During 2011, 2010 and 2009, sales to ConocoPhillips accounted for 41%, 57% and 44%,
respectively, of our total revenues. During 2011, sales to Tesoro Corporation and Valero Energy
Corporation accounted for 13% and 11%, respectively, of our total revenues. The contract with Tesoro
Corporation expired in November 2011. We did not renew this contract, and upon expiration we
entered into a contract with ConocoPhillips for these volumes. During 2009, sales to Plains Marketing,
L.P., or PMLP, accounted for 22% of our total revenues. The contract with PMLP expired in November
2009, and we entered into contracts with purchasers who previously purchased through PMLP, the
most significant of which was ConocoPhillips. During 2011, 2010 and 2009, no other purchaser
accounted for more than 10% of our total revenues. The loss of any single significant customer or
contract could have a material adverse short-term effect; however, we do not believe that the loss of
any single significant customer or contract would materially affect our business in the long-term. We
believe such purchasers could be replaced by other purchasers under contracts with similar terms and
conditions. However, their role as the purchaser of a significant portion of our oil production does have
the potential to impact our overall exposure to credit risk, either positively or negatively, in that they
may be affected by changes in economic, industry or other conditions. We do not currently require
letters of credit or other collateral from the above stated purchasers to support trade receivables.
Accordingly, a material adverse change in a purchaser’s financial condition could adversely impact our
ability to collect the applicable receivables, and thereby affect our financial condition.
There are a limited number of alternative methods of transportation for our production.
Substantially all of our oil and gas production is transported by pipelines and trucks owned by third
parties. The inability or unwillingness of these parties to provide transportation services to us for a
reasonable fee could result in us having to find transportation alternatives, increased transportation
costs or involuntary curtailment of a significant portion of our oil and gas production which could have a
negative impact on future results of operations or cash flows.
Acreage
The following table sets forth information with respect to our developed and undeveloped acreage
as of December 31, 2011:
Developed Acres Undeveloped Acres
(1)
Gross Net Gross Net
California
Onshore . . . . . . . . . . . . . . . . . . 61,311 60,734
50,208 34,234
Offshore . . . . . . . . . . . . . . . . . . 43,335 39,062
-
-
Louisiana
Onshore . . . . . . . . . . . . . . . . . . 282,560 55,060 103,325 20,134
Offshore . . . . . . . . . . . . . . . . . .
5,670
1,323 567,947 189,286
Nevada . . . . . . . . . . . . . . . . . . . . .
-
-
217,431 217,431
Texas . . . . . . . . . . . . . . . . . . . . . . 116,481 72,230 103,959 50,511
Utah . . . . . . . . . . . . . . . . . . . . . . .
-
-
65,871 34,346
Wyoming . . . . . . . . . . . . . . . . . . . 72,340 14,342 200,132 174,105
Other states
(2)
. . . . . . . . . . . . . . .
2,884
316
9,387 7,050
584,581 243,067 1,318,260 727,097
(1) Approximately 21% of our total net undeveloped acres is covered by leases that expire from 2012 to 2014.
(2) Other states include Arkansas, Illinois, Kansas, Mississippi and Montana.
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