square miles of newly released 3-D seismic data licensed in early 2003, now covers significant areas of Liberty and Hardin Counties, Texas. Since January 1, 2000, we have been successful on six of eight wells drilled, including one Yegua well, one Frio well and five Cook Mountain wells. In 2002, we completed one well that produced an average of 9,787 Mcfe per day during the first 90 full days of production. We operate this well and own a 40% working interest. In 2003, we had another drilling success in this area with a well producing an average of 13,030 Mcfe per day during the first 90 full days of production. We operate this well and own a 46.3% working interest.

LOUISIANA AREA

The South Louisiana area primarily contains objectives in the Middle and Lower Miocene intervals. We have acquired licenses for approximately 1,850 square miles of 3-D data (including 1,416 square miles of newly released data delivered in 2003), and approximately 2,700 net acres of leasehold. The 3-D seismic data sets are concentrated in one general area including St. Mary, Terrebonne and LaFourche Parishes.

Currently, we have identified over eight exploratory drilling locations with an additional three potential extension locations in the South Louisiana area over which we have licenses for 3-D seismic data. Two of the eight exploratory locations we have identified are relatively lower risk and generally shallower with the other six being relatively higher risk and deeper with greater upside potential. From January 1, 2000 to December 31, 2003, we drilled and completed seven wells (1.7 net) on 14 attempts in this area. We incurred capital expenditures of $5.6 million and drilled three wells (0.7 net) in the South Louisiana area in 2003 and expect to devote approximately $8.9 million to drill five wells (2.5 net) in this area in 2004.

LaRose

During 2002, we successfully drilled and completed an offset well to the discovery well in this area. We operate the two wells and own a 40% working interest. The discovery well produced at an average of 15,581 Mcfe per day during the first 90 full days of production. We plan to participate in three to four additional wells (1.3 to 1.8 net) in the general area during 2004.

Patterson

In December 2003, we announced the discovery of Shadyside #1 well in this area, which logged over 77 feet of apparent net pay. The well commenced production during March 2004 and was producing 12,900 Mcf of natural gas and 245 barrels of oil (13,890 Mcfe) per day on March 25, 2004. We operate the well and have an approximate 35% working interest. We believe there are two potential extension wells in the Patterson area.

OTHER AREAS OF INTEREST

Our other areas of interest are contained in:

• East Texas, where we have our Camp Hill heavy oil project and our Tortuga Grande Cotton Valley prospect;
  
  
• the Barnett Shale trend in North Texas, a new area of interest in 2003 on which we have acquired leases on over 4,000 net acres and have participated in the drilling of six wells (2.6 net) as of December 31, 2003. Since that time, we have drilled another eight wells (4.0 net) and, through an $8.2 million acquisition (see "Barnett Shale Trend" below) along with an acreage leasing program, have increased our holdings in the trend by 5,800 gross acres (3,500 net) and 21 gross wells (6.7 net);
  
  
• coalbed methane interests in the Rocky Mountains, largely related to our minority interest in Pinnacle Gas Resources, Inc., a corporate joint venture formed with an affiliate of Credit Suisse First Boston in 2003; and
  
  
• our recently obtained offshore licenses to explore on approximately 210,000 acres in the U.K. North Sea, which we plan to promote to third parties and for which our estimated project commitments from commencement through mid-2005 are $0.9 million.

For 2004, we expect to obtain a mezzanine project facility to finance a majority of (1) the $8.2 acquisition in the Barnett Shale trend in February 2004 and (2) our exploration and development program in the Barnett Shale play in 2004 and 2005. With the mezzanine facility, our 2004 capital spending program in the Barnett Shale trend could be $20 to $30 million. For the remainder of our other areas of interest, we expect to spend less than $2.5 million total in these areas. We believe that each of these areas has

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