Our Company

We are an independent exploration, development and production company that utilizes 3−D seismic imaging and other advanced technologies to systematically explore for and develop domestic onshore oil and natural gas reserves. We focus our exploration and development activities in provinces where we believe technology and the knowledge of our technical staff can be used effectively to maximize our return on invested capital by reducing drilling risk and enhancing our ability to grow reserves and production volumes. Our exploration and development activities are currently concentrated in four provinces: the Onshore Gulf Coast, the Anadarko Basin, the Rocky Mountains and West Texas.

We regularly evaluate opportunities to expand our activities to other areas that may offer attractive exploration and development potential, with a particular interest in those areas with plays that complement our current exploration, development and production activities. As a result of this strategy, during late 2005 and throughout 2006 we have been accumulating significant acreage positions in the Powder River Basin and the Williston Basin. Operations within these two basins are included in and constitute the bulk of our activity in our Rocky Mountains province. We also entered into two joint ventures in Southern Louisiana in 2006. We consider these joint ventures to be logical extensions of our prospect generating activities in the onshore Texas Gulf Coast.



Our Strategy

Our business strategy is to create value for our stockholders by growing reserves, production volumes and cash flow through exploration and development drilling in areas where we believe our operations will likely result in a high return on our invested capital. Key elements of our business strategy include:

          · Focus on Core Provinces and Trends.
          · Internally Generate Inventory of High Quality Exploratory Prospect.
          · Leverage our Operational Expertise.
          · Evaluate and Selectively Pursue New Potential Plays.
          · Capitalize on Exploration Successes Through Development of Field Discoveries.
          · Continue to Actively Drill Our Multi-Year Prospect Inventory.
          · Enhance Returns Through Operational Control.



Our People

Our experienced exploration staff includes 13 geologists, four geophysicists, one petrophysicist, two computer applications specialists and two geological technicians. Our geologists and geophysicists have varied but complementary backgrounds, and their diversity of experience in a wide-range of geological and geophysical settings, combined with various technical specializations (from hardware and systems to software and seismic data processing), provides us with valuable technical intellectual resources. Our geologists and geophysicists have an average of more than 21 years of experience in the industry. We have assembled our team of geologists and geophysicists with backgrounds that complement the areas where we focus our exploration and development activities. By integrating both geologic and geophysical expertise within our project teams, we believe we possess a competitive advantage in our exploration approach.

Our land department staff includes four landmen with an average of more than 23 years of experience, primarily within our core provinces, and three lease and division order analysts. Our land department contributed to pioneering many of the innovations that have facilitated exploration using large 3-D seismic projects.

Our operations staff includes seven engineers who have an average of over 12 years of experience in drilling, reservoir, environmental or operations engineering primarily within our four core operating provinces. These engineers work closely with our geologists and geophysicists and are integrally involved in all phases of the exploration and development process, including preparation of pre- and post-drill reserve estimates, well design, production management and analysis of full cycle risked drilling economics. We conduct field operations for our operated oil and natural gas properties through our field production superintendent and third party contract personnel.



Our Operations

Our 3−D seismic exploration and development activities are currently concentrated in three provinces: the Onshore Gulf Coast, the Anadarko Basin in Northwest Oklahoma and the Texas Panhandle and West Texas. We also regularly evaluate opportunities to expand our activities to other areas that may offer attractive exploration and development potential, with a particular interest in those areas with plays that complement our current exploration, development and production activities. Consequently, in early 2006, we acquired acreage in the Bakken play in North Dakota and constructed joint ventures with two operators in Southern Louisiana.



Our Assets

The following table provides information regarding our assets and operations located in our four provinces.