The FASB established the FASB Accounting Standards Codification
(Codification) as the source of authoritative U.S. generally accepted accounting principles (GAAP)
recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements issued for interim
and annual periods ending after September 15, 2009. The codification has changed the manner in which U.S. GAAP guidance is referenced,
but did not have an impact on the consolidated financial position, results of operations or cash flows of the Company
In January 2010, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update (ASU) 2010-06, Fair Value Measurements and Disclosures
(Topic 820) Improving Disclosures about Fair Value Measurements. This ASU requires some new disclosures and clarifies
some existing disclosure requirements about fair value measurement as set forth in Accounting Standards Codification (ASC)
820. ASU 2010-06 amends ASC 820 to now require: (1) a reporting entity should disclose separately the amounts of significant transfers
in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and (2) in the reconciliation
for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about
purchases, sales, issuances, and settlements. In addition, ASU 2010-06 clarifies the requirements of existing disclosures. ASU
2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures
are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early application
is permitted. The Company will comply with the additional disclosures required by this guidance upon its adoption in January 2010.
Also in January 2010, the FASB issued Accounting Standards
Update No. 2010-03, Extractive ActivitiesOil and GasOil and Gas Reserve Estimation and Disclosures.
This ASU amends the Extractive IndustriesOil and Gas Topic of the Codification to align the oil and gas reserve
estimation and disclosure requirements in this Topic with the SECs Release No. 33-8995, Modernization of Oil and
Gas Reporting Requirements (Final Rule), discussed below. The amendments are effective for annual reporting periods ending
on or after December 31, 2009, and the adoption of these provisions on December 31, 2009 did not have a material impact on our
consolidated financial statements.
On December 31, 2008, the Securities and Exchange Commission,
referred to in this report as the SEC, issued Release No. 33-8995, Modernization of Oil and Gas Reporting Requirements (Final
Rule), which revises the disclosures required by oil and gas companies. The SEC disclosure requirements for oil and gas
companies have been updated to include expanded disclosure for oil and gas activities, and certain definitions have also been changed
that will impact the determination of oil and gas reserve quantities. The provisions of this final rule are effective for registration
statements filed on or after January 1, 2010, and for annual reports for fiscal years ending on or after December 31, 2009.
In August 2009, the FASB issued ASU No. 2009-05, Fair
Value Measurements and Disclosures (Topic 820) Measuring Liabilities at Fair Value, related to fair value measurement
of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for an identical
liability is not available, a reporting entity is required to measure fair value using one or more valuation techniques. This guidance
is effective for the first reporting period beginning after issuance.
In June 2009, the FASB issued guidance under ASC 105, Generally
Accepted Accounting Principles. This guidance established a new hierarchy of GAAP sources for non-governmental entities
under the FASB Accounting Standards Codification. The Codification is the sole source for authoritative U.S. GAAP and supersedes
all accounting standards in U.S. GAAP, except for those issued by the SEC. The guidance was effective for financial statements
issued for reporting periods ending after September 15, 2009. The adoption had no impact on the Companys financial position,
cash flows or results of operations.
In May 2009, the FASB issued guidance under ASC 855 Subsequent
Events, which sets forth: (1) the period after the balance sheet date during which management of reporting entity should
evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances
under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements
and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The
guidance was effective on a prospective basis for interim or annual financial periods ending after June 15, 2009.
In April 2009, the FASB updated its guidance under ASC 820,
Fair Value Measurements and Disclosures, related to estimating fair value when the volume and level of activity for
an asset or liability have significantly decreased and identifying circumstances that indicate a transaction is not orderly. The
guidance was effective for interim and annual reporting periods ending after June 15, 2009 with early adoption permitted for periods
ending after March 15, 2009. The adoption of this guidance did not have any impact on the Companys results of operations.
Also in April 2009, the FASB updated its guidance under ASC 825, Financial Instruments, which requires disclosures
about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial
statements. This guidance also requires those disclosures in summarized financial information at interim reporting periods. The
guidance was effective for interim reporting periods ending after June 15, 2009 with early adoption permitted for periods ending
after March 15, 2009.