Property Highlights

PERMIAN

A / Southeast New Mexico

Profile

  • 75% average working interest in 548,000 acres.
  • Key fields include Ingle Wells, Catclaw Draw, Potato Basin, Red Lake, Gaucho, and Outland.
  • Produces oil and gas from multiple formations at 1,500' to 16,500'.
  • 44.0 million barrels of oil-equivalent reserves at 12/31/07.

2007 Activity

  • Drilled and completed 22 gas wells.
  • Drilled and completed 54 oil wells.
  • Recompleted 69 wells.

2008 Plans

  • Drill 29 gas wells.
  • Drill 46 oil wells.
  • Recomplete 35 wells.

B / West Texas

Profile

  • 40% average working interest in 1.1 million acres.
  • Key fields include Wasson, Reeves and Anton-Irish to the north; Ozona, Keystone/Kermit, McKnight and Waddell to the south.
  • Produces oil and gas from multiple formations at 2,500' to 18,000'.
  • 112.3 million barrels of oil-equivalent reserves at 12/31/07.

2007 Activity

  • Drilled and completed 3 gas wells.
  • Drilled and completed 25 oil wells.
  • Recompleted 54 wells.
  • Reactivated 22 wells.

2008 Plans

  • Drill 2 gas wells.
  • Drill 35 oil wells.
  • Recomplete 53 wells.
  • Reactivate 22 wells.
  • Initiate enhanced oil recovery with CO2 at Reeves Unit.

MID-CONTINENT

A / Woodford Shale

Profile

  • 54,000 net acres in the Arkoma Basin in eastern Oklahoma.
  • Operated working interests range from 40% to 100%.
  • Unconventional natural gas play.
  • Produces gas from the Woodford Shale formation at 6,000' to 8,000'.
  • 26.6 million barrels of oil-equivalent reserves at 12/31/07.

2007 Activity

  • Drilled and completed 89 horizontal wells (39 operated).
  • Drilling focused on acreage evaluation and holding leases by establishing production.
  • Finalized acquisition of 3-D seismic.
  • Divested non-core acreage.

2008 Plans

  • Drill 109 horizontal wells (57 operated).
  • Reprocess and merge 3-D seismic data.
  • Expand gas gathering system capacity.
  • Complete construction of 200 million cubic feet per day gas plant.

B / Barnett Shale

Profile

  • 727,000 net acres in the Forth Worth Basin of north Texas.
  • > 90% average working interest.
  • Includes >3,200 producing wells.
  • Produces gas from the Barnett Shale formation at 6,500' to 9,200'.
  • Largest producer in the state's largest natural gas field.
  • 724.1 million barrels of oil-equivalent reserves at 12/31/07.

2007 Activity

  • Drilled and completed 539 wells.
  • Increased 2007 net production 33% over 2006.
  • Continued 80 surface acre infill program.
  • Began 40 surface acre infill pilot.
  • Continued to improve drilling efficiencies with new generation rigs.
  • Acquired 3-D seismic.

2008 Plans

  • Drill 500 — 600 wells.
  • Continue to develop viable areas with 40 surface acre infill program.
  • Initiate 20 surface acre infill pilot in selected areas.
  • Re-fracture selected horizontal wells.
  • Evaluate western acreage for future expansion.
  • Acquire additional 3-D seismic and acreage.
  • Continue to expand gas gathering system and reduce line pressure.
  • Complete construction of 100 million cubic feet per day gas plant.
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