4. Restricted Deposits

Restricted deposits as of December 31, 2011 and 2010 consisted of funds escrowed for the future plugging and abandonment of certain oil and natural gas properties. We are not obligated to contribute additional amounts to these escrowed accounts, except for an arrangement with Total where we are required to make annual increases in the security amount.

The arrangement with Total requires security either through bonds or payments to an escrow account in accordance with the Purchase and Sale Agreement. Pursuant to the Purchase and Sale Agreement, monthly payments are made to an escrow account for our overriding royalty interests related to the Droshky field and these funds are returned once verification is made as to fulfilling the security requirements. In addition, funds are returned as asset retirement obligations are fulfilled. We were in compliance with the requirements as of December 31, 2011 and have provided funds to fulfill our security requirement for December 31, 2012. See Note 17 for future security requirements.