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| (1) | Excludes
capitalized interest on unproved properties of $2.9 million, $2.9 million and
$5.8 million for the years ended December 31, 2003, 2004 and 2005, respectively,
and includes capitalized overhead of $1.4 million, $1.7 million and $2.1 million
for the years ended December 31, 2003, 2004 and 2005, respectively. The table
also includes non-cash asset retirement obligations of $0.7 million and $0.5 million
and $1.8 million, respectively, for the years ended December 31, 2003, 2004 and
2005, respectively. |
Drilling Activity The
following table sets forth our drilling activity for the years ended December
31, 2003, 2004 and 2005. In the table, “gross” refers to the total wells in which
we have a working interest and “net” refers to gross wells multiplied by our working
interest therein. Our drilling activity from January 1, 1996 to December 31, 2005
has resulted in an apparent commercial success rate of approximately 76%. 
The
above table excludes 77 gross (29 net) wells drilled or acquired by CCBM through
2003, a majority of which were contributed to Pinnacle during 2003. The table
also excludes 12 gross (2.3 net) and six gross wells (1.1 net) drilled by CCBM
during 2004 and 2005, respectively. The wells contributed to Pinnacle are in various
stages of development and/or stages of production. The wells contributed to Pinnacle
are described in “Wyoming/Montana Coalbed Methane Project Area” above. Productive
Wells The following table sets forth the number
of productive oil and natural gas wells in which we owned an interest as of December
31, 2005. This table excludes all wells drilled or acquired by CCBM through 2003,
a majority of which were contributed to Pinnacle in that year. 
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