During the year ended December 31, 2011 the Company recognized an impairment loss in its United States segment for $5.0 million to write down the value of its first Granite Wash formation well to its estimated fair value of $4.2 million. Mechanical problems with the well have impacted the estimation of recoverable reserves from the well and an impairment was warranted.

The initial measurement of these assets at fair value is calculated using discounted cash flow techniques and based on estimates of future revenues and costs associated with the Granite Wash formation well. Significant Level 3 assumptions associated with the calculation of discounted cash flows used in the impairment analysis include the Company's estimate of future crude oil and natural gas prices, production costs, development expenditures, and anticipated production of proved and probable reserves, appropriate risk-adjusted discount rates and other relevant data. For crude oil, estimates were based on NYMEX West Texas Intermediate prices, adjusted for quality, transportation fees, and a regional price differential. For natural gas, estimates were based on NYMEX Henry Hub prices, adjusted for energy content, transportation fees, and a regional price differential.