We believe our historical success is, and future performance will be, directly related to the following combination of strengths that enable us to implement our strategy:

• Experienced executive and technical team. The members of our executive and technical team have an average of more than 28 years of experience in the oil and gas industry and significant experience in building and managing independent oil and gas companies. The majority of our executive and technical team have spent their entire careers developing unconventional gas and oil properties. Our team has a proven record of analyzing complex structural and stratigraphic formations using 3-D seismic and geological techniques, producing and optimizing gas reservoirs and drilling, and completing unconventional gas reservoirs.

• Low-risk, multi-year drilling inventory. We have identified 950 drillable, low- to moderate-risk locations on our West Texas and East Texas properties, providing us with approximately 10 years of drilling inventory at our current drilling rate. Our technical team's ability to locate and execute on repeatable low-risk drilling opportunities in our large and productive West Texas acreage holdings has helped us to achieve a drilling success rate of 94% since our inception.

• Stable producing asset base. We own an operated asset base comprised of long-lived reserves. Approximately 85% of our proved reserves are gas. These properties should produce stable cash flows to fund our development, exploitation and exploration opportunities.

• Large acreage positions. We are a significant acreage holder in three of our primary operating areas and have an aggregate leasehold position of 278,556 gross (194,637 net) acres. We believe we have assembled a portfolio of properties, both in prolific producing gas and oil fields and in under-explored reservoirs, that would be difficult to replicate.

• Operated asset base. We operate substantially all of our estimated reserves. By maintaining operating control, we are able to more effectively control our expenses, capital allocation, and the timing and method of exploitation and development of our properties.

• Financial flexibility. As of August 31,2008, we had $20 million of long-term debt and $100.0 million available for borrowings under our revolving credit facility, providing us with significant financial flexibility to pursue our business strategy.

• Control of gathering infrastructure and gas marketing. We own and operate approximately 140 miles of gas gathering lines in West Texas. Owning and operating this infrastructure allows us to maintain greater control of our gathering pressures and to minimize downtime associated with the system.