Strategy As an independent energy company en

Strategy

As an independent energy company engaged in the acquisition, development, production, and exploration of oil, gas and mineral properties located primarily in North America, our primary objective is to increase shareholder value through a strategy that includes:

Further exploitation of existing properties: We seek to add proven reserves and increase production through the use of advanced technologies including detailed reservoir engineering analysis, drilling development wells utilizing sophisticated techniques and selectively recompleting existing wells. We also focus on reducing the operating costs associated with our properties. We believe that the properties we have acquired have significant potential and in certain cases have not been fully developed in the past.

Property portfolio management: We will evaluate our property base to identify opportunities to divest non-core, higher cost or less productive properties with limited development potential. This strategy allows us to focus on a portfolio of core properties with significant potential to increase our proved reserves and production. Pursuit of strategic transactions: We continue review opportunities to acquire producing properties, leasehold acreage and drilling prospects. We seek negotiated transactions to acquire operational control of properties that we believe have significant exploitation and exploration potential. Our strategy includes a significant focus on increasing our holdings in fields and basins in which we already own an interest.

Maintenance of financial flexibility: We believe the Company should be structured and financed so that internally generated cash flows cover all operating expenses, general and administrative expense and interest expense, that drawn borrowing capacity should be used for lower risk development expenditures and that the capital markets should be used to fund acquisitions of producing properties and leasehold acreage, and to fund higher risk development and exploration activities.

Strategic alignment: We have secured through the alignment with our strategic partnerships a unique ability to analyze and operate both our existing properties and future potential acquisitions. When our domestic production has reached a critical mass, we plan to re-evaluate the suitability of adding an exploratory and/or International component to our strategy.