Allowances for bad debts – Quarterly, we evaluate our accounts receivable balances to confirm collectability.  When collectability is in doubt, we record an allowance against the accounts receivable and a corresponding income charge for bad debts, which appears in the Bad debt expense (recovery) and other line of the condensed statements of consolidated operations. The majority of our accounts receivable balances are with our joint venture partners, purchasers of our production and the government of Gabon for reimbursable Value-Added Tax (“VAT”). Collection efforts, including remedies provided for in the contracts, are pursued to collect overdue amounts owed to us.

In the three months ended March 31, 2016, we increased the allowance for VAT due from Gabon by $0.5 million. With respect to accounts with partners, in March 2016, Sonangol P&P paid its past-due balances plus interest, and we fully reversed the allowance of $7.6 million to reflect the recovery. There were no changes in the allowance for bad debts during the three months ended March 31, 2015. We are currently working with the government of Gabon to finalize a payment schedule for the reimbursement of past due VAT