Expenses

Lease Operating Expense

For the three months ended March 31, 2013, lease operating expense (LOE) decreased by $4.7 million to $6.7 million ($51.89 per Bbl) from $11.4 million ($34.02 per Bbl) for the same period in 2012. 

Reduced LOE expenses are primarily due to the sale of a 49% interest in Block Z-1 of $5.6 million.

Excluding the impact of the sale, LOE increased by $0.9 million as workover expenses increased by a net $2.0 million due to Block Z-1 workover activity. This was partially offset by lower net repairs and maintenance expenses, crude oil transportation expense, contract services expense, and other LOE.

General and Administrative Expense

For the three months ended March 31, 2013, general and administrative (G&A) expenses decreased by $0.7 million, or 11%, to $5.5 million from $6.2 million for the same period in 2012. Stock-based compensation expense, a subset of G&A expenses, was $0.7 million for the three months ended March 31, 2012 and for the same period in 2013.

G&A expenses, excluding stock-based compensation, decreased $0.7 million to $4.8 million from $5.5 million for the same period in 2012, mainly due to lower legal costs.

Geological, Geophysical and Engineering (GG&E)

For the three months ended March 31, 2013, GG&E expenses decreased $24.8 million to $0.4 million compared to $25.2 million for the same period in 2012. Seismic acquisition expenses at Block Z-1 during 2012 were for the Company's account, and in 2013 funding of seismic expenses in Block Z-1 was for the account of its joint venture partner, Pacific Rubiales Energy Corp. The 3D seismic acquisition on Block Z-1 was substantially completed during first quarter 2013, while processing and interpretation continues.

Depreciation, Depletion and Amortization Expense

For the three months ended March 31, 2013, depreciation, depletion and amortization expense decreased $4.6 million to $6.9 million from $11.5 million for the same period in 2012. 

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