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CORRESP
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Response to Comment Letter

  MEMORANDUM

  FORM
    10-K FOR THE YEAR ENDED DECEMBER 31, 2006

  Contractual
    Obligations and Other Commitments, page 40

  1. In future filings
    please revise the tabular disclosure to include the estimated interest payments
    on long-term debt in the table or as a supplemental footnote. See Item 303(a)
    (5)(ii) of Regulation S-K and Section IV of SEC Release 33-8350.

    Response:

  In future filings,
    the Company will revise its tabular disclosure of contractual obligations
    and other commitments to include the estimated interest payments on long-term
    debt.

  Consolidated
    Balance Sheets, page F-4

  2. If you continue
    to present restricted cash please include a policy note disclosing the nature
    of the restriction and intended purpose for the funds. We notice there is
    relatively little change in the balances presented. If the funds are not intended
    to be used in the near term we would expect them to be excluded from current
    assets. See footnote 1 in paragraph 6 of Chapter 3 of ARB 43.

    Response:

   The restricted cash
    currently reflected on the Company’s balance sheets consists of funds
    related to a third party’s proportionate obligation in the plugging
    and abandonment of a particular oil and gas property operated by the Company’s
    Maritech Resources, Inc. (Maritech) subsidiary. This cash will remain restricted
    until such time as the associated plugging and abandonment project is completed.
    The associated liability for this plugging and abandonment project is included
    in current liabilities, as the work was estimated to be performed during 2007.
    In future filings, to the extent the Company has restricted cash which has
    yet to be applied to the completed plugging and abandonment project, the Company
    will include as part of its Significant Accounting Policies footnote a description
    of the purpose of the restricted cash and the nature of the restriction. The
    Company will also continue to classify such restricted cash as either current
    or long-term asset as appropriate based upon the timing of the Company’s
    expected usage of such restricted cash.

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  Consolidated
    Statement of Operations, page F-6

  3. Please tell us
    whether your rental revenues exceeded 10% of total revenues. See Regulation
    S-X Rule 5-03.01.

  Response:

   For the year ended
    December 31, 2006, rental revenues amounted to approximately 6.97% of total
    consolidated revenues. The Company will continue to monitor the level of rental
    revenues in the future and its compliance with Rule 5-03(b).

    Notes to Consolidated Financial Statements, page F-9

  Gas
    Balancing, page F-12

  4. If the receivable
    is recorded under the entitlement method please disclose if it is valued at
    the lower of: (a) the price in effect at the time of production, (b) current
    market price, or (c) if applicable, contract price.

    Response:

  The
    Company’s gas balancing receivables are associated with its Maritech
    subsidiary, which acquires mature oil and gas producing properties. Accordingly,
    gas balancing receivables generally represent balancing positions associated
    with acquired properties, and are initially valued at fair value based on
    expected actual future cash flows to be received. Changes in gas balancing
    receivables are recorded based on volumes over- or underproduced compared
    to Maritech’s entitled share, and are valued at the lower of the price
    in effect at time of production, current market price, or contract price,
    if applicable. In future filings, the Company proposes to revise its existing
    disclosure as follows:

  Gas
    Balancing

    As part of its acquisitions of producing properties, Maritech has acquired
    gas balancing receivables and payables related to certain properties. Maritech
    allocates value for any acquired gas balancing positions using estimated amounts
    expected to be received or paid in the future. Amounts related to under-produced
    volume positions acquired are reflected as assets and amounts related to overproduced
    volume positions acquired are reflected as liabilities. At December 31, 2006
    and 2005, the Company reflected a gas balancing receivable of $3.3 million
    and $3.2 million, respectively, in accounts receivable or other long-term
    assets and a gas balancing payable of $6.9 million and $3.1 million, respectively,
    in accrued liabilities or other long-term liabilities. Following the acquisition
    of a property, Maritech accounts for gas sales revenue from such property
    based on its entitled share of total monthly production, with any monthly
    over- or under-production taken as an adjustment to the gas balancing receivable
    or payable, valued at the lower of the price in effect at time of production,
    current market price, or contract price, if applicable.

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  Environmental
    Liabilities, page F-14

  5. You disclose that
    you accrue loss estimates when both criteria in paragraph 8 of SFAS No. 5
    are met. You do not address your policy with respect to disclosure of losses
    in excess of amounts recorded when there is a reasonable possibility that
    additional loss may have been incurred. See paragraphs 13 through 16 of SOP
    94-6. Please expand your policy to include this as well as disclose the underlying
    judgments and assumptions considered by management when assessing the measurement
    and recognition of recorded and unrecorded environmental remediation liabilities.
    See the bullet points in Question 2 to SAB Topic 5Y. Please include an example
    of your revised disclosures in your response.

  Response:

  The
    Company has reviewed and given due consideration of the disclosure provisions
    of paragraph 8 of SFAS No. 5, paragraphs 13 through 16 of AICPA SOP 94-6,
    and Question 2 to SAB Topic 5Y. Set forth below are the Company’s proposed
    revisions to its Significant
    Accounting Policy footnote discussion of environmental liabilities. With respect
    to the judgments and assumptions considered by management when assessing the
    measurement and recognition of recorded and unrecorded environmental remediation
    liabilities, the revised disclosure reflects the material factors which are
    considered relevant to the Company’s circumstances. Please also refer
    to Note J – Commitments and Contingencies on page F-27 of its Form 10-K,
    which includes a more specific discussion of the Company’s existing
    environmental liability, in which the range of reasonably possible future
    costs is disclosed. In light of this additional disclosure in Note J, and
    the low materiality level of the Company’s possible environmental exposure,
    the Company respectfully requests that the revised disclosure below be incorporated
    into future filings, beginning with its September 30, 2007 Form 10-Q, rather
    than amending its previous Form 10-K.

  Environmental
    Liabilities

    Environmental expenditures which result in additions to property and equipment
    are capitalized, while other environmental expenditures are expensed. Environmental
    remediation liabilities are recorded on an undiscounted basis when environmental
    assessments or cleanups are probable and the costs can be reasonably estimated.
    Estimates of future environmental remediation expenditures often consist
    of a range of possible expenditure amounts, a portion of which may be in excess
    of amounts of liabilities recorded. In this instance, the Company discloses
    the full range of amounts reasonably possible of being incurred. Any changes
    or developments in environmental remediation efforts are accounted for and
    disclosed each quarter as they occur. These costs are adjusted as further
    information develops or circumstances change. Any recoveries of environmental
    remediation costs from other parties are recorded as assets when their receipt
    is deemed probable.

    Complexities involving environmental remediation efforts can cause the
    estimates of the associated liability to be imprecise. Factors which cause
    uncertainties regarding the estimation of future expenditures include, but
    are not limited to, the effectiveness of the anticipated work plans in achieving
    targeted results and changes in the desired remediation methods and outcomes
    as prescribed by regulatory agencies. Uncertainties associated with environmental
    remediation contingencies are pervasive and often result in wide ranges of
    reasonably possible outcomes. Estimates developed in the early stages of remediation
    can vary significantly. Normally, a finite estimate of cost does not become
    fixed and determinable at a specific point in time. Rather, the costs associated
    with environmental

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	remediation become estimable as the work is performed and
    the range of ultimate cost becomes more defined. It is possible that cash
    flows and results of operations could be materially affected by the impact
    of the ultimate resolution of these contingencies.

    Revenue Recognition, page F-14

 6. We note
    that you recognize revenues based upon the percentage of completion method.
    Please provide the disclosures required by Regulation S-X Rule 5-02.3(c).

    Response:

   Revenues
    recognized under the percentage of completion method of accounting are related
    to certain turnkey contracts of the Company’s well abandonment and decommissioning
    businesses, which generally consist of short-term projects of two to three
    months in length. Accounts receivable from accrued percentage of completion
    revenues totaled approximately $8,617,000 as of December 31, 2006, or approximately
    3.54% of consolidated receivables (1.10% of consolidated revenues). The Company
    did not consider the foregoing amount to be material and accordingly did not
    include the disclosures
    under Rule 5-02.3(c). Such accrued amounts are generally not billable to the
    customer until such time as the project is completed.

  In future
    filings, in the event accrued percentage of completion revenues are material,
    the Company will include a revised disclosure similar to the following:

    Revenue Recognition

    Revenues are recognized when finished products are shipped or services have
    been provided to unaffiliated customers and only when collectibility is reasonably
    assured. Sales terms for the Company’s products are FOB shipping point,
    with title transferring at the point of shipment. Revenue is recognized at
    the point of transfer of title. The Company recognizes oil and gas revenues
    from its interests in producing wells as oil and natural gas is produced and
    sold from those wells and includes such revenues in product sales revenues.
    Oil and natural gas sold is not significantly different from the Company’s
    share of production.

    With regard to turnkey contracts, revenues are recognized on the percentage-of-completion
    method based on the ratio of costs incurred to total estimated costs at completion.
    Total project revenue and cost estimates for turnkey contracts are reviewed
    periodically as work progresses, and adjustments are reflected in the period
    in which such estimates are revised. Provisions for estimated losses on such
    contracts are made in the period such losses are determined. As of December
    31, 2006, accrued and unbilled revenues pursuant to turnkey contracts accounted
    for under the percentage-of-completion method and included in accounts receivable
    totaled $8.6 million. All of these amounts included in accounts receivable
    are expected to be collected within one year. A portion of the Company’s
    well abandonment and decommissioning services operations are provided pursuant
    to turnkey contracts, and generally such projects are completed within six
    months of inception. Revenues are generally not billable to customers until
    after each project is completed.

  Note
    D – Acquisitions and Dispositions, page F-18

  7. We note
    that you have not provided pro forma information with respect to your acquisitions
    that you closed in the most recent fiscal year. Please confirm to us that
    the

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	pro forma results of operations for 2006 would not have been materially
    different from actual historical results of operations. See SFAS 141 paragraph
    54.

  Response:

  The Company’s
    two most significant acquisitions during 2006 were consummated during the
    first quarter of the year. Accordingly, pro forma results of operations, assuming
    all acquisitions were consummated as of January 1, 2006, would not be materially
    different (less than 2% increase in net income) from actual results.

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