4. Restricted Deposits

Restricted deposits as of December 31, 2012 and 2011 consisted of funds escrowed for the future plugging and abandonment of certain oil and natural gas properties.

Pursuant to the Purchase and Sale Agreement with Total E&P, security for future plugging and abandonment of certain oil and natural gas properties is required either through bonds or payments to an escrow account or a combination. Monthly payments are made to an escrow account and these funds are returned once verification is made as to fulfilling the security amount requirements. We were in compliance with the security requirements as of December 31, 2012. See Note 16 for potential future security requirements.