VOLUMES, PRICES AND OIL & NATURAL GAS OPERATING EXPENSE

The following table sets forth certain information regarding the production volumes of, average sales prices received for and average production costs associated with the Company's sales of oil and natural gas for the periods indicated. The table includes the cash impact of hedging activities and the effect of certain hedge positions with an affiliate of Enron Corp. reclassified as derivatives during November 2001.

(1) Includes direct lifting costs (labor, repairs and maintenance, materials and supplies), workover costs and the       administrative costs of production offices, insurance and property and severance taxes.

FINDING AND DEVELOPMENT COSTS

From inception through December 31, 2002, the Company has incurred total gross development, exploration and acquisition costs of approximately $153.5 million. Total exploration, development and acquisition activities from inception through December 31, 2002 have resulted in the addition of approximately 82.5 Bcfe, net to the Company's interest, of proved reserves at an average finding and development cost of $1.86 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.

(1) Excludes capitalized interest on unproved properties of $3.6 million, $3.2 million and $3.1 million for the years ended       December 31, 2000, 2001 and 2002, respectively.

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