| timing of future
production of new reserves, it cannot be used as a measure of
value creation. The ratio does not distinguish between changes
in reserve quantities that are producing and those that will
require additional time and funding to begin producing. In that
regard, it might be noted that percentage of reserves that were
producing varied from 25.0% in 2006, to 19.1% in 2005 and to
17.2% in 2004. Set forth below is our reserve replacement ratio
for the years ended December 31, 2006, 2005 and 2004. |
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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 our sales of oil and natural gas for the periods indicated.
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______________
(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
The table below reconciles our calculation
of finding cost to our costs incurred in the purchase of proved
and unproved properties and in development and exploration
activities, excluding capitalized interest on unproved properties
of $10.0 million, $5.8 million and $2.9 million for the years
ended December 31, 2006, 2005 and 2004, respectively. We have
also included capitalized overhead in our finding cost of
$3.5 million, $2.1 million and $1.7 million for the years
ended December 31, 2006, 2005 and 2004, respectively. We have
also included non-cash asset retirement obligations of $0.3
million, $1.8 million and $0.5 million for the years ended
December 31, 2006, 2005 and 2004, respectively.
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