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This excerpt taken from the QRCP 10-Q filed May 12, 2008. Critical
Accounting Policies
The consolidated financial statements are prepared in conformity
with accounting principles generally accepted in the United
States. As such, we are required to make certain estimates,
judgments and assumptions that we believe are reasonable based
upon the information available. These estimates and assumptions
affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. A summary of
the significant accounting policies is contained in Note 2
to our consolidated financial statements. See also Item 7.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations — Critical Accounting
Policies and Estimates” in our 2007
Form 10-K.
These excerpts taken from the QRCP 10-K filed Jan 17, 2008. Critical Accounting Policies Certain amounts included in or affecting our consolidated financial statements and related disclosures must be estimated, requiring us to make certain assumptions with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts we report for assets and liabilities and our disclosure of contingent assets and liabilities at the date of our financial statements. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. In preparing our consolidated financial statements and related disclosures, we must use estimates in determining the economic useful lives of our assets, the fair values used to determine possible asset impairment charges, provisions for uncollectible accounts receivable, exposures under contractual indemnifications and various other recorded or disclosed amounts. However, we believe that certain accounting policies are of more significance in our consolidated financial statement preparation process than others, which policies are discussed following. See also Note 1 to the consolidated financial statements for a summary of our significant accounting policies. Critical Accounting Policies Certain amounts included in or affecting our consolidated financial statements and related disclosures must be estimated, requiring us to make certain assumptions with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts we report for assets and liabilities and our disclosure of contingent assets and liabilities at the date of our financial statements. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to In preparing our consolidated financial statements and related disclosures, we must use estimates in determining the economic useful lives of our assets, the fair values used to determine possible asset impairment charges, provisions for uncollectible accounts receivable, exposures under contractual indemnifications and various other recorded or disclosed amounts. However, we believe that certain accounting policies are of more significance in our consolidated financial statement preparation process than others, which policies are discussed following. See also Note 1 to the consolidated financial statements for a summary of our significant accounting policies. This excerpt taken from the QRCP 10-Q filed Aug 10, 2007. Critical Accounting Policies Certain amounts included in or affecting our consolidated financial statements and related disclosures must be estimated, requiring us to make certain assumptions with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts we report for assets and liabilities and our disclosure of contingent assets and liabilities at the date of our financial statements. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Our critical accounting policies are available in Item 7 of our Annual Report on Form 10-K/A for the year ended December 31, 2006. There have been no significant changes with respect to these policies during the first six months of 2007. This excerpt taken from the QRCP 10-Q filed Aug 9, 2007. Critical Accounting Policies Certain amounts included in or affecting our consolidated financial statements and related disclosures must be estimated, requiring us to make certain assumptions with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts we report for assets and liabilities and our disclosure of contingent assets and liabilities at the date of our financial statements. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Our critical accounting policies are available in Item 7 of our Annual Report on Form 10-K/A for the year ended December 31, 2006. There have been no significant changes with respect to these policies during the first six months of 2007. This excerpt taken from the QRCP 10-Q filed May 10, 2007. Critical Accounting Policies The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. A summary of the significant accounting policies is described in Note 1 to our consolidated financial statements. This excerpt taken from the QRCP 10-K filed May 3, 2007. Critical
Accounting Policies
Certain amounts included in or affecting our consolidated
financial statements and related disclosures must be estimated,
requiring us to make certain assumptions with respect to values
or conditions that cannot be known with certainty at the time
the financial statements are prepared. These estimates and
assumptions affect the amounts we report for assets and
liabilities and our disclosure of contingent assets and
liabilities at the date of our financial statements. We
routinely evaluate these estimates, utilizing historical
experience, consultation with experts and other methods we
consider reasonable in the particular circumstances.
Nevertheless, actual results may differ significantly from our
estimates. Any effects on our business, financial position or
results of operations resulting from revisions to these
estimates are recorded in the period in which the facts that
give rise to the revision become known.
In preparing our consolidated financial statements and related
disclosures, we must use estimates in determining the economic
useful lives of our assets, the fair values used to determine
possible asset impairment charges, provisions for uncollectible
accounts receivable, exposures under contractual
indemnifications and various other recorded or disclosed
amounts. However, we believe that certain accounting policies
are of more significance in our consolidated financial statement
preparation process than others, which policies are discussed
following. See also Note 1 to the consolidated financial
statements for a summary of our significant accounting policies.
Estimated Net Recoverable Quantities of Natural Gas and
Oil. We use the full cost method of
accounting for our natural gas and oil producing activities. The
full cost method inherently relies on the estimation of proved
reserves, both developed and undeveloped. The existence and the
estimated amount of proved reserves affect, among other things,
the amount and timing of costs depleted or amortized into income
and the presentation of supplemental information on oil and gas
producing activities. The expected future cash flows to be
generated by
Table of Contents
natural gas and oil producing properties used in testing for
impairment of such properties also rely in part on estimates of
net recoverable quantities of natural gas and oil.
Our estimation of net recoverable quantities of natural gas and
oil is a highly technical process. Independent natural gas and
oil consultants have reviewed the estimates of proved reserves
of natural gas and crude oil that we have attributed to our net
interest in natural gas and oil properties as of
December 31, 2006.
Proved reserves are the estimated quantities of natural gas and
oil that geologic and engineering data demonstrates with
reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating
conditions. Estimates of proved reserves may change, either
positively and negatively, as additional information becomes
available and as contractual, economic and political conditions
change.
Hedging Activities. We engage in a
hedging program to mitigate our exposure to fluctuations in
commodity prices and we believe that these hedges are generally
effective in realizing this objective. However, the accounting
standards regarding hedge accounting are very complex, and even
when we engage in hedging transactions that are effective
economically, these transactions may not be considered effective
for accounting purposes. Accordingly, our financial statements
may reflect some volatility due to these hedges, even when there
is no underlying economic impact at that point. Generally, the
financial statement volatility arises from an accounting
requirement to recognize changes in values of financial
instruments while not concurrently recognizing the values of the
underlying transactions being hedged.
In addition, it is not always possible for us to engage in a
hedging transaction that completely mitigates our exposure to
commodity prices. For example, when we purchase a commodity at
one location and sell it at another, we may be unable to hedge
completely our exposure to a differential in the price of the
product between these two locations. Even when we cannot enter
into a completely effective hedge, we often enter into hedges
that are not completely effective in those instances where we
believe to do so would be better than not hedging at all. Our
financial statements may reflect a gain or loss arising from an
exposure to commodity prices for which we are unable to enter
into a completely effective hedge.
Legal Matters. We are subject to
litigation and regulatory proceedings as a result of our
business operations and transactions. We utilize internal
personnel and external counsel in evaluating our potential
exposure to adverse outcomes from orders, judgments or
settlements. To the extent that actual outcomes differ from our
estimates, or additional facts and circumstances cause us to
revise our estimates, our earnings will be affected. We expense
legal costs as incurred, and all recorded legal liabilities are
revised as better information becomes available.
Environmental Matters. With respect to
our environmental exposure, we utilize both internal staff and
external experts to assist us in identifying environmental
issues and in estimating the costs and timing of remediation
efforts. We routinely conduct reviews of potential environmental
issues and claims that could impact our assets or operations.
Often, as the remediation evaluation and effort progresses,
additional information is obtained, requiring revisions to
estimated costs. These revisions are reflected in our income in
the period in which they are reasonably determinable.
This excerpt taken from the QRCP 10-K filed Mar 16, 2007. Critical
Accounting Policies
Certain amounts included in or affecting our consolidated
financial statements and related disclosures must be estimated,
requiring us to make certain assumptions with respect to values
or conditions that cannot be known with certainty at the time
the financial statements are prepared. These estimates and
assumptions affect the amounts we report for assets and
liabilities and our disclosure of contingent assets and
liabilities at the date of our financial statements. We
routinely evaluate these estimates, utilizing historical
experience, consultation with experts and other methods we
consider reasonable in the particular circumstances.
Nevertheless, actual results may differ significantly from our
estimates. Any effects on our business, financial position or
results of operations resulting from revisions to these
estimates are recorded in the period in which the facts that
give rise to the revision become known.
In preparing our consolidated financial statements and related
disclosures, we must use estimates in determining the economic
useful lives of our assets, the fair values used to determine
possible asset impairment charges, provisions for uncollectible
accounts receivable, exposures under contractual
indemnifications and various other recorded or disclosed
amounts. However, we believe that certain accounting policies
are of more significance in our consolidated financial statement
preparation process than others, which policies are discussed
following. See also Note 1 to the consolidated financial
statements for a summary of our significant accounting policies.
Estimated Net Recoverable Quantities of Natural Gas and
Oil. We use the full cost method of
accounting for our natural gas and oil producing activities. The
full cost method inherently relies on the estimation of proved
reserves, both developed and undeveloped. The existence and the
estimated amount of proved reserves affect, among other things,
the amount and timing of costs depleted or amortized into income
and the presentation of supplemental information on oil and gas
producing activities. The expected future cash flows to be
generated by
Table of Contents
natural gas and oil producing properties used in testing for
impairment of such properties also rely in part on estimates of
net recoverable quantities of natural gas and oil.
Our estimation of net recoverable quantities of natural gas and
oil is a highly technical process. Independent natural gas and
oil consultants have reviewed the estimates of proved reserves
of natural gas and crude oil that we have attributed to our net
interest in natural gas and oil properties as of
December 31, 2006.
Proved reserves are the estimated quantities of natural gas and
oil that geologic and engineering data demonstrates with
reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating
conditions. Estimates of proved reserves may change, either
positively and negatively, as additional information becomes
available and as contractual, economic and political conditions
change.
Hedging Activities. We engage in a
hedging program to mitigate our exposure to fluctuations in
commodity prices and we believe that these hedges are generally
effective in realizing this objective. However, the accounting
standards regarding hedge accounting are very complex, and even
when we engage in hedging transactions that are effective
economically, these transactions may not be considered effective
for accounting purposes. Accordingly, our financial statements
may reflect some volatility due to these hedges, even when there
is no underlying economic impact at that point. Generally, the
financial statement volatility arises from an accounting
requirement to recognize changes in values of financial
instruments while not concurrently recognizing the values of the
underlying transactions being hedged.
In addition, it is not always possible for us to engage in a
hedging transaction that completely mitigates our exposure to
commodity prices. For example, when we purchase a commodity at
one location and sell it at another, we may be unable to hedge
completely our exposure to a differential in the price of the
product between these two locations. Even when we cannot enter
into a completely effective hedge, we often enter into hedges
that are not completely effective in those instances where we
believe to do so would be better than not hedging at all. Our
financial statements may reflect a gain or loss arising from an
exposure to commodity prices for which we are unable to enter
into a completely effective hedge.
Legal Matters. We are subject to
litigation and regulatory proceedings as a result of our
business operations and transactions. We utilize internal
personnel and external counsel in evaluating our potential
exposure to adverse outcomes from orders, judgments or
settlements. To the extent that actual outcomes differ from our
estimates, or additional facts and circumstances cause us to
revise our estimates, our earnings will be affected. We expense
legal costs as incurred, and all recorded legal liabilities are
revised as better information becomes available.
Environmental Matters. With respect to
our environmental exposure, we utilize both internal staff and
external experts to assist us in identifying environmental
issues and in estimating the costs and timing of remediation
efforts. We routinely conduct reviews of potential environmental
issues and claims that could impact our assets or operations.
Often, as the remediation evaluation and effort progresses,
additional information is obtained, requiring revisions to
estimated costs. These revisions are reflected in our income in
the period in which they are reasonably determinable.
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