For the three year period ended December 31, 2004, our total adjusted costs for development, exploration and acquisition activities was approximately $136.8 million. Total exploration, development and acquisition activities for the three year period ended December 31, 2004 have added approximately 74.2 Bcfe of net proved reserves at an all-sources finding cost of $1.84 per Mcfe.

Our finding and development cost computation excludes net additions/reductions to total future development costs with respect to proved undeveloped properties necessary to convert those properties into proved developed properties of ($0.8), $0.7 and $39.8 million at December 31, 2002, 2003 and 2004, respectively, and includes total additions to proved undeveloped reserves of 3.7, 2.9 and 27.6 Bcfe for the years ended December 31, 2002, 2003 and 2004, respectively. Accordingly, had we included future development costs in our computations, the average all-sources finding costs would have been $1.82, $2.15 and $2.59 for the years ended December 31, 2002, 2003 and 2004, respectively.

Our all-source finding cost measure is a measure with limitations. Consistent with industry practice, our finding and development costs have historically fluctuated on a year-to-year basis based on a number of factors including the extent and timing of new discoveries and property acquisitions. Due to the timing of proved reserve additions and timing of the related costs incurred to find and develop our reserves, our all-sources finding cost measure often includes quantities of reserves for which a majority of the costs of development have not yet been incurred. Conversely, the measure also often includes costs to develop proved reserves that had been added in earlier years. Finding and development costs, as measured annually, may not be indicative of our ability to economically replace oil and natural gas reserves because the recognition of costs may not necessarily coincide with the addition of proved reserves. Our all-sources finding costs may also be calculated differently than the comparable measure for other oil and gas companies.

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.

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