Business Description

and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.” Business Operations Drilling for and producing oil and gas are high risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations. Our future financial condition and results of operations will depend on the success of our exploration, development and acquisition activities, which are subject to numerous risks beyond our control, including the risk that drilling will not result in commercially viable hydrocarbons. Our decisions to purchase, explore or develop prospects or properties will depend in part on the 23 Table of Contents evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. For a discussion of the uncertainty involved in these processes, see “—Reserves—Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.” In addition, our cost of drilling, completing and operating wells is subject to operational uncertainties. Further, many factors may curtail, delay or cancel our scheduled drilling projects, including the following: ● prolonged declines in natural gas, NGLs and oil prices; ● limitations in the market for natural gas, NGLs and oil; ● delays imposed by, or resulting from, compliance with regulatory requirements; ● pressure or irregularities in geological formations; ● shortages of, or delays in, obtaining equipment, qualified personnel or water for hydraulic fracturing activities; ● equipment failures or accidents; ● adverse weather conditions, such as blizzards, tornadoes, hurricanes and ice storms; ● issues related to compliance with environmental regulations; ● environmental hazards, such as natural gas leaks, oil spills, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface environment; ● limited availability of financing at acceptable terms; and ● mineral interest or other title problems. Certain of these risks can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, environmental contamination or loss of wells and regulatory fines or penalties. Properties that we decide to drill may not yield natural gas, NGLs or oil in commercially viable quantities, which may adversely affect our financial condition, results of operations and cash flows. Prior to drilling and testing a prospect, we are unable to predict with certainty whether any particular prospect will yield natural gas, NGLs or oil in sufficient quantities to recover drilling or completion costs or to be economically viable. Seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether natural gas or oil will be present or, if present, whether natural gas or oil will be present in commercial quantities. We cannot make any assurances that the analogies we draw from available data from other wells, more fully explored prospects or producing fields will be applicable to our drilling prospects. Further, our drilling operations may be curtailed, delayed or cancelled as a result of numerous factors, including: ● unexpected drilling conditions; ● mineral interest or other title problems; ● pressure or lost circulation in formations; ● equipment failure or accidents; ● adverse weather conditions; ● compliance with environmental and other governmental or contractual requirements; and ● increase in the cost of, or shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment and services. 24 Table of Contents Market conditions or operational impediments, such as the unavailability of satisfactory transportation arrangements or necessary infrastructure, may hinder our access to natural gas, NGLs and oil markets or delay our production.…