(2): The natural gas derivatives fair value includes a deferred premium liability of $3.9 million and $5.4 million at June 30, 2012 and December 31, 2011, respectively.

Schedule of gains and losses on derivative instruments

	Three months ended June 30,						Six months ended June 30,

(in thousands)	2012			2011			2012			2011
Realized gains (losses):
Commodity derivatives	$	9,115		$	(1,584	)	$	13,823		$	(931	)
Interest rate derivatives		(835	)		(1,255	)		(1,938	)		(2,556	)

		8,280			(2,839	)		11,885			(3,487	)
Unrealized gains (losses):
Commodity derivatives		19,428			20,033			15,314			(8,654	)
Interest rate derivatives		835			279			1,615			1,462

		20,263			20,312			16,929			(7,192	)
Total gains (losses):
Commodity derivatives		28,543			18,449			29,137			(9,585	)
Interest rate derivatives		—			(976	)		(323	)		(1,094	)

	$	28,543		$	17,473		$	28,814		$	(10,679	)

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References + Details

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 8
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5580258-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 25
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n)(2))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41620-113959

+ Details

Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair value measurements

Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis

(in thousands)	Level 1		Level 2			Level 3			Total fair value

As of June 30, 2012:
Commodity derivatives	$	—	$	56,643		$	—		$	56,643
Deferred premiums		—		—			(23,552	)		(23,552	)
Interest rate derivatives		—		(365	)		—			(365	)

Total	$	—	$	56,278		$	(23,552	)	$	32,726

(in thousands)	Level 1		Level 2			Level 3			Total fair value

As of December 31, 2011:
Commodity derivatives	$	—	$	34,037		$	—		$	34,037
Deferred premiums		—		—			(18,868	)		(18,868	)
Interest rate derivatives		—		(1,980	)		—			(1,980	)

Total	$	—	$	32,057		$	(18,868	)	$	13,189

Summary of changes in assets classified as Level 3 measurements

	Three months ended June 30, 2012					Six months ended June 30, 2012

(in thousands)	Derivative option contracts		Deferred premiums			Derivative option contracts		Deferred premiums
Balance of Level 3 at beginning of period(1)	$	—	$	(23,061	)	$	—	$	(18,868	)
Realized and unrealized gains included in earnings		—		—			—		—
Amortization of deferred premiums		—		(169	)		—		(319	)
Total purchases and settlements:
Purchases		—		(1,917	)		—		(7,292	)
Settlements		—		1,595			—		2,927

Balance of Level 3 at end of period	$	—	$	(23,552	)	$	—	$	(23,552	)

Change in unrealized losses attributed to earnings relating to derivatives still held at end of period	$	—	$	—		$	—	$	—

	Three months ended June 30, 2011					Six months ended June 30, 2011

(in thousands)	Derivative option contracts		Deferred premiums			Derivative option contracts			Deferred premiums
Balance of Level 3 at beginning of period	$	12,856	$	(12,581	)	$	20,026		$	(12,495	)
Realized and unrealized gains (losses) included in earnings		521		—			(6,588	)		—
Amortization of deferred premiums		—		(109	)		—			(216	)
Total purchases and settlements:
Purchases		561		—			500			—
Settlements		—		20			—			41

Balance of Level 3 at end of period	$	13,938	$	(12,670	)	$	13,938		$	(12,670	)

Change in unrealized gains attributed to earnings relating to derivatives still held at end of period	$	10,638	$	—		$	1,970		$	—

(1): The Company transferred the commodity derivative option contracts out of Level 3 during the year ended December 31, 2011 due to the Company's ability to utilize transparent forward price curves and volatilities published and available through independent third party vendors. As a result, the Company transferred positions from Level 3 to Level 2 as the significant inputs used to calculate the fair value are all observable.

Commitments and contingencies (Tables)

6 Months Ended

Jun. 30, 2012

Commitments and contingencies

Schedule of minimum annual lease commitments

(in thousands)

Remaining 2012	$	720
2013		1,448
2014		1,102
2015		731
2016		282

Total	$	4,283

Schedule of rent expense

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Rent expense	$	295	$	307	$	602	$	590

Defined contribution plans (Tables)

6 Months Ended

Jun. 30, 2012

Defined contribution plans

Schedule of total contributions to the plans

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Contributions	$	325	$	326	$	642	$	855

Net income per share (Tables)

6 Months Ended

Jun. 30, 2012

Net income per share

Schedule of calculation of basic and diluted weighted average shares outstanding and net income per share

(in thousands, except for per share data)	Three months ended June 30, 2012		Six months ended June 30, 2012

Income (numerator):
Net income—basic and diluted	$	30,975	$	57,210
Weighted average shares (denominator):
Weighted average shares—basic		126,921		126,862
Non-vested restricted stock		1,301		1,239

Weighted average shares—diluted		128,222		128,101

Net income per share:
Basic	$	0.24	$	0.45
Diluted	$	0.24	$	0.45

Subsidiary guarantees (Tables)

6 Months Ended

Jun. 30, 2012

Subsidiary guarantees

Schedule of condensed consolidating balance sheet

Condensed consolidating balance sheet
June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings		Laredo		Subsidiary Guarantors		Intercompany eliminations			Consolidated company

Accounts receivable	$	—	$	54,616	$	17,216	$	—		$	71,832
Other current assets		—		172,615		199		—			172,814
Total oil and natural gas properties, net		—		999,604		686,579		—			1,686,183
Total pipeline and gas gathering assets, net		—		—		55,767		—			55,767
Total other fixed assets, net		—		11,686		2,769		—			14,455
Investment in subsidiaries		942,804		619,841		—		(1,562,645	)		—
Total other long-term assets		—		114,887		—		—			114,887

Total assets	$	942,804	$	1,973,249	$	762,530	$	(1,562,645	)	$	2,115,938

Accounts payable	$	1	$	29,730	$	19,580	$	—		$	49,311
Other current liabilities		—		126,691		48,024		—			174,715
Other long-term liabilities		—		9,443		8,548		—			17,991
Long-term debt		—		1,051,863		—		—			1,051,863
Stockholders' equity		942,803		755,522		686,378		(1,562,645	)		822,058

Total liabilities and stockholders' equity	$	942,804	$	1,973,249	$	762,530	$	(1,562,645	)	$	2,115,938

Condensed consolidating balance sheet
December 31, 2011
(audited)

(in thousands)	Laredo Holdings		Laredo		Subsidiary Guarantors		Intercompany eliminations			Consolidated company

Accounts receivable	$	—	$	53,006	$	21,129	$	—		$	74,135
Other current assets		54,921		20,599		204		(26,921	)		48,803
Total oil and natural gas properties, net		—		780,152		535,525		—			1,315,677
Total pipeline and gas gathering assets, net		—		—		51,742		—			51,742
Total other fixed assets, net		—		10,321		769		—			11,090
Investment in subsidiaries		888,043		554,901		—		(1,442,944	)		—
Total other long-term assets		—		126,205		—		—			126,205

Total assets	$	942,964	$	1,545,184	$	609,369	$	(1,469,865	)	$	1,627,652

Accounts payable	$	1	$	58,729	$	14,198	$	(26,921	)	$	46,007
Other current liabilities		—		130,990		37,364		—			168,354
Other long-term liabilities		—		8,779		7,538		—			16,317
Long-term debt		—		636,961		—		—			636,961
Stockholders' equity		942,963		709,725		550,269		(1,442,944	)		760,013

Total liabilities and stockholders' equity	$	942,964	$	1,545,184	$	609,369	$	(1,469,865	)	$	1,627,652

Schedule of condensed consolidating statement of operations

Condensed consolidating statement of operations
For the three months ended June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—		$	76,692		$	66,570		$	(2,638	)	$	140,624
Total operating costs and expenses		140			64,951			36,648			(2,638	)		99,101

Income (loss) from operations		(140	)		11,741			29,922			—			41,523
Interest income (expense), net		—			(21,659	)		—			—			(21,659	)
Other, net		—			28,543			(8	)		—			28,535

Income (loss) from operations before income tax		(140	)		18,625			29,914			—			48,399
Income tax expense		—			(17,424	)		—			—			(17,424	)

Net income (loss)	$	(140	)	$	1,201		$	29,914		$	—		$	30,975

Condensed consolidating statement of operations
For the three months ended June 30, 2011
(unaudited)

(in thousands)	Laredo Holdings		Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—	$	59,958		$	73,489		$	(1,720	)	$	131,727
Total operating costs and expenses		—		40,320			34,656			(1,720	)		73,256

Income from operations		—		19,638			38,833			—			58,471
Interest income (expense), net		19		(9,203	)		(2,530	)		—			(11,714	)
Other, net		—		3,113			14,342			—			17,455

Income from operations before income tax		19		13,548			50,645			—			64,212
Income tax expense		—		(5,323	)		(17,817	)		—			(23,140	)

Net income	$	19	$	8,225		$	32,828		$	—		$	41,072

Condensed consolidating statement of operations
For the six months ended June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—		$	152,458		$	143,403		$	(4,889	)	$	290,972
Total operating costs and expenses		159			126,564			72,226			(4,889	)		194,060

Income (loss) from operations		(159	)		25,894			71,177			—			96,912
Interest income (expense), net		—			(36,327	)		—			—			(36,327	)
Other, net		—			28,814			(8	)		—			28,806

Income (loss) from operations before income tax		(159	)		18,381			71,169			—			89,391
Income tax expense		—			(32,181	)		—			—			(32,181	)

Net income (loss)	$	(159	)	$	(13,800	)	$	71,169		$	—		$	57,210

Condensed consolidating statement of operations
For the six months ended June 30, 2011
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Total operating revenues	$	—		$	102,482		$	139,650		$	(3,294	)	$	238,838
Total operating costs and expenses		7			71,859			62,633			(3,294	)		131,205

Income (loss) from operations		(7	)		30,623			77,017			—			107,633
Interest income (expense), net		55			(17,152	)		(5,097	)		—			(22,194	)
Other, net		—			(5,696	)		(8,264	)		—			(13,960	)

Income from operations before income tax		48			7,775			63,656			—			71,479
Income tax expense		—			(4,336	)		(21,401	)		—			(25,737	)

Net income	$	48		$	3,439		$	42,255		$	—		$	45,742

Schedule of condensed consolidating statement of cash flows

Condensed consolidating statement of cash flows
For the six months ended June 30, 2012
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Net cash flows provided by (used in) operating activities	$	(160	)	$	49,843		$	123,186		$	26,921		$	199,790
Net cash flows provided by used in investing activities		(54,761	)		(307,882	)		(123,188	)		—			(485,831	)
Net cash flows provided by financing activities		—			404,524			—			—			404,524

Net increase (decrease) in cash and cash equivalents		(54,921	)		146,485			(2	)		26,921			118,483
Cash and cash equivalents at beginning of period		54,921			—			2			(26,921	)		28,002

Cash and cash equivalents at end of period	$	—		$	146,485		$	—		$	—		$	146,485

Condensed consolidating statement of cash flows
For the six months ended June 30, 2011
(unaudited)

(in thousands)	Laredo Holdings			Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company

Net cash flows provided by operating activities	$	47		$	65,580		$	102,583		$	(6,152	)	$	162,058
Net cash flows used in investing activities		(7,318	)		(203,452	)		(148,679	)		—			(359,449	)
Net cash flows provided by financing activities		—			137,872			50,336			—			188,208

Net increase (decrease) in cash and cash equivalents		(7,271	)		—			4,240			(6,152	)		(9,183	)
Cash and cash equivalents at beginning of period		38,652			—			6,489			(13,906	)		31,235

Cash and cash equivalents at end of period	$	31,381		$	—		$	10,729		$	(20,058	)	$	22,052

Subsequent events (Tables)

6 Months Ended

Jun. 30, 2012

Subsequent events

Schedule of new commodity contracts entered into by the company

		Floor price		Ceiling price

Natural gas (volumes in MMBtu):
Price collar	8,760,000	$	3.00	$	5.00	January 2013 - December 2013
Price collar	11,160,000	$	3.00	$	5.50	January 2014 - December 2014
Price collar	15,480,000	$	3.00	$	6.00	January 2015 - December 2015

Supplementary information (Tables)

6 Months Ended

Jun. 30, 2012

Supplementary information

Schedule of costs incurred in the acquisition and development of oil and natural gas assets

	Three months ended June 30,				Six months ended June 30,

(in thousands)	2012		2011		2012		2011
Property acquisition costs:
Proved	$	—	$	—	$	—	$	—
Unproved		—		—		—		—
Exploration		22,219		12,973		51,686		21,868
Development costs		232,508		160,747		427,599		312,390

Total costs incurred	$	254,727	$	173,720	$	479,285	$	334,258

(1): The costs incurred for oil and natural gas development activities include $1.4 million and $0.2 million in asset retirement obligations for the three months ended June 30, 2012 and 2011, respectively, and $2.3 million and $0.5 million for the six months ended June 30, 2012 and 2011, respectively.

- Definition

Tabular disclosure of the aggregate of costs (whether the costs are capitalized or charged to expense at the time they are incurred ) incurred for the year in oil and gas property acquisition, exploration and development activities.

+ References + Details

Organization (Details)	1 Months Ended
Organization (Details)	Dec. 31, 2011 vote $ / shares	Jun. 30, 2012 $ / shares	Dec. 19, 2011 $ / shares
Organization
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock
Organization
Number of votes per share of stock \| vote	1
Common stock, par value (in dollars per share)			$ 0.01

Basis of presentation and significant accounting policies (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2012 USD ($) segment	Dec. 31, 2011 USD ($)
Basis of presentation
Number of business segment \| segment	1
Accounts receivable
Term of accounts receivable to be considered as past due (in days)	30 days
Term of past due balances to be reviewed individually for collectability (in days)	90 days
Oil and natural gas sales	$ 38,945	$ 49,434
Joint operations	31,104	24,190
Other	1,783	511
Total, net	71,832	74,135
Allowance for doubtful accounts of accounts receivable for joint operations	100	100
Other current liabilities
Lease operating expense payable	6,663	5,297
Prepaid drilling liability	1,995	2,378
Production taxes payable	1,591	1,493
Deffered income taxes payable	1,506
Current portion of asset retirement obligations	393	506
Other accrued liabilities	3,350	5,245
Total other current liabilities	$ 15,498	$ 14,919

Basis of presentation and significant accounting policies (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Property and equipment
Proved oil and natural gas properties	$ 2,551,524,000		$ 2,551,524,000		$ 2,083,015,000
Less accumulated depletion and impairment	993,312,000		993,312,000		884,533,000
Proved oil and natural gas properties, net	1,558,212,000		1,558,212,000		1,198,482,000
Unproved properties not being amortized	127,971,000		127,971,000		117,195,000
Property and equipment, gross	2,765,002,000		2,765,002,000		2,275,294,000
Less accumulated depreciation and amortization					896,785,000
Property and equipment, net	1,756,405,000		1,756,405,000		1,378,509,000
Depletion expense per BOE	20.70	$ 20.11	20.20	$ 18.44
Pipeline and gas gathering assets
Property and equipment
Property and equipment, gross	63,667,000		63,667,000		58,136,000
Less accumulated depreciation and amortization	7,900,000		7,900,000		6,394,000
Property and equipment, net	55,767,000		55,767,000		51,742,000
Other fixed assets
Property and equipment
Property and equipment, gross	21,840,000		21,840,000		16,948,000
Less accumulated depreciation and amortization	7,385,000		7,385,000		5,858,000
Property and equipment, net	$ 14,455,000		$ 14,455,000		$ 11,090,000

Basis of presentation and significant accounting policies (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Deferred loan costs
Deferred loans costs capitalized during the period	$ 10,500	$ 400	$ 10,500	$ 10,600
Deferred loan costs, net	31,666		31,666		$ 23,457
Accumulated amortization	6,700		6,700		4,400
Write-off of deferred loan costs				3,246
Future amortization expense of deferred loan costs
Remaining 2012	2,534		2,534
2013	5,107		5,107
2014	5,164		5,164
2015	5,225		5,225
2016	3,969		3,969
Thereafter	9,667		9,667
Total	31,666		31,666		23,457
Reconciliation of asset retirement obligations liability
Liability at beginning of year			13,074	8,278	8,278
Liabilities added due to acquisitions, drilling, and other			2,270		1,519
Accretion expense	292	$ 155	556	$ 304	616
Liabilities settled upon plugging and abandonment			(24)		(340)
Revision of estimates					3,001
Liability at end of year	$ 15,876		$ 15,876		$ 13,074

Basis of presentation and significant accounting policies (Details 4) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Impairment of long-lived assets
Write-down of materials and supplies		$ 40		$ 200
Performance unit awards
Equity and stock-based compensation
Compensation expense	$ 500		$ 1,000

- Definition

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

+ References + Details

- Definition

Charge to cost of goods sold that represents the reduction of the carrying amount of inventory, generally attributable to obsolescence or market conditions.

+ References + Details

Basis of presentation and significant accounting policies (Details 5) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jul. 12, 2012	Dec. 31, 2011
Related party transactions
Net oil and natural gas sales	$ 18,350	$ 18,093	$ 37,740	$ 33,533
Oil and natural gas sales receivable	$ 5,504		$ 5,504			$ 6,845
Oil and natural gas properties located in Glasscock County, Texas
Business combinations
Contract price					$ 20,500

- Definition

Amount of receivables due from an entity that is affiliated with the reporting entity by means of direct or indirect ownership, due within 1 year (or 1 business cycle).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39599-107864

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k)(1))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3(a)(2))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 2
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3
-Subparagraph a
-Article 5

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Subparagraph 1
-Article 4

+ Details

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References + Details

Debt (Details) $ in Thousands	1 Months Ended			3 Months Ended		6 Months Ended
Debt (Details) $ in Thousands	Apr. 30, 2012 USD ($)	Oct. 31, 2011 USD ($)	Jan. 31, 2011 USD ($)	Jun. 30, 2012 USD ($) letter	Jun. 30, 2011 USD ($)	Jun. 30, 2012 USD ($) letter	Jun. 30, 2011 USD ($)	Apr. 27, 2012	Oct. 19, 2011	Jan. 20, 2011
Debt
Cash payments for interest				$ 1,356	$ 2,935	$ 28,461	$ 6,626
Amortization and write-off of deferred loan costs and other adjustments				1,240	4,105	2,321	5,155
Change in accrued interest				19,204	4,696	6,081	10,471
Interest costs incurred				21,800	11,736	36,863	22,252
Less capitalized interest				(126)		(505)
Total interest expense				$ 21,674	$ 11,736	$ 36,358	$ 22,252
2019 Notes
Debt
Weighted average interest rate (as a percent)				2.37%	2.37%	4.73%	4.19%
Weighted average principal				$ 550,000	$ 350,000	$ 550,000	$ 350,000
January Notes
Debt
Debt issued			$ 350,000
Interest rate (as a percent)										9.50%
October Notes
Debt
Debt issued		$ 200,000
Interest rate (as a percent)									9.50%
Term Loan
Debt
Weighted average interest rate (as a percent)							0.31%
Weighted average principal							$ 100,000
Letters of credit
Debt
Borrowing capacity				20,000		20,000
Outstanding amount				$ 30		$ 30
Number of letters of credit outstanding \| letter				1		1
2022 Notes
Debt
Weighted average interest rate (as a percent)				1.29%		1.29%
Weighted average principal				$ 500,000		$ 500,000
Debt issued	$ 500,000
Interest rate (as a percent)								7.375%
Redemption price of the debt instrument if redeemed with the proceeds of certain equity offerings before May 1, 2015 (as a percent)						107.375%
Percentage of the principal amount of the debt instrument which the entity may redeem if a change of control occurs prior to May 1, 2013						110.00%
2022 Notes \| Minimum
Debt
Percentage of principal amount of the 2022 Notes issued under the Indenture, which must remain outstanding immediately after redemption				65.00%		65.00%
2022 Notes \| Maximum
Debt
Percentage of the principal amount of the debt instrument which the entity may redeem with the proceeds from certain equity offerings				35.00%		35.00%
Redemption period of the Notes following the closing date of equity offering (in days)						180 days
2022 Notes \| Twelve-month period beginning on May 1, 2017
Debt
Redemption price of debt instrument (as a percent)				103.688%		103.688%
2022 Notes \| Twelve-month period beginning on May 1, 2018
Debt
Redemption price of debt instrument (as a percent)				102.458%		102.458%
2022 Notes \| Twelve-month period beginning on May 1, 2019
Debt
Redemption price of debt instrument (as a percent)				101.229%		101.229%
2022 Notes \| Twelve-month period beginning on May 1, 2020 and at any time thereafter
Debt
Redemption price of debt instrument (as a percent)				100.00%		100.00%
Senior Secured Credit Facility
Debt
Weighted average interest rate (as a percent)				0.17%	0.55%	0.72%	0.75%
Weighted average principal				$ 270,741	$ 43,182	$ 190,085	$ 68,056
Repayments of debt	$ 280,000
Borrowing capacity				$ 785,000		$ 785,000
Broad Oak Credit Facility
Debt
Weighted average interest rate (as a percent)					2.87%		3.07%
Weighted average principal					$ 64,541		$ 122,904

Debt (Details 2) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
October Notes
Fair value of debt
Unamortized bond premium	$ 1,900	$ 2,000
Carrying value
Fair value of debt
Debt	1,051,863	636,961
Carrying value \| 2019 Notes
Fair value of debt
Debt	551,863	551,961
Carrying value \| 2022 Notes
Fair value of debt
Debt	500,000
Carrying value \| Senior Secured Credit Facility
Fair value of debt
Debt		85,000
Fair value
Fair value of debt
Debt	1,137,875	670,643
Fair value \| 2019 Notes
Fair value of debt
Debt	616,000	585,750
Fair value \| 2022 Notes
Fair value of debt
Debt	$ 521,875
Fair value \| Senior Secured Credit Facility
Fair value of debt
Debt		$ 84,893

Stock-based compensation (Details) shares in Thousands	6 Months Ended
Stock-based compensation (Details) shares in Thousands	Jun. 30, 2012 item $ / shares shares	Nov. 30, 2011 shares
Equity and stock-based compensation
Percentage of awards vesting at the grant date	20.00%
Percentage of awards vesting annually after the grant date	20.00%
Weighted-average exercise price (per option)
Outstanding at end of the period (in dollars per share)	$ 24.11
Long-Term Incentive Plan
Equity and stock-based compensation
Shares available for issuance \| shares		10,000
Restricted Stock Awards
Restricted stock awards
Outstanding at the beginning of the period (in shares) \| shares	911
Granted (in shares) \| shares	777
Forfeited (in shares) \| shares	(98)
Vested (in shares) \| shares	(233)
Outstanding at the end of the period (in shares) \| shares	1,357
Weighted-average grant date fair value
Outstanding at the beginning of the period (in dollars per share)	$ 1.14
Granted (in dollars per share)	23.50
Forfeited (in dollars per share)	14.93
Vested (in dollars per share)	0.44
Outstanding at the end of the period (in dollars per share)	$ 13.02
Restricted Stock Awards \| Long-Term Incentive Plan
Equity and stock-based compensation
Percentage of awards vesting on the first anniversary date of the grant	33.00%
Percentage of awards vesting on the second anniversary date of the grant	33.00%
Percentage of awards vesting on the third anniversary date of the grant	34.00%
Number of installments over which awards vest and are exercisable \| item	4
Number of anniversaries over which awards vest and are exercisable \| item	4
Restricted stock option awards
Restricted stock option awards
Granted (in shares) \| shares	603
Forfeited (in shares) \| shares	(54)
Outstanding at the end of the period (in shares) \| shares	549
Weighted-average exercise price (per option)
Granted (in dollars per share)	$ 24.11
Forfeited (in dollars per share)	24.11
Outstanding at end of the period (in dollars per share)	$ 24.11
Weighted-average contractual term
Outstanding at the end of the period	10 years
Granted	10 years
Forfeited	10 years
Requisite service period of the awards	4 years
Assumptions used to estimate the fair value of options granted
Risk-free interest rate (as a percent)	1.07%
Expected option life	6 years 4 days
Expected volatility (as a percent)	60.18%
Fair value per option (in dollars per share)	$ 13.36

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Deferred taxes
Federal	$ 17,055	$ 22,254	$ 30,847	$ 24,528
State	369	886	1,334	1,209
Income tax expense	17,424	23,140	$ 32,181	25,737
Federal income tax rate (as a percent)			34.00%
Reconciliation of income tax (expense) benefit computed by applying the federal income tax rate to pre-tax loss from operations
Income tax expense computed by applying the statutory rate	16,456	21,832	$ 30,393	24,303
State income tax, net of federal tax benefit and increase in valuation allowance	1,395	1,478	1,900	1,189
Income from non-taxable entity		(6)		(16)
Non-deductible compensation	275	187	655	287
Change in valuation allowance	1	193	2	2
Other items	(703)	(544)	(769)	(28)
Income tax expense	$ 17,424	$ 23,140	$ 32,181	$ 25,737

Income taxes (Details 2) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Significant components of deferred tax assets
Derivative financial instruments	$ (3,526)	$ 3,551
Oil and natural gas properties and equipment	(119,354)	(87,138)
Net operating loss carry-forward	186,222	180,740
Other	705	(926)
Gross deferred tax assets	64,047	96,227
Valuation allowance	(650)	(649)
Net deferred tax assets	63,397	95,578
Net deferred tax assets and liabilities
Deferred tax asset	64,903	95,578
Deferred tax liability	1,506
Net deferred tax assets	$ 63,397	$ 95,578

Income taxes (Details 3) $ in Millions	Jun. 30, 2012 USD ($)
Federal
Operating loss carry-forward
Net operating loss carry-forwards	$ 527.3
State
Operating loss carry-forward
Net operating loss carry-forwards	$ 180.9

Income taxes (Details 4) $ in Thousands	Jun. 30, 2012 USD ($)
State of Louisiana deferred tax asset
Valuation allowance
Valuation allowance	$ 600
Charitable contribution carry-forward
Valuation allowance
Valuation allowance	$ 30

Derivative financial instruments (Details) $ in Thousands	Jun. 30, 2012 USD ($) bbl MMBTU contract USDPerMMBTu USDPerBarrel USDperunit
Remaining year 2012 \| Basis Swaps
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu) \| MMBTU	200,000
January 2013 - December 2013 \| Basis Swaps
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu) \| MMBTU	500,000
Derivatives not designated as hedges
Derivative financial instruments
Number of open derivative contracts \| contract	54
Oil derivatives \| April 2012 - December 2012 \| Collars
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	270,000
Floor price (in dollars per unit) \| USDperunit	90.00
Ceiling price (in dollars per unit) \| USDperunit	126.50
Oil derivatives \| Remaining year 2012 \| Puts
Open positions
Hedged volume (Bbls/MMBtu)	336,000
Weighted average price (in dollars per Bbl) \| USDPerBarrel	65.79
Oil derivatives \| Remaining year 2012 \| Swaps
Open positions
Hedged volume (Bbls/MMBtu)	366,000
Weighted average price (in dollars per Bbl) \| USDPerBarrel	93.52
Oil derivatives \| Remaining year 2012 \| Collars
Open positions
Hedged volume (Bbls/MMBtu)	603,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerBarrel	79.50
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerBarrel	118.09
Oil derivatives \| January 2013 - December 2013 \| Puts
Open positions
Hedged volume (Bbls/MMBtu)	1,080,000
Weighted average price (in dollars per Bbl) \| USDPerBarrel	65.00
Oil derivatives \| January 2013 - December 2013 \| Swaps
Open positions
Hedged volume (Bbls/MMBtu)	600,000
Weighted average price (in dollars per Bbl) \| USDPerBarrel	96.32
Oil derivatives \| January 2013 - December 2013 \| Collars
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	240,000
Floor price (in dollars per unit) \| USDperunit	90.00
Ceiling price (in dollars per unit) \| USDperunit	118.35
Open positions
Hedged volume (Bbls/MMBtu)	768,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerBarrel	79.38
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerBarrel	121.67
Oil derivatives \| January 2014 - December 2014 \| Puts
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	360,000
Floor price (in dollars per unit) \| USDperunit	75.00
Open positions
Hedged volume (Bbls/MMBtu)	540,000
Weighted average price (in dollars per Bbl) \| USDPerBarrel	75.00
Oil derivatives \| January 2014 - December 2014 \| Collars
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	198,000
Floor price (in dollars per unit) \| USDperunit	70.00
Ceiling price (in dollars per unit) \| USDperunit	140.00
Open positions
Hedged volume (Bbls/MMBtu)	726,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerBarrel	75.45
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerBarrel	129.09
Oil derivatives \| January 2015 - December 2015 \| Puts
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	360,000
Floor price (in dollars per unit) \| USDperunit	75.00
Open positions
Hedged volume (Bbls/MMBtu)	456,000
Weighted average price (in dollars per Bbl) \| USDPerBarrel	75.00
Oil derivatives \| January 2015 - December 2015 \| Collars
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	252,000
Floor price (in dollars per unit) \| USDperunit	75.00
Ceiling price (in dollars per unit) \| USDperunit	135.00
Open positions
Hedged volume (Bbls/MMBtu)	252,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerBarrel	75.00
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerBarrel	135.00
Oil derivatives \| January 2014 - December 2014 \| Puts
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu)	180,000
Floor price (in dollars per unit) \| USDperunit	75.00
Natural gas derivatives \| April 2012 - October 2012 \| Swaps
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu) \| MMBTU	700,000
Swap price (in dollars per unit) \| USDperunit	2.72
Natural gas derivatives \| Remaining year 2012 \| Puts
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	2,160,000
Weighted average price (in dollars per MMBtu) \| USDPerMMBTu	5.38
Natural gas derivatives \| Remaining year 2012 \| Swaps
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	1,240,000
Weighted average price (in dollars per MMBtu) \| USDPerMMBTu	5.04
Natural gas derivatives \| Remaining year 2012 \| Collars
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	3,900,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerMMBTu	4.12
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerMMBTu	5.79
Natural gas derivatives \| Remaining year 2012 \| Basis Swaps
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	1,440,000
Weighted average price (in dollars per MMBtu) \| USDPerMMBTu	0.31
Natural gas derivatives \| April 2013 - October 2013 \| Collars
Derivative financial instruments
Aggregate volumes (in Bbls/MMBtu) \| MMBTU	700,000
Floor price (in dollars per unit) \| USDperunit	3.25
Ceiling price (in dollars per unit) \| USDperunit	3.90
Natural gas derivatives \| January 2013 - December 2013 \| Puts
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	6,600,000
Weighted average price (in dollars per MMBtu) \| USDPerMMBTu	4.00
Natural gas derivatives \| January 2013 - December 2013 \| Collars
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	7,300,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerMMBTu	3.93
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerMMBTu	6.75
Natural gas derivatives \| January 2013 - December 2013 \| Basis Swaps
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	1,200,000
Weighted average price (in dollars per MMBtu) \| USDPerMMBTu	0.33
Natural gas derivatives \| January 2014 - December 2014 \| Collars
Open positions
Hedged volume (Bbls/MMBtu) \| MMBTU	6,960,000
Weighted average floor price (in dollars per Bbl/MMBtu) \| USDPerMMBTu	4.00
Weighted average ceiling price (in dollars per Bbl/MMBtu) \| USDPerMMBTu	7.03
Interest rate derivatives \| Remaining year 2012
Interest rate derivatives
Notional amount \| $	$ 100,000
Interest rate derivatives \| January 2013 - December 2013
Interest rate derivatives
Notional amount \| $	100,000
Interest rate cap \| Remaining year 2012
Interest rate derivatives
Notional amount \| $	$ 50,000
Cap rate (as a percent)	3.00%
Interest rate cap \| January 2013 - December 2013
Interest rate derivatives
Notional amount \| $	$ 50,000
Cap rate (as a percent)	3.00%
Interest rate fixed \| Remaining year 2012
Interest rate derivatives
Notional amount \| $	$ 50,000
Fixed rate (as a percent)	1.11%
Interest rate fixed \| January 2013 - December 2013
Interest rate derivatives
Notional amount \| $	$ 50,000
Fixed rate (as a percent)	1.11%

Derivative financial instruments (Details 2) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Assets:
Fair value of derivatives outstanding on gross basis
Fair value, derivative assets	$ 62,013	$ 50,056
Liabilities:
Fair value of derivatives outstanding on gross basis
Fair value, derivative liabilities	29,287	36,867
Oil derivatives
Fair value of derivatives outstanding on gross basis
Deferred premium liability	19,700	13,400
Oil derivatives \| Assets:
Fair value of derivatives outstanding on gross basis
Fair value, derivative assets	33,033	16,026
Oil derivatives \| Liabilities:
Fair value of derivatives outstanding on gross basis
Fair value, derivative liabilities	23,691	28,044
Natural gas derivatives
Fair value of derivatives outstanding on gross basis
Deferred premium liability	3,900	5,400
Natural gas derivatives \| Assets:
Fair value of derivatives outstanding on gross basis
Fair value, derivative assets	28,980	34,019
Natural gas derivatives \| Liabilities:
Fair value of derivatives outstanding on gross basis
Fair value, derivative liabilities	5,231	6,832
Interest rate derivatives \| Assets:
Fair value of derivatives outstanding on gross basis
Fair value, derivative assets		11
Interest rate derivatives \| Liabilities:
Fair value of derivatives outstanding on gross basis
Fair value, derivative liabilities	$ 365	$ 1,991

Derivative financial instruments (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Derivative financial instruments
Unrealized gains (losses)			$ 16,929	$ (7,192)
Total gains (losses)		$ (976)	(323)	(1,094)
Derivatives not designated as hedges
Derivative financial instruments
Realized gains (losses)	$ 8,280	(2,839)	11,885	(3,487)
Unrealized gains (losses)	20,263	20,312	16,929	(7,192)
Total gains (losses)	28,543	17,473	28,814	(10,679)
Commodity derivatives \| Derivatives not designated as hedges
Derivative financial instruments
Realized gains (losses)	9,115	(1,584)	13,823	(931)
Unrealized gains (losses)	19,428	20,033	15,314	(8,654)
Total gains (losses)	28,543	18,449	29,137	(9,585)
Interest rate derivatives \| Derivatives not designated as hedges
Derivative financial instruments
Realized gains (losses)	(835)	(1,255)	(1,938)	(2,556)
Unrealized gains (losses)	$ 835	279	1,615	1,462
Total gains (losses)		$ (976)	$ (323)	$ (1,094)

Fair value measurements (Details) - USD ($) $ in Thousands	6 Months Ended
Fair value measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Deferred premiums \| Minimum
Fair value measurement on a recurring basis
Discount rate used to discount deferred premium to net present value at contract trade date (as a percent)	2.06%
Deferred premiums \| Maximum
Fair value measurement on a recurring basis
Discount rate used to discount deferred premium to net present value at contract trade date (as a percent)	3.56%
Recurring \| Level 2
Fair value measurement on a recurring basis
Derivatives	$ 56,278	$ 32,057
Recurring \| Level 2 \| Commodity derivatives
Fair value measurement on a recurring basis
Derivatives	56,643	34,037
Recurring \| Level 2 \| Interest rate derivatives
Fair value measurement on a recurring basis
Derivatives	(365)	(1,980)
Recurring \| Level 3
Fair value measurement on a recurring basis
Derivatives	(23,552)	(18,868)
Recurring \| Level 3 \| Deferred premiums
Fair value measurement on a recurring basis
Derivatives	(23,552)	(18,868)
Recurring \| Total fair value
Fair value measurement on a recurring basis
Derivatives	32,726	13,189
Recurring \| Total fair value \| Commodity derivatives
Fair value measurement on a recurring basis
Derivatives	56,643	34,037
Recurring \| Total fair value \| Deferred premiums
Fair value measurement on a recurring basis
Derivatives	(23,552)	(18,868)
Recurring \| Total fair value \| Interest rate derivatives
Fair value measurement on a recurring basis
Derivatives	$ (365)	$ (1,980)

Fair value measurements (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Changes in liabilities classified as Level 3 measurements
Amortization of premiums paid for derivative financial instruments			$ 319	$ 216
Deferred premiums
Changes in liabilities classified as Level 3 measurements
Balance of Level 3 at the beginning of the period	$ (23,061)	$ (12,581)	(18,868)	(12,495)
Amortization of premiums paid for derivative financial instruments	(169)	(109)	(319)	(216)
Total purchases and settlements:
Purchases	(1,917)		(7,292)
Settlements	1,595	20	2,927	41
Balance of Level 3 at the end of the period	$ (23,552)	(12,670)	$ (23,552)	(12,670)
Derivative option contracts
Changes in assets classified as Level 3 measurements
Balance of Level 3 at the beginning of the period		12,856		20,026
Realized and unrealized gains (losses) included in earnings		521		(6,588)
Total purchases and settlements:
Purchases		561		500
Balance of Level 3 at the end of the period		13,938		13,938
Change in unrealized gains attributed to earnings relating to derivatives		$ 10,638		$ 1,970

Commitments and contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Lease commitments
Remaining 2012	$ 720		$ 720
2013	1,448		1,448
2014	1,102		1,102
2015	731		731
2016	282		282
Total	4,283		4,283
Rent expense
Rent expense	295	$ 307	602	$ 590
Drilling contracts
Drilling contracts
Future commitments	$ 35,800		$ 35,800

Defined contribution plans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Defined contribution plan
Percentage of employer contributions vested upon receipt			100.00%
Contributions	$ 325	$ 326	$ 642	$ 855
Maximum
Defined contribution plan
Tax-deferred contributions of eligible employees as a percentage of their annual compensation			100.00%
Maximum matching contributions by Laredo as a percentage of the employee's compensation			6.00%

Net income per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income per share
Outstanding options to purchase common stock excluded from calculation of diluted earnings per share (in shares)	549,446		549,446
Exercise price of shares outstanding (in dollars per share)	$ 24.11		$ 24.11
Income (numerator):
Net income-basic and diluted	$ 30,975	$ 41,072	$ 57,210	$ 45,742
Weighted average shares (denominator):
Weighted average shares-basic	126,921,000		126,862,000
Non-vested restricted stock (in shares)	1,301,000		1,239,000
Weighted average shares-diluted	128,222,000		128,101,000
Net income per share:
Basic (in dollars per share)	$ 0.24		$ 0.45
Diluted (in dollars per share)	$ 0.24		$ 0.45

Subsidiary guarantees (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Subsidiary guarantees
Accounts receivable	$ 71,832	$ 74,135
Other current assets	172,814	48,803
Total oil and natural gas properties, net	1,686,183	1,315,677
Total pipeline and gas gathering assets, net	55,767	51,742
Total other fixed assets, net	14,455	11,090
Total other long-term assets	114,887	126,205
Total assets	2,115,938	1,627,652
Accounts payable	49,311	46,007
Other current liabilities	174,715	168,354
Other long-term liabilities	17,991	16,317
Long-term debt	1,051,863	636,961
Stockholders' equity	822,058	760,013
Total liabilities and stockholders' equity	2,115,938	1,627,652
Laredo Holdings
Subsidiary guarantees
Other current assets		54,921
Investment in subsidiaries	942,804	888,043
Total assets	942,804	942,964
Accounts payable	1	1
Stockholders' equity	942,803	942,963
Total liabilities and stockholders' equity	942,804	942,964
Laredo
Subsidiary guarantees
Accounts receivable	54,616	53,006
Other current assets	172,615	20,599
Total oil and natural gas properties, net	999,604	780,152
Total other fixed assets, net	11,686	10,321
Investment in subsidiaries	619,841	554,901
Total other long-term assets	114,887	126,205
Total assets	1,973,249	1,545,184
Accounts payable	29,730	58,729
Other current liabilities	126,691	130,990
Other long-term liabilities	9,443	8,779
Long-term debt	1,051,863	636,961
Stockholders' equity	755,522	709,725
Total liabilities and stockholders' equity	1,973,249	1,545,184
Subsidiary Guarantors
Subsidiary guarantees
Accounts receivable	17,216	21,129
Other current assets	199	204
Total oil and natural gas properties, net	686,579	535,525
Total pipeline and gas gathering assets, net	55,767	51,742
Total other fixed assets, net	2,769	769
Total assets	762,530	609,369
Accounts payable	19,580	14,198
Other current liabilities	48,024	37,364
Other long-term liabilities	8,548	7,538
Stockholders' equity	686,378	550,269
Total liabilities and stockholders' equity	762,530	609,369
Intercompany eliminations
Subsidiary guarantees
Other current assets		(26,921)
Investment in subsidiaries	(1,562,645)	(1,442,944)
Total assets	(1,562,645)	(1,469,865)
Accounts payable		(26,921)
Stockholders' equity	(1,562,645)	(1,442,944)
Total liabilities and stockholders' equity	$ (1,562,645)	$ (1,469,865)

Subsidiary guarantees (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Subsidiary guarantees (Details 2) - USD ($) $ in Thousands	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Subsidiary guarantees
Total operating revenues	$ 140,624	$ 131,727	$ 290,972	$ 238,838
Total operating costs and expenses	99,101	73,256	194,060	131,205
Operating income	41,523	58,471	96,912	107,633
Interest income (expense), net	(21,659)	(11,714)	(36,327)	(22,194)
Other, net	28,535	17,455	28,806	(13,960)
Income before income taxes	48,399	64,212	89,391	71,479
Income tax expense	(17,424)	(23,140)	(32,181)	(25,737)
Net income	30,975	41,072	57,210	45,742
Laredo Holdings
Subsidiary guarantees
Total operating costs and expenses	140		159	7
Operating income	(140)		(159)	(7)
Interest income (expense), net		19		55
Income before income taxes	(140)	19	(159)	48
Net income	(140)	19	(159)	48
Laredo
Subsidiary guarantees
Total operating revenues	76,692	59,958	152,458	102,482
Total operating costs and expenses	64,951	40,320	126,564	71,859
Operating income	11,741	19,638	25,894	30,623
Interest income (expense), net	(21,659)	(9,203)	(36,327)	(17,152)
Other, net	28,543	3,113	28,814	(5,696)
Income before income taxes	18,625	13,548	18,381	7,775
Income tax expense	(17,424)	(5,323)	(32,181)	(4,336)
Net income	1,201	8,225	(13,800)	3,439
Subsidiary Guarantors
Subsidiary guarantees
Total operating revenues	66,570	73,489	143,403	139,650
Total operating costs and expenses	36,648	34,656	72,226	62,633
Operating income	29,922	38,833	71,177	77,017
Interest income (expense), net		(2,530)		(5,097)
Other, net	(8)	14,342	(8)	(8,264)
Income before income taxes	29,914	50,645	71,169	63,656
Income tax expense		(17,817)		(21,401)
Net income	29,914	32,828	71,169	42,255
Intercompany eliminations
Subsidiary guarantees
Total operating revenues	(2,638)	(1,720)	(4,889)	(3,294)
Total operating costs and expenses	$ (2,638)	$ (1,720)	$ (4,889)	$ (3,294)

Subsidiary guarantees (Details 3) - USD ($) $ in Thousands	6 Months Ended
Subsidiary guarantees (Details 3) - USD ($) $ in Thousands	Jun. 30, 2012	Jun. 30, 2011
Subsidiary guarantees
Net cash flows provided by (used in) operating activities	$ 199,790	$ 162,058
Net cash flows provided by used in investing activities	(485,831)	(359,449)
Net cash flows provided by financing activities	404,524	188,208
Net increase (decrease) in cash and cash equivalents	118,483	(9,183)
Cash and cash equivalents, beginning of period	28,002	31,235
Cash and cash equivalents, end of period	146,485	22,052
Laredo Holdings
Subsidiary guarantees
Net cash flows provided by (used in) operating activities	(160)	47
Net cash flows provided by used in investing activities	(54,761)	(7,318)
Net increase (decrease) in cash and cash equivalents	(54,921)	(7,271)
Cash and cash equivalents, beginning of period	54,921	38,652
Cash and cash equivalents, end of period		31,381
Laredo
Subsidiary guarantees
Net cash flows provided by (used in) operating activities	49,843	65,580
Net cash flows provided by used in investing activities	(307,882)	(203,452)
Net cash flows provided by financing activities	404,524	137,872
Net increase (decrease) in cash and cash equivalents	146,485
Cash and cash equivalents, end of period	146,485
Subsidiary Guarantors
Subsidiary guarantees
Net cash flows provided by (used in) operating activities	123,186	102,583
Net cash flows provided by used in investing activities	(123,188)	(148,679)
Net cash flows provided by financing activities		50,336
Net increase (decrease) in cash and cash equivalents	(2)	4,240
Cash and cash equivalents, beginning of period	2	6,489
Cash and cash equivalents, end of period		10,729
Intercompany eliminations
Subsidiary guarantees
Net cash flows provided by (used in) operating activities	26,921	(6,152)
Net increase (decrease) in cash and cash equivalents	(26,921)	(6,152)
Cash and cash equivalents, beginning of period	$ (26,921)	(13,906)
Cash and cash equivalents, end of period		$ (20,058)

Subsequent events (Details) $ in Millions	Jul. 12, 2012 USD ($)	Jun. 30, 2012 USD ($) MMBTU USDperunit	Dec. 31, 2011 USD ($)
Oil and natural gas properties located in Glasscock County, Texas
Subsequent events
Contract price \| $	$ 20.5
Natural gas derivatives
Subsequent events
Deferred premium liability \| $		$ 3.9	$ 5.4
Subsequent events \| Commodity derivatives
Subsequent events
Deferred premium liability \| $		$ 4.2
Subsequent events \| Natural gas derivatives \| January 2013 - December 2013 \| Collars
Subsequent events
Aggregate volumes (in Bbls) \| MMBTU		8,760,000
Floor price (in dollars per unit)		3.00
Ceiling price (in dollars per unit)		5.00
Subsequent events \| Natural gas derivatives \| January 2014 - December 2014 \| Collars
Subsequent events
Aggregate volumes (in Bbls) \| MMBTU		11,160,000
Floor price (in dollars per unit)		3.00
Ceiling price (in dollars per unit)		5.50
Subsequent events \| Natural gas derivatives \| January 2015 - December 2015 \| Collars
Subsequent events
Aggregate volumes (in Bbls) \| MMBTU		15,480,000
Floor price (in dollars per unit)		3.00
Ceiling price (in dollars per unit)		6.00

Supplementary information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Property acquisition costs:
Exploration	$ 22,219	$ 12,973	$ 51,686	$ 21,868
Development costs	232,508	160,747	427,599	312,390
Total costs incurred	254,727	173,720	479,285	334,258
Asset retirement obligations included in development costs	$ 1,400	$ 200	$ 2,300	$ 500