Finding and Development Costs

   From inception through December 31, 2001, the Company has incurred total gross development, exploration and acquisition costs of approximately $137 million. Total exploration, development and acquisition activities from inception through December 31, 2001 have resulted in the addition of approximately 77.0 Bcfe, net to the Company's interest, of proved reserves at an average finding and development cost of $1.78 per Mcfe.

   The Company's finding and development costs have historically fluctuated on a year-to-year basis. Finding and development costs, as measured annually, may not be indicative of the Company's ability to economically replace oil and natural gas reserves because the recognition of costs may not necessarily coincide with the addition of proved reserves.

Development, Exploration and Acquisition Capital Expenditures

   The following table sets forth certain information regarding the gross costs incurred in the purchase of proved and unproved properties and in development and exploration activities.

Drilling Activity

   The following table sets forth the drilling activity of the Company for the years ended December 31, 1999, 2000 and 2001. In the table, "gross" refers to the total wells in which the Company has a working interest and "net" refers to gross wells multiplied by the Company's working interest therein. The Company's drilling activity from January 1, 1996 to December 31, 2001 has resulted in a commercial success rate of approximately 66 percent.