The Company’s unconventional oil and natural gas projects include CBM gas development, basin-centered tight gas sand plays and shale plays. The Company has active unconventional resource development projects located in the Powder River and Piceance Basins in the Rocky Mountains and in the Cotton Valley and Travis Peak trends in East Texas and active conventional exploration and development projects located in the Big Horn Basin in the Rocky Mountains. The Company also has unconventional prospects in the Williston Basin in Montana and North Dakota and in the Fayetteville Shale trend in Arkansas and Mississippi that are in the exploration and development planning stage.
The Company’s Powder River Basin properties are located in northeastern Wyoming. The Company’s development operations in this basin are focused on CBM plays in the Gas Draw/Harris, Jepson and Beaver Creek project areas. Initially, CBM wells typically produce water in a process called dewatering. This process lowers pressure, allowing the gas to flow to the wellbore. As the coal seam pressure declines, the wells begin producing methane gas at an increasing rate. As the wells mature, the production peaks, stabilizes and then begins declining. The average life of a CBM well in the Powder River Basin ranges from five to 15 years. While these wells generally produce at much lower rates with fewer reserves attributed to them when compared to conventional natural gas wells in the Rocky Mountains, they also typically have higher drilling success rates and lower costs.
The Company’s Piceance Basin properties are located in northwestern Colorado and represent an important part of its development and exploration activities and expected production growth in 2006. The Company’s project area is located approximately 45 miles northwest of Aspen and targets production from the Mesaverde formation. The Mesaverde is a thick, tight sandstone appearing at depths ranging from 7,000 to 9,000 feet. Wells drilled into the Mesaverde require high pressure fracture stimulation to achieve production. As of December 31, 2005, the Company held interests in approximately 69,500 gross (45,100 net) leasehold acres, predominantly on federal lands.
The Company’s East Texas Basin properties are located in Smith and Cherokee counties in proximity to the Overton Field. The Company’s two project areas focus on tight gas sand plays, targeting production from the Cotton Valley and Travis Peak intervals. The Cotton Valley and Travis Peak formations are found at depths ranging from 9,000 to 14,000 feet on its acreage. As of December 31, 2005, the Company held interests in approximately 45,900 gross (14,400 net) leasehold acres. The Company intends to target depths of approximately 12,000 feet, but there are also deeper and shallower targets including the Bossier, Rodessa and Petit formations.
The Company’s Big Horn Basin properties are located in northwest Wyoming. The Company’s primary zones of interest are the Frontier, Mowry and Dakota formations. The Company’s initial activities have been focused in the Bennett Creek project area. The Company has three additional projects in the basin, the Clark 3-D, Bison Ranch and Heart Mountain project areas.
The Company’s acreage in the Williston Basin is located in western North Dakota and eastern Montana and represents a new focus area for its development activities and expected production growth in 2006. It is predominantly an oil basin and produces from 11 major geologic horizons that range in depth from approximately 1,000 to over 14,000 feet. The Company’s activities in this basin will include both exploration and development drilling programs located in several areas, including the Bakken Shale.
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- Value Gap 
- Short-Term Growth
- Long-Term Growth 
- Long-Term Value 
