Royalty
interest. An interest in an oil and natural gas property entitling the owner
to a share of oil or natural gas production free of costs of production. 3-D
seismic data. Three-dimensional pictures of the subsurface created by collecting
and measuring the intensity and timing of sound waves transmitted into the earth
as they reflect back to the surface. Undeveloped
acreage. Lease acreage on which wells have not been drilled or completed to
a point that would permit the production of commercial quantities of oil and natural
gas regardless of whether such acreage contains proved reserves. Working
interest. The operating interest that gives the owner the right to drill,
produce and conduct operating activities on the property and a share of production.
Workover. Operations on a producing well to
restore or increase production. Item 3. Legal Proceedings
From time to time, we are party to certain legal
actions and claims arising in the ordinary course of business. While the outcome
of these events cannot be predicted with certainty, management does not expect
these matters to have a materially adverse effect on our financial position or
results of operations. Item 4. Submission of Matters
to a Vote of Security Holders None. Executive
Officers of the Registrant Pursuant to Instruction
3 to Item 401(b) of Regulation S-K and General Instruction G(3) to Form 10-K,
the following information is included in Part I of this Form 10-K/A. The
following table sets forth certain information with respect to our executive officers 
Set
forth below is a description of the backgrounds of each of our executive officers.
S.P. Johnson IV has served as our President
and Chief Executive Officer and a director since December 1993. Prior to that,
he worked for Shell Oil Company for 15 years. His managerial positions included
Operations Superintendent, Manager of Planning and Finance and Manager of Development
Engineering. Mr. Johnson is also a director of Basic Energy Services, Inc. (a
well servicing contractor). Mr. Johnson is a Registered Petroleum Engineer and
has a B.S. in Mechanical Engineering from the University of Colorado. Paul
F. Boling became our Chief Financial Officer, Vice President, Secretary and
Treasurer in August 2003. From 2001 to 2003, Mr. Boling was the Global Controller
for Resolution Performance Products, LLC, an international epoxy resins manufacturer.
From 1990 to 2001, Mr. Boling served in a number of financial and managerial positions
with Cabot Oil & Gas Corporation, serving most recently as Vice President, Finance.
Mr. Boling is a CPA and holds a B.B.A. from Baylor University. Gregory
E. Evans has served as Vice President of Exploration since March 2005. Prior
to joining us, Mr. Evans was Vice President North America Onshore Exploration
for Ocean Energy from 2001 to 2003. Prior to that time, he spent 19 years at Burlington
Resources where he served as Chief Geophysicist North America during 1999 to 2000,
Gulf of Mexico Deep Water Exploration Manager during 1998 to 1999 and Geoscience
Manager for the Western Gulf of Mexico Shelf during 1996 to 1998. Between 1982
to 1996, Mr. Evans held various other technical and managerial positions with
Burlington Resources, including Division Exploration Manager of both the Rocky
Mountain Region as well as the Gulf Coast area. Mr. Evans received a B. S. in
Geophysical Engineering from the Colorado School of Mines receiving the Cecil
H. Green award for outstanding geophysical student. | 
