Amplify Energy Corp. (AMPY) 2014年年度報告「NYSE」.pdf

《Amplify Energy Corp. (AMPY) 2014年年度報告「NYSE」.pdf》由會員分享，可在線閱讀，更多相關《Amplify Energy Corp. (AMPY) 2014年年度報告「NYSE」.pdf（180頁珍藏版）》請在三個皮匠報告上搜索。

1、 Use these links to rapidly review the document MIDSTATES PETROLEUM COMPANY,INC.TABLE OF CONTENTS MIDSTATES PETROLEUM COMPANY,INC.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 Form 10-K Commission File Number:001-35

2、512 MIDSTATES PETROLEUM COMPANY,INC.(Exact name of registrant as specified in its charter)Registrants telephone number,including area code:(918)974-8550 Securities registered pursuant to Section 12(b)of the Act:Securities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if

3、the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes?No?Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes?No?Indicate by check mark whether the registrant(1)has filed all reports r

4、equired to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes?No?Indicate by check mark whet

5、her the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was

6、 required to submit and post such files).Yes?No?Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by refere

7、nce in Part III or any amendment to the Form 10-K?Delaware (State or other jurisdiction of incorporation or organization)45-3691816 (I.R.S.Employer Identification No.)321 South Boston,Suite 1000 Tulsa,Oklahoma (Address of principal executive offices)74103 (Zip Code)Common stock,$0.01 par value New Y

8、ork Stock Exchange(Title of each class)(Name of each exchange on which registered)?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2014 OR?TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

9、 For the transition period from to .Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See definition of large accelerated filer,accelerated filer and smaller reporting company in Rule 12b-2 of the Ex

10、change Act.Check one:Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes?No?The aggregate market value of the registrants Common Stock held by non-affiliates of the registrant was approximately$272 million based upon the closing price of

11、 such stock on June 30,2014,the last business day of the registrants most recently completed second fiscal quarter,of$7.23 per share.The number of shares outstanding of our stock at March 9,2015 is shown below:DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive Proxy Statement of Midstate

12、s Petroleum Company,Inc.for the Annual Meeting of Shareholders to be held in May 2015,which will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year,are incorporated by reference into Part III of this Annual Report on Form 10-K.Class Number of shares

13、 outstanding Common stock,$0.01 par value 72,196,132 Large accelerated filer?Accelerated filer?Non-accelerated filer?(Do not check if a smaller reporting company)Smaller reporting company?Table of Contents MIDSTATES PETROLEUM COMPANY,INC.TABLE OF CONTENTS 2 Item Page PART I 1.BUSINESS 6 1A.RISK FACT

14、ORS 32 1B.UNRESOLVED STAFF COMMENTS 55 2.PROPERTIES 55 3.LEGAL PROCEEDINGS 55 4.MINE SAFETY DISCLOSURES 55 PART II 5.MARKET FOR THE REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 56 6.SELECTED FINANCIAL DATA 57 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF

15、 FINANCIAL CONDITION AND RESULTS OF OPERATIONS 60 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 84 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 86 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 86 9A.CONTROLS AND PROCEDURES 86 9B.OTHER INFORMA

16、TION 89 PART III 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 89 11.EXECUTIVE COMPENSATION 89 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 89 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE 89 14.PRINCIPAL A

17、CCOUNTING FEES AND SERVICES 89 PART IV 15.EXHIBITS,FINANCIAL STATEMENT SCHEDULES 89 Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements that are subject to a number of risks and uncertainties,many of which are bey

18、ond our control.All statements other than statements of historical fact included in this annual report are forward-looking statements,including,without limitation,statements regarding our strategy,future operations,financial position,estimated revenues and losses,projected costs,prospects,plans and

19、objectives of management.When used in this annual report,the words could,believe,anticipate,intend,estimate,expect,may,continue,predict,potential,project and similar expressions are intended to identify forward-looking statements,although not all forward-looking statements contain such identifying w

20、ords.Forward-looking statements may include statements about our:business strategy;estimated future net reserves and present value thereof;technology;financial condition,revenues,cash flows and expenses;levels of indebtedness,liquidity and compliance with debt covenants;financial strategy,budget,pro

21、jections and operating results;oil and natural gas realized prices;timing and amount of future production of oil and natural gas;availability of drilling and production equipment;availability of oilfield labor;availability of third party natural gas gathering and processing capacity;the amount,natur

22、e and timing of capital expenditures,including future development costs;availability and terms of capital;drilling of wells,including our identified drilling locations;successful results from our identified drilling locations;marketing of oil and natural gas;the integration and benefits of asset and

23、 property acquisitions or the effects of asset and property acquisitions or dispositions on our cash position and levels of indebtedness;infrastructure for salt water disposal and electricity;sources of electricity utilized in operations and the related infrastructures;costs of developing our proper

24、ties and conducting other operations;general economic conditions;effectiveness of our risk management activities;environmental liabilities;counterparty credit risk;the outcome of pending and future litigation;governmental regulation and taxation of the oil and natural gas industry;3 Table of Content

25、s developments in oil-producing and natural gas-producing countries;uncertainty regarding our future operating results;and plans,objectives,expectations and intentions contained in this annual report that are not historical.All forward-looking statements speak only as of the date of this annual repo

26、rt.You should not place undue reliance on these forward-looking statements.These forward-looking statements are subject to a number of risks,uncertainties and assumptions.Although we believe that our plans,intentions and expectations reflected in or suggested by the forward-looking statements we mak

27、e in this annual report are reasonable,we can give no assurance that these plans,intentions or expectations will be achieved or occur,and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.We disclose important factors that could

28、cause our actual results to differ materially from our expectations under Risk Factors and elsewhere in this annual report.These factors include:variations in the market demand for,and prices of,oil,natural gas liquids and natural gas;uncertainties about our estimated quantities of oil and natural g

29、as reserves;the adequacy of our capital resources and liquidity including,but not limited to,access to additional borrowing capacity under our revolving credit facility;access to capital and general economic and business conditions;uncertainties about our ability to replace reserves and economically

30、 develop our current reserves;risks in connection with acquisitions;risks related to the concentration of our operations onshore in Oklahoma,Texas and Louisiana;drilling results;the potential adoption of new governmental regulations;and our ability to satisfy future cash obligations and environmenta

31、l costs.These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.Moreover,we operate in a very competitive and rapidly changing environment.The price of oil and natural gas declined significantly in late 2014 and early 2015.Any continued o

32、r extended decline in oil and natural gas prices could have a material adverse effect on our financial position,results of operations,cash flows and access to capital.New risks emerge from time to time.It is not possible for our management to predict all risks,nor can we assess the impact of all fac

33、tors on our business or the extent to which any factor,or combination of factors,may cause actual results to differ materially from those contained in any forward-looking statements we may make.Reserve engineering is a process of estimating underground accumulations of oil and natural gas that canno

34、t be measured in an exact way.The accuracy of any reserve estimate depends on the quality of available data,the interpretation of such data and price and cost assumptions made by our reserve engineers.In addition,the results of drilling,testing and production activities may justify revisions of esti

35、mates that were made previously.If significant,such revisions would change the schedule of any further production and development drilling.Accordingly,reserve estimates may differ from the quantities of oil and natural gas that are ultimately recovered.4 Table of Contents GLOSSARY OF OIL AND NATURAL

36、 GAS TERMS Bbl:One stock tank barrel,of 42 U.S.gallons liquid volume,used herein in reference to oil,condensate or natural gas liquids.Boe:Barrels of oil equivalent,with 6,000 cubic feet of natural gas being equivalent to one barrel of oil.Boe/day:Barrels of oil equivalent per day.Completion:The pro

37、cess of treating a drilled well followed by the installation of permanent equipment for the production of natural gas or oil,or in the case of a dry hole,the reporting of abandonment to the appropriate agency.Dry hole:A well found to be incapable of producing hydrocarbons in sufficient quantities su

38、ch that proceeds from the sale of such production do not exceed production expenses and taxes.Exploratory well:A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of natural gas or oil in another reservoir.MMBoe:One million barrels of oil equiva

39、lent.MMBtu:One million British thermal units.Net acres:The percentage of total acres an owner has out of a particular number of acres,or a specified tract.An owner who has 50%interest in 100 acres owns 50 net acres.NYMEX:The New York Mercantile Exchange.Proved reserves:Those quantities of oil and ga

40、s,which,by analysis of geoscience and engineering data,can be estimated with reasonable certainty to be economically produciblefrom a given date forward,from known reservoirs,and under existing economic conditions,operating methods,and government regulationsprior to the time at which contracts provi

41、ding the right to operate expire,unless evidence indicates that renewal is reasonably certain,regardless of whether deterministic or probabilistic methods are used for the estimation.The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will c

42、ommence the project within a reasonable time.The area of the reservoir considered as proved includes(i)the area identified by drilling and limited by fluid contacts,if any,and(ii)adjacent undrilled portions of the reservoir that can,with reasonable certainty,be judged to be continuous with it and to

43、 contain economically producible oil or gas on the basis of available geoscience and engineering data.In the absence of data on fluid contacts,proved quantities in a reservoir are limited by the lowest known hydrocarbons,as seen in a well penetration unless geoscience,engineering,or performance data

44、 and reliable technology establishes a lower contact with reasonable certainty.Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated gas cap,proved oil reserves may be assigned in the structurally higher portions of the r

45、eservoir only if geoscience,engineering,or performance data and reliable technology establish the higher contact with reasonable certainty.Reserves which can be produced economically through application of improved recovery techniques(including,but not limited to,fluid injection)are included in the

46、proved classification when(i)successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole,the operation of an installed program in the reservoir or an analogous reservoir,or other evidence using reliable technology establishes t

47、he reasonable certainty of the engineering analysis on which the project or program was based;and(ii)the project has been approved for development by all necessary parties and entities,including governmental entities.Existing economic conditions include prices and costs at which economic producibili

48、ty from a reservoir is to be determined.The price is the average price during the 12-month period prior to the ending date of the 5 Table of Contents period covered by the report,determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period,unle

49、ss prices are defined by contractual arrangements,excluding escalations based upon future conditions.Reasonable certainty:A high degree of confidence.Recompletion:The process of re-entering an existing wellbore that is either producing or not producing and completing new reservoirs in an attempt to

50、establish or increase existing production.Reserves:Estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible as of a given date by application of development projects to known accumulations.Reservoir:A porous and permeable underground form

51、ation containing a natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.Spud or Spudding:The commencement of drilling operations of a new well.Wellbore:The hole drilled by the bit that is

52、 equipped for oil or gas production on a completed well.Also called well or borehole.Working interest:The right granted to the lessee of a property to explore for and to produce and own oil,gas,or other minerals.The working interest owners bear the exploration,development,and operating costs on a ca

53、sh,penalty,or carried basis.PART I ITEM 1.BUSINESS This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements based on expectations,estimates and projections as of the date of this filing.These statements by their nature are subject to risks

54、,uncertainties,and assumptions and are influenced by various factors.As a consequence,actual results may differ materially from those expressed in the forward-looking statements.See Cautionary Note Regarding Forward Looking Statements and Risk Factors located in this Annual Report on Form 10-K.In th

55、is section,references to Company,we,us,our,and Midstates when used in the present tense,prospectively or for historical periods since April 25,2012,refer to Midstates Petroleum Company,Inc.and its subsidiary,and for historical periods prior to April 25,2012,refer to Midstates Petroleum Holdings LLC

56、and its subsidiary,unless the context indicates otherwise.General Midstates Petroleum Company,Inc.was incorporated pursuant to the laws of the State of Delaware on October 25,2011 to become a holding company for Midstates Petroleum Company LLC(Midstates Sub),which was previously a wholly-owned subsi

57、diary of Midstates Petroleum Holdings LLC.Pursuant to the terms of a corporate reorganization that was completed in connection with the closing of Midstates Petroleum Company,Inc.s initial public offering on April 25,2012,all of the interests in Midstates Petroleum Holdings LLC were exchanged for ne

58、wly issued common shares of Midstates Petroleum Company,Inc.,and as a result,Midstates Sub became a wholly-owned subsidiary of Midstates Petroleum Company,Inc.and Midstates Petroleum Holdings LLC ceased to exist as a separate entity.Our common stock,par value$0.01 per share,has been listed on the Ne

59、w York Stock Exchange(the NYSE)since April 2012.6 Table of Contents On October 1,2012,the Company closed on the acquisition of all of Eagle Energy Production,LLCs(Eagle Energy)producing properties and undeveloped acreage located primarily in the Mississippian Lime liquids play in Oklahoma for$325 mi

60、llion in cash,before customary post-closing adjustments,and 325,000 shares of the Companys Series A Mandatorily Convertible Preferred Stock(the Series A Preferred Stock)with an initial liquidation preference value of$1,000 per share(the Eagle Property Acquisition).The Company funded the cash portion

61、 of the Eagle Property Acquisition purchase price with a portion of the net proceeds from the private placement of$600 million in aggregate principal amount of 10.75%senior unsecured notes due 2020(the 2020 Senior Notes),which also closed on October 1,2012.On May 31,2013,the Company closed on the ac

62、quisition of producing properties and undeveloped acreage in the Anadarko Basin in Texas and Oklahoma from Panther Energy Company,LLC and its partners for approximately$618 million in cash(the Anadarko Basin Acquisition),before customary post-closing adjustments.The Company funded the purchase price

63、 with a portion of the net proceeds from the private placement of$700 million in aggregate principal amount of 9.25%senior unsecured notes due 2021(the 2021 Senior Notes and,together with the 2020 Senior Notes,the Senior Notes),which also closed on May 31,2013.On May 1,2014,the Company closed on the

64、 sale of all of its ownership interest in developed and undeveloped acreage in the Pine Prairie field area of Evangeline Parish,Louisiana to a private buyer for a purchase price of$170 million in cash,before customary post-closing adjustments.Acreage subject to the transaction totaled 3,907 gross(3,

65、757 net)acres,and did not include our acreage and production in the western part of Louisiana in Beauregard and Calcasieu Parish or other undeveloped acreage held outside the Pine Prairie field.The Company has oil and gas operations and properties in Oklahoma,Texas and Louisiana.At December 31,2014,

66、the Company operated oil and natural gas properties as one reportable segment engaged in the exploration,development and production of oil,natural gas liquids(NGLs)and natural gas.The Companys management evaluated performance based on one reportable segment as there were not significantly different

67、economic or operational environments within its oil and natural gas properties.The following table summarizes,by areas of operation,our estimated proved reserves as of December 31,2014,their corresponding pre-tax PV-10 values and our fourth quarter 2014 average daily production rates:7 Average Daily

68、 Production for Three Months Ended December 31,2014 Proved Reserves(1)PV-10(3)Oil (MBbl)NGL (MBbl)Gas (MMcf)Total(2)(MBoe)%Oil(4)(in thousands)(Boe/day)Areas of Operation Mississippian 51,494 28,957 350,064 138,796 58%$2,055,345 25,039 Anadarko Basin 4,963 3,011 26,176 12,336 65%262,705 7,337 Gulf C

69、oast 1,785 560 1,605 2,612 90%68,336 1,388 Total 58,242 32,528 377,845 153,744 59%$2,386,386 33,764 Discounted Future Income Taxes (513,025)Standardized Measure of Discounted Future Net Cash Flows(3)$1,873,361 (1)Oil,natural gas liquids and natural gas reserve quantities and related discounted futur

70、e net cash flows have been derived from oil,natural gas liquids and natural gas prices calculated using an average of the first-day-of-the month price for each month within the 12 months ended December 31,2014,pursuant Table of Contents During 2014,we incurred the following operational and total cap

71、ital expenditures(in thousands):As noted above,we incurred operational capital expenditures of$530.4 million during the year ended December 31,2014,of which$383.2 million was spent in the Mississippian Lime,$139.8 million was spent in the Anadarko Basin and$7.4 million was spent in the Gulf Coast ar

72、ea.We expect to invest between$250 million and$275 million of capital for exploration,development and lease and seismic acquisition in 2015.Additionally,we expect to capitalize between$4 million and$6 million of interest expense.Strategies Our goal is to grow our reserves,production and cash flows a

73、t an attractive rate of return on invested capital.To achieve these objectives,we strive to:Operate in a safe and environmentally responsible manner;Allocate capital to projects that generate the highest returns;Maintain a sustainable,diverse inventory of low-cost,high-margin resource plays;Drill in

74、 the highest potential areas of the resource plays in which we operate;Build contiguous acreage positions that drive operating efficiencies;Be the operator of our assets,whenever possible;Be the low-cost driller and producer in each area where we operate;8 to current SEC and FASB guidelines and were

75、$94.99/Bbl for oil,$39.17/Bbl for NGLs and$4.35 per MMBtu for natural gas.(2)Barrel of oil equivalents are determined using a ratio of one Bbl of crude to six Mcf of natural gas,which represents their approximate relative energy content.(3)Pre-tax PV-10 may be considered a non-GAAP financial measure

76、 as defined by the SEC and is derived from the standardized measure of discounted future net cash flows,which is the most directly comparable GAAP financial measure.Pre-tax PV-10 is computed on the same basis as the standardized measure of discounted future net cash flows but without deducting futur

77、e income taxes.We believe pre-tax PV-10 is a useful measure for investors for evaluating the relative monetary significance of our oil and natural gas properties.We further believe investors may utilize our pre-tax PV-10 as a basis for comparison of the relative size and value of our proved reserves

78、 to other companies because many factors that are unique to each individual company impact the amount of future income taxes to be paid.Our management uses this measure when assessing the potential return on investment related to our oil and natural gas properties and acquisitions.However,pre-tax PV

79、-10 is not a substitute for the standardized measure of discounted future net cash flows.Our pre-tax PV-10 does not purport to present the fair value of our proved oil and natural gas reserves.(4)Includes volumes attributable to oil and NGLs.For the Three Months Ended December 31,2014 For the Twelve

80、 Months Ended December 31,2014 Drilling and completion activities$116,279$511,295 Acquisition of acreage and seismic data 4,032 19,150 Operational capital expenditures incurred$120,311$530,445 Capitalized G&A,office,ARO&other 2,789 12,081 Capitalized interest 1,870 12,414 Total capital expenditures

81、incurred$124,970$554,940 Table of Contents Utilize derivative contracts to mitigate the impact of oil,NGL or natural gas price volatility,while locking in acceptable cash flows required to support future capital expenditures;and Attract and retain the best people.Development of our multi-year drilli

82、ng inventory.We intend to drill and develop our current acreage position to maximize the value of our primarily oil and liquids rich resource potential from resource plays in our core areas of operation where we can capitalize on our operating expertise.For 2015,we plan to allocate substantially all

83、 of our drilling and completions capital budget to development activities in the Mississippian area,based on the relatively stronger economic returns expected from these assets in the current commodity price and cost environment.Mississippian.Our Mississippian assets acquired on October 1,2012 are l

84、ocated in Oklahoma and target the Mississippian Lime and Hunton formations.The Mississippian Lime is an expansive carbonate hydrocarbon system located in the Anadarko Basin,primarily in northern Oklahoma.We currently intend to continue development of these liquids rich properties using horizontal we

85、lls and multi-stage frac technology.The Hunton formation is a limestone formation that produces primarily natural gas from our acreage in Lincoln County,Oklahoma.Because the Hunton targets primarily natural gas,our capital deployment will be focused on the Mississippian Lime until natural gas prices

86、 demonstrate sustained improvement from recent levels.At December 31,2014,we had approximately 99,100 gross(79,000 net)acres under lease in the area,comprised of approximately 78,100 gross(66,300 net)leased acres in the Mississippian Lime and approximately 21,000 gross(12,700 net)acres in the Hunton

87、.As of December 31,2014,we had six drilling rigs in operation,and we currently have four drilling rigs in operation.We expect to spud between 58 to 64 gross(46 to 52 net)horizontal wells,including non-operated wells,during 2015 on this acreage.Anadarko Basin.Our Anadarko Basin assets acquired on May

88、 31,2013 are located in Western Oklahoma and Texas and target multiple objectives in the Pennsylvanian section.We target the Cleveland,Marmaton,Cottage Grove and Tonkawa formations in the Anadarko Basin by utilizing horizontal wells and multi-stage frac technology.At December 31,2014,we had approxim

89、ately 161,500 gross(122,600 net)acres under lease in the Anadarko Basin,comprised of approximately 44,100 gross(32,300 net)leased acres in Oklahoma and approximately 117,400 gross(90,300 net)acres in the Texas.As of December 31,2014,we did not have any drilling rigs in operation in this area.In the

90、current price environment,we do not expect to spud any wells on this acreage during 2015.We intend to continue to evaluate this prospective acreage for future drilling plans if commodity prices continue to decline and/or drilling and completion costs experience sustained improvement.Gulf Coast.At De

91、cember 31,2014 we had approximately 68,200 gross(50,600 net)acres under lease and/or lease option.On March 5,2014,we executed a Purchase and Sale Agreement(PSA)to sell all of our ownership interest in developed and undeveloped acreage in the Pine Prairie field area of Evangeline Parish,Louisiana to

92、a private buyer.Acreage subject to the transaction totaled 3,907 gross(3,757 net)acres and closed on May 1,2014.On June 25,2014,we entered into an exploration agreement with PetroQuest Energy(PetroQuest)to sell 50%of our ownership interest in the Fleetwood prospect area in Louisiana.During 2015,we p

93、lan to participate with PetroQuest and other owners in the joint exploration and development of the Fleetwood area in Iberville,Point Coupee,and West Baton Rouge Parish,Louisiana.We executed a PSA in March 2015 for the sale of our Dequincy assets,our only remaining producing properties in Louisiana,

94、for total consideration of$44 million(subject to customary purchase price adjustments).The PSA includes our ownership interest in developed and undeveloped acreage totaling approximately 12,700 net mineral acres in the Dequincy area.During the fourth quarter 2014,the properties produced approximatel

95、y 1,300 Boe per day.The 9 Table of Contents transaction does not include our acreage and interests in the Fleetwood area of Louisiana.The net proceeds from the sale will be used to pay down a portion of the outstanding borrowings under our revolving credit facility and for general corporate purposes

96、.The transaction has an effective date of March 1,2015 and is expected to close on or before April 30,2015,subject to customary closing conditions.In the last year,we have shifted capital from the Gulf Coast area and as of December 31,2014 we did not have any operated rigs active in the area.Our int

97、ent is to continue high grading inventory in Louisiana for future capital deployment.Other than the Fleetwood project,we expect limited development activity in the Gulf Coast area in 2015 as we continue focusing on the development of our Mississippian assets.Maintain operatorship across a diverse as

98、set base.Our diverse set of assets and high degree of operating control,facilitated by our position as operator on the majority of our properties,provide flexibility with respect to drilling and completion techniques and the timing and amount of capital expenditures that support growth and help us m

99、eet our targeted financial profile.Utilize our technical and operating expertise to enhance returns.Our technical teams are focused on the application of modern reservoir evaluation and drilling and completion techniques to reduce risk and enhance returns in our core areas.We utilize 2D,3D and micro

100、 seismic data,existing sub-surface well control data,detailed reservoir characterization and geologic and geochemical modeling to identify areas with significant exploration and development potential.These areas become targets for our leasing activity.Once we have identified a potential target,we at

101、tempt to maximize returns by applying modern drilling and completion techniques that maximize recoveries in a cost efficient and economically attractive manner.We utilize reservoir evaluation methods such as conventional and rotary sidewall coring,pressure sampling and other reservoir description te

102、chniques to better understand the ultimate potential of a particular area.We believe future development across our acreage position can be further optimized with specialized completion techniques,infill drilling,horizontal wellbore optimization and enhanced recovery methods.Selectively increase our

103、acreage position.While we believe our existing acreage positions provide significant growth opportunities,we continue to strategically increase our leasehold position in what we believe are the most prospective areas of our acreage.We believe our current Oklahoma and Texas acreage is highly prospect

104、ive in the Pennsylvanian and Mississippian Lime sections and may be prospective in both shallower and deeper geologic sections.Apply rigorous investment analysis to capital allocation decisions.We employ rigorous investment analysis to determine the allocation of capital across our many drilling opp

105、ortunities and in evaluating potential acquisitions.We are focused on maximizing the internal rate of return on our investment capital and screen drilling opportunities and acquisition opportunities by measuring risk and financial return,among other factors.We continually evaluate our inventory of p

106、otential investments by these measures,incorporating past drilling results,historical knowledge and new information we have gathered.Extensive technical knowledge in our areas of operations.In our Mississippian Lime area,we believe our teams early experience operating in this trend gives us a compet

107、itive advantage with respect to geological understanding,drilling and completion techniques and infrastructure development.In the Anadarko Basin area,that we have a history of drilling horizontally in several of the Pennsylvanian sands since 2005.We have had operations in the Upper Gulf Coast Tertia

108、ry trend since 1993.We believe our extensive operating experience in the trend provides us with an expansive technical understanding and ability to optimize production from these properties.We believe we have developed amicable and mutually beneficial relationships with acreage owners in all of our

109、core operating areas,which we believe also provides us with a competitive advantage with respect to our leasing and development activity.We also benefit from long-term relationships with local service companies and infrastructure providers that we believe contribute to our efficient low-cost operati

110、ons.10 Table of Contents Summary of Oil and Gas Properties and Operations Mississippian Lime At December 31,2014,our Mississippian Lime assets consisted of approximately 66,300 net prospective acres in the Mississippian Lime trend,with 64,100 net acres in Woods and Alfalfa Counties of Oklahoma,which

111、 we currently believe is the core of the trend.We currently intend to develop these liquids-rich properties using horizontal wells.We also own approximately 12,700 net acres in Lincoln County,Oklahoma,which produces from,and is prospective in,the Hunton formation.Our properties in this area represen

112、ted 90%of our total proved reserves as of December 31,2014.As of December 31,2014,we held an average working interest and average net revenue interest of 69%and 55%,respectively,in this area.For the three months ended December 31,2014 and 2013 and the years ended December 31,2014 and 2013,our averag

113、e daily production from this area was as follows:During 2014,we invested approximately$383.2 million and spud 76 net horizontal wells in this region.In the three months ended December 31,2014,we spud 16 net wells and brought 24 net wells online.Of the 16 net wells spud during the quarter,three were

114、drilling,10 were awaiting completion and three were producing at year-end.Our main operating area in the Mississippian Lime is defined by de-risked acreage primarily in Woods County,where we are engaged in development drilling.Our current development drilling is targeting the Mississippian Lime inte

115、rval,where we anticipate ultimate development of at least four horizontal wells per 640 acre section.We are also testing different drilling and completion techniques to determine the most cost effective design in this area.In 2015,we plan to invest approximately$250 million to$275 million in the spu

116、dding of between 58 to 64 gross wells,including non-operated wells.Our plans are to continue to actively develop this area while evaluating exploration potential beyond our current position.Expansion Areas within Mississippian Lime The majority of our rigs currently operating in the Mississippian Li

117、me are focused on infill drilling in our core area;during 2015,we plan to drill four to six wells to extend our de-risked acreage to the west and hold acreage.Anadarko Basin Our Anadarko Basin assets were acquired on May 31,2013,and at December 31,2014,consisted of approximately 122,600 net acres in

118、 the Anadarko Basin,with 90,300 net acres in Texas and 32,300 net acres in western Oklahoma.We took over operation of the properties on December 1,2013.As of December 31,2014,we did not have any drilling rigs in operation in this area.11 Three Months Ended December 31,Years Ended December 31,2014 20

119、13 Increase in Production 2014 2013 Increase in Production Average daily production:Oil(Bbls)10,060 6,325 59%8,411 4,567 84%Natural gas liquids(Bbls)4,809 3,622 33%4,437 2,620 69%Natural gas(Mcf)61,025 45,794 33%52,024 34,784 50%Net Boe/day 25,039 17,579 42%21,518 12,985 66%Table of Contents Our pro

120、perties in this area represented 8%of our total proved reserves as of December 31,2014.As of December 31,2014,we held an average working interest and average net revenue interest of 66%and 52%,respectively,in this area.For the three months ended December 31,2014 and 2013 and the years ended December

121、 31,2014 and 2013,our average daily production from this area was as follows:During 2014,we invested approximately$139.8 million and spud 26 net horizontal wells in the area.In the three months ended December 31,2014,we spud three net wells and brought two net wells online.Of the three net wells spu

122、d during the quarter,two were awaiting completion and one was producing at year-end.Since year-end,three wells have been completed and brought online.In the current commodity price and drilling and completion cost environment,we do not currently plan to spud any wells on this acreage during 2015,how

123、ever we will continue to evaluate for opportunities.For 2015,our efforts will focus on reducing well maintenance costs and production downtime and these efforts alone will not be sufficient to arrest the natural decline in production that occurs as we deplete our developed reserves.Additionally,beca

124、use of our limited capital resources,we may allow leasehold rights on acreage not held by production to expire,which could reduce our future drilling opportunities in this area.Gulf Coast In the Gulf Coast,our current acreage positions and evaluation efforts are concentrated in Louisiana in the Wilc

125、ox interval of the Upper Gulf Coast Tertiary trend and is characterized by well-defined geology,including tight sands featuring multiple productive zones typically located within large geologic traps.As of December 31,2014,we had including acreage in the Fleetwood area,approximately 50,600 net acres

126、 in the trend under lease and/or lease option.We closed on the sale of producing properties and undeveloped acreage in the Pine Prairie field area of Evangeline Parish,Louisiana on May 1,2014 for estimated net proceeds of$147.5 million in cash,after post-closing adjustments.The sale has an effective

127、 date of November 1,2013.Acreage subject to the transaction totaled 3,907 gross(3,757 net)acres,and did not include our acreage and production in the western part of Louisiana in Beauregard Parish or other undeveloped acreage held outside the Pine Prairie field.Production from the assets included in

128、 this sale averaged 626 and 3,453 Boe/d during the years ended December 31,2014 and 2013,respectively,and 2,366 Boe/d during the quarter ended December 31,2013.There was no production from Pine Prairie during the quarter ended December 31,2014.Our remaining Gulf Coast areas of operation are concentr

129、ated in the South Bearhead and North Cowards Gully fields.On June 25,2014,we entered into an exploration agreement with PetroQuest to sell 50%of our ownership interest in the Fleetwood prospect area in Louisiana.We plan to participate with PetroQuest 12 Three Months Ended December 31,Years Ended Dec

130、ember 31,2014 2013 Decrease in Production 2014 2013(1)Increase in Production Average daily production:Oil(Bbls)3,343 3,940 (15)%4,014 2,239 79%Natural gas liquids(Bbls)1,703 1,816 (6)%1,766 1,082 63%Natural gas(Mcf)13,749 16,190 (15)%14,930 9,559 56%Net Boe/day 7,337 8,454 (13)%8,269 4,914 68%(1)Not

131、e that as the Anadarko Basin Acquisition closed on May 31,2013,this represents the impact to average annual production for the period of May 31,2013 through December 31,2013.Table of Contents and other owners in the joint exploration and development of the Fleetwood area in Iberville,Point Coupee,an

132、d West Baton Rouge Parish,Louisiana.There are currently three wells planned to be spud in the first six months of the year;we will have a carried working interest ranging from 25%to 50%in those wells.The carried working interest is capped at a total credit of$14 million.In March 2015,we executed a P

133、SA for the sale of our Dequincy assets,our only remaining producing properties in Louisiana,for total consideration of$44 million(subject to customary purchase price adjustments).The PSA includes our ownership interest in developed and undeveloped acreage totaling approximately 12,700 net mineral ac

134、res in the Dequincy area.During the fourth quarter 2014,the properties produced approximately 1,300 Boe per day.The transaction does not include our acreage and interests in the Fleetwood area of Louisiana.The net proceeds from the sale will be used to pay down a portion of the outstanding borrowing

135、s under our revolving credit facility and for general corporate purposes.The transaction has an effective date of March 1,2015 and is expected to close on or before April 30,2015,subject to customary closing conditions.Our properties in this area represented 2%of our total proved reserves as of Dece

136、mber 31,2014.As of December 31,2014,we held an average working interest and average net revenue interest of 96%and 75%;respectively,in this area.For the quarter ended December 31,2014 and 2013,and years ended December 31,2014 and 2013,our average daily production from the area was as follows:In the

137、last year,we have shifted capital to the Mississippian Lime assets and as of December 31,2014 did not have any rigs in operation in the Gulf Coast.Our intent is to continue high grading inventory in Louisiana for future capital deployment.Other than the Fleetwood area,we expect limited activity as w

138、e continue focusing on our Mississippian assets.We currently have no drilling rigs operating in this area as we have devoted our capital to developing our Mississippian Lime assets;however,we plan to continue to evaluate our acreage as well as other potential exploration opportunities in the Gulf Co

139、ast area.Because of our limited activity in this area,our production will continue to decline as we deplete our developed reserves.13 Three Months Ended December 31,Years Ended December 31,2014(1)2013 Decrease in Production 2014(1)2013 Decrease in Production Average daily production:Oil(Bbls)959 3,3

140、75 (72)%1,669 3,890 (57)%Natural gas liquids(Bbls)278 995 (72)%419 1,008 (58)%Natural gas(Mcf)911 4,706 (81)%1,574 6,772 (77)%Net Boe/day 1,388 5,154 (73)%2,350 6,027 (61)%(1)Note that as the Pine Prairie Disposition closed on May 1,2014,this represents the majority of the impact to average annual p

141、roduction for the period of January 1,2014 through May 1,2014.Table of Contents Estimated Proved Reserves Our proved reserves have grown from 75.5 to 127.8 MMBoe from year end 2012 to year end 2013 and from 127.8 to 153.7 MMBoe from year end 2013 to year end 2014.Our reserve growth in these periods

142、is due directly to the extensions and discoveries associated with our drilling activities in each year and,during 2012,the Eagle Property Acquisition and during 2013,the Anadarko Basin Acquisition.As a result,we have increased our average daily production at a compound annual growth rate of 79%from

143、995 Boe/d in the year ended December 31,2008 to 32,137 Boe/d in the year ended December 31,2014.Our proved developed reserves have increased 24.9 MMBoe from 48.7 MMBoe(or 38%of total reserves)to 73.6(or 48%of total reserves)as a result of our drilling activities.Our proved undeveloped reserves have

144、grown from 79.0 MMBoe to 80.1 MMBoe from December 31,2013 to December 31,2014.During this time,we spent$237 million of our capital expenditures on drilling proved undeveloped locations and converted 14.9 MMBoe from proved undeveloped reserves to proved developed reserves.In addition,we added 77.0 MM

145、Boe of proved undeveloped reserves through extensions and discoveries and had net negative revisions of 22.9 MMBoe related to proved 14 Oil (MBbl)NGL (MBbl)Gas (MMcf)Total (MBoe)2012 Proved Reserves Beginning Balance 15,716 4,031 38,692 26,196 Revision of previous estimates (1,368)(193)(8,533)(2,982

146、)Extensions,discoveries and other additions 12,262 3,232 32,646 20,935 Purchases of reserves in place 13,010 7,745 85,293 34,969 Production (2,093)(617)(5,695)(3,659)Net proved reserves at December 31,2012 37,527 14,198 142,403 75,459 Proved developed reserves,December 31,2012 13,207 5,437 54,775 27

147、,774 Proved undeveloped reserves,December 31,2012 24,320 8,761 87,628 47,685 2013 Proved Reserves Beginning Balance 37,527 14,198 142,403 75,459 Revision of previous estimates (13,511)(3,259)(20,762)(20,230)Extensions,discoveries and other additions 17,538 8,812 103,551 43,608 Purchases of reserves

148、in place 17,242 8,124 73,653 37,642 Production (3,897)(1,719)(18,647)(8,724)Net proved reserves at December 31,2013 54,899 26,156 280,198 127,755 Proved developed reserves,December 31,2013 19,853 10,321 111,410 48,743 Proved undeveloped reserves,December 31,2013 35,046 15,835 168,788 79,012 2014 Pro

149、ved Reserves Beginning Balance 54,899 26,156 280,198 127,755 Revision of previous estimates (11,563)(4,444)(41,510)(22,925)Extensions,discoveries and other additions 30,232 15,414 188,336 77,035 Sales of reserves in place (10,182)(2,181)(24,166)(16,391)Production (5,144)(2,417)(25,013)(11,730)Net pr

150、oved reserves at December 31,2014 58,242 32,528 377,845 153,744 Proved developed reserves,December 31,2014 27,181 16,443 179,972 73,620 Proved undeveloped reserves,December 31,2014 31,061 16,085 197,873 80,124 Table of Contents undeveloped reserves,of which 3.1 MMBoe related to reductions at our Gul

151、f Coast area and 22.1 MMBoe related to reductions in our Anadarko Basin area,offset by 2.3 MMBoe in positive revisions in the Mississippian Lime area.These net negative revisions in the Gulf Coast were primarily due to our lack of future development plans in this area.The net negative revisions in t

152、he Anadarko Basin were primarily due to our current drilling plans which did not allow for development of these proved undeveloped reserves within five years of their initial booking.In addition,16.4 MMBoe of reserves were sold as a result of the Pine Prairie Disposition,which closed on May 1,2014.A

153、ll of our proved undeveloped reserves as of December 31,2014 are expected to be developed within five years of their initial booking.Independent petroleum engineers Mississippian Lime,Anadarko,and Gulf Coast Area Reserves For our Mississippian Lime and Anadarko area,our estimated reserves and relate

154、d future net revenues at December 31,2014 are based on reports prepared by Cawley,Gillespie&Associates,Inc.(CGA),in accordance with generally accepted petroleum engineering and evaluation principles and definitions and guidelines in effect during such period established by the SEC.For our Anadarko a

155、rea,our estimated reserves and related future net revenues at December 31,2013 are based on reports prepared by Cawley,Gillespie&Associates,Inc.(CGA),in accordance with generally accepted petroleum engineering and evaluation principles and definitions and guidelines in effect during such period esta

156、blished by the SEC.The reserves estimates shown herein have been independently evaluated by CGA,a worldwide leader of petroleum property analysis for industry and financial organizations and government agencies.CGA was founded in 1961 and performs consulting petroleum engineering services under Texa

157、s Board of Professional Engineers Registration No.F-693.Within CGA,the technical person primarily responsible for preparing the estimates set forth in the reserves report incorporated herein was Mr.Zane Meekins.Mr.Meekins has been a practicing consulting petroleum engineer at CGA since 1989.Mr.Meeki

158、ns is a Registered Professional Engineer in the State of Texas(License No.71055)and has over 27 years of practical experience in petroleum engineering,with over 25 years of experience in the estimation and evaluation of reserves.He graduated from Texas A&M University in 1987 with a Bachelor of Scien

159、ce degree in Petroleum Engineering.Mr.Meekins meets or exceeds the education,training,and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers;he is proficient in judiciously

160、 applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserve definitions and guidelines.Our estimated reserves and related future net revenues for the Mississippian Lime area at December 31,2013 and 2012 were based on reports prep

161、ared by NSAI,in accordance with generally accepted petroleum engineering and evaluation principles and definitions and guidelines in effect during such period established by the SEC.Our estimated reserves and related future net revenues at December 31,2014 for the Gulf Coast area are based on report

162、s prepared by Netherland,Sewell&Associates,Inc.(NSAI),in accordance with generally accepted petroleum engineering and evaluation principles and definitions and guidelines in effect during such period established by the SEC.Our estimated reserves and related future net revenues for the Gulf Coast are

163、a at December 31,2013 and 2012 were based on reports prepared by NSAI,in accordance with generally accepted petroleum engineering and evaluation principles and definitions and guidelines in effect during such period established by the SEC.15 Table of Contents The reserves estimates shown herein have

164、 been independently evaluated by Netherland,Sewell&Associates,Inc.(NSAI),a worldwide leader of petroleum property analysis for industry and financial organizations and government agencies.NSAI was founded in 1961 and performs consulting petroleum engineering services under Texas Board of Professiona

165、l Engineers Registration No.F-2699.Within NSAI,the technical persons primarily responsible for preparing the estimates set forth in the NSAI reserves report incorporated herein are Mr.Robert C.Barg and Mr.Philip R.Hodgson.Mr.Barg,a Licensed Professional Engineer in the State of Texas(No.71656),has b

166、een practicing consulting petroleum engineering at NSAI since 1989 and has over 6 years of prior industry experience.He graduated from Purdue University in 1983 with a Bachelor of Science Degree in Mechanical Engineering.Mr.Hodgson,a Licensed Professional Geoscientist in the State of Texas,Geology(N

167、o.1314),has been practicing consulting petroleum geoscience at NSAI since 1998 and has over 14 years of prior industry experience.He graduated from University of Illinois in 1982 with a Bachelor of Science Degree in Geology and from Purdue University in 1984 with a Master of Science Degree in Geophy

168、sics.Both technical principals meet or exceed the education,training,and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers;both are proficient in judiciously applying indu

169、stry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserves definitions and guidelines.Technology used to establish proved reserves Under Rule 4-10(a)(22)of Regulation S-X,as promulgated by the SEC,proved reserves are those quantities of oil

170、and natural gas,which,by analysis of geoscience and engineering data,can be estimated with reasonable certainty to be economically producible from a given date forward,from known reservoirs,and under existing economic conditions,operating methods,and government regulations.The term reasonable certai

171、nty implies a high degree of confidence that the quantities of oil and/or natural gas actually recovered will equal or exceed the estimate.Reasonable certainty can be established using techniques that have been proved effective by actual production from projects in the same reservoir or an analogous

172、 reservoir or by other evidence using reliable technology that establishes reasonable certainty.Reliable technology is a grouping of one or more technologies(including computational methods)that has been field tested and has been demonstrated to provide reasonably certain results with consistency an

173、d repeatability in the formation being evaluated or in an analogous formation.In order to establish reasonable certainty with respect to our estimated proved reserves,NSAI and CGA employed technologies that have been demonstrated to yield results with consistency and repeatability.The technologies a

174、nd economic data used in the estimation of our proved reserves include,but are not limited to,electrical logs,radioactivity logs,core analyses,geologic maps and available downhole and production data,seismic data and well test data.Internal controls over reserves estimation process We maintain an in

175、ternal staff of petroleum engineers,land and geoscience professionals who work closely with our independent reserve engineers to ensure the integrity,accuracy and timeliness of data furnished to NSAI and CGA in their reserves estimation process.The primary inputs to the reserve estimation process ar

176、e comprised of technical information,financial data,ownership interests and production data.All field and reservoir technical information,which is updated annually,is assessed for validity when the reservoir engineers hold technical meetings with geoscientists,operations and land personnel to discus

177、s field performance and to validate future development plans.Current revenue and expense information is obtained from the Companys accounting records,which are subject to external quarterly reviews,annual audits and their own set of internal controls over financial reporting.All current financial da

178、ta such as commodity prices,lease operating expenses,production taxes and field 16 Table of Contents commodity price differentials are updated in the reserve database and then analyzed to ensure that they have been entered accurately and that all updates are complete.The Companys current ownership i

179、n mineral interests and well production data are incorporated into the reserve database as well and verified to ensure their accuracy and completeness.At December 31,2014,Mick Matejka,our DirectorCorporate Reserves,was the technical person primarily responsible for overseeing the preparation of our

180、reserve estimates and reported directly to the CEO.Mr.Matejka has over 15 years of experience in the estimation and evaluation of oil and gas assets.Mr.Matejka started his career with Royal Dutch Shell working as a reservoir engineer for various asset teams in the Gulf of Mexico and the Lower 48,and

181、 eventually as exploration portfolio manager.Prior to joining Midstates Petroleum in 2012,Mr.Matejka had been a Sr.District engineer with Samson Resources,responsible for the evaluation of Samsons Haynesville shale asset.At Midstates Mr.Matejka headed the engineering evaluation of both the Eagle Ene

182、rgy and Panther Energy acquisitions,prior to transitioning into the role of DirectorCorporate Reserves.Mr.Matejka graduated from the University of Leoben,Austria as Diplom Ingenieur in Petroleum Business in 1998 and from the University of Oklahoma in 2001 with a Master of Science Degree in Petroleum

183、 Engineering.Furthermore Mr.Matejka holds an MBA from Heriot-Watt University,UK.Throughout each fiscal year,our technical team meets with representatives of our independent reserve engineers to review properties and discuss methods and assumptions used in preparation of the proved reserves estimates

184、.While we have no formal committee specifically designated to review reserves reporting and the reserves estimation process,the reserve report is reviewed by our senior management with representatives of our independent reserve engineers and internal technical staff.In connection with our annual eva

185、luation of the effectiveness of our internal control over financial reporting for the year ended December 31,2013,we determined that,as of December 31,2013,we did not maintain effective internal control over the accuracy and valuation of oil and gas reserves estimates.During the year ended December

186、31,2014,we have made changes in our internal control over financial reporting(specifically over the preparation of oil and gas reserve estimates)that have materially affected our internal control over financial reporting.For the year ended December 31,2014,management concluded that the material weak

187、ness over the preparation of oil and gas reserve estimates(previously identified during the year ended December 31,2013)had been remediated and that the Company maintained effective internal control over the accuracy and valuation of the oil and gas estimates.Please see Managements Annual Report on

188、Internal Control over Financial Reporting in Item 9A of this Annual Report.Production,revenues and price history Oil and natural gas are commodities.The price that we receive for the oil and natural gas we produce is largely a function of market supply and demand.Demand for oil and natural gas in th

189、e United States has increased dramatically during the past decade.However,the economic slowdown during the second half of 2008 and through 2009 reduced this demand.Demand for oil increased during 2010,2011 and 2012,but demand for natural gas has remained sluggish and the price of natural gas has rem

190、ained relatively depressed due to increasing supplies from shale plays.Additionally,the price of oil substantially declined in the fourth quarter of 2014 due to a variety of macro economic factors,including increasing supply,strengthening of the US dollar and forecasts of slower worldwide economic g

191、rowth.Commodity prices have varied substantially over the past year.The spot natural gas prices during 2014 ranged from a high of$8.15 to a low of$2.99 per MMBtu and the spot oil prices during 2014 ranged from a high of$107.95 to a low of$53.45 per Bbl.Thus far in 2015,commodity prices have continue

192、d to be depressed and volatile,with spot natural gas prices ranging from a high of$3.32 to a low of$2.62 per MMBtu and the spot oil prices ranging from a high of$53.56 to a low of$44.08 per Bbl through March 2,2015.Demand is impacted by general economic conditions,weather and other seasonal conditio

193、ns.Over or under supply of oil or natural gas can result in substantial price volatility.Historically,commodity prices have been volatile and we expect that volatility to continue in 17 Table of Contents the future.A continued substantial or extended decline in oil or natural gas prices or poor dril

194、ling results could have a material adverse effect on our financial position,results of operations,cash flows,quantities of oil and natural gas reserves that may be economically produced and our ability to access capital markets.The following table sets forth information regarding oil,NGLs and natura

195、l gas production,revenues and realized prices and production costs for the years ended December 31,2014,2013 and 2012.For additional information on price calculations,see information set forth in Managements Discussion and Analysis of Financial Condition and Results of Operation.18 Years Ended Decem

196、ber 31,2014 2013 2012 Operating Data:Net production volumes:Oil(MBbls)5,144 3,904 2,093 NGLs(MBbls)2,417 1,719 617 Natural gas(MMcf)25,013 18,657 5,695 Total oil equivalents(MBoe)11,730 8,733 3,659 Average daily production(Boe/d)32,137 23,927 9,999 Average Sales Prices:Oil,without realized derivativ

197、es(per Bbl)$90.71$99.18$104.35 Oil,with realized derivatives(per Bbl)$87.40$93.41$95.05 Natural gas liquids,without realized derivatives(per Bbl)$36.31$36.26$38.27 Natural gas liquids,with realized derivatives(per Bbl)$36.40$37.09$40.48 Natural gas,without realized derivatives(per Mcf)$3.97$3.39$2.8

198、1 Natural gas,with realized derivatives(per Mcf)$3.91$3.58$3.21 Costs and Expenses(per Boe of production):Lease operating and workover$6.79$8.41$8.34 Gathering and transportation$1.14$0.62$Severance and other taxes$2.07$3.12$6.81 Asset retirement accretion$0.15$0.17$0.20 Depreciation,depletion and a

199、mortization$23.01$28.67$34.32 Impairment of oil and gas properties$7.37$51.91$General and administrative$4.15$6.10$8.35 Acquisition and transaction costs$0.35$1.35$4.07 Other$0.44$0.07$Table of Contents The following table sets forth information regarding oil,NGLs and natural gas daily production fo

200、r each of the fields that represented more than 15%of our estimated total proved reserves as of December 31,2014:Productive Wells The following table presents our total gross and net productive wells as of December 31,2014:Gross wells are the number of wells in which a working interest is owned,and

201、net wells are the total of our fractional working interest owned in gross wells.Acreage The following table sets forth certain information regarding the developed and undeveloped acreage in which we have a controlling interest as of December 31,2014 for each of our operating areas.Acreage related to

202、 royalty,overriding royalty and other similar interests is excluded from this summary.19 Years Ended December 31,2014 2013 2012 Mississippian(1)Daily production volumes:Oil(Bbls)8,401 4,550 203 NGLs(Bbls)4,093 1,908 123 Natural gas(Mcf)50,164 30,070 1,289 Total oil equivalents(Net Boe/day)20,854 11,

203、470 541 Anadarko(2)Daily production volumes:Oil(Bbls)4,014 2,239 NGLs(Bbls)1,766 1,082 Natural gas(Mcf)14,930 9,559 Total oil equivalents(Net Boe/day)8,269 4,914 (1)These volumes represent only Mississippian Lime production and do not include Hunton production volumes.(2)Anadarko production volumes

204、for 2013 include production from May 31,2013,the date of acquisition of the Anadarko Basin Properties,through December 31,2013.Oil Natural Gas Total Gross Net Gross Net Gross Net Total productive wells 611 417 54 40 665 457 Developed Acres Undeveloped Acres Total Acres Gross Net Gross Net Gross Net

205、Mississippian Lime 82,778 65,627 16,299 13,390 99,077 79,017 Anadarko Basin 118,386 95,306 43,092 27,294 161,478 122,600 Gulf Coast 10,785 10,783 57,375 39,796 68,160 50,579 Total 211,949 171,716 116,766 80,480 328,715 252,196 Table of Contents Undeveloped Acreage Expirations The following table set

206、s forth the number of gross and net undeveloped acres as of December 31,2014 that will expire over the next three years by operating area unless production is established within the spacing units covering the acreage or we make additional lease rental payments prior to the expiration dates:Approxima

207、tely 6%of our net acreage,including acreage under option,was acquired in 2014,with the majority of such leases under three year primary term leases.In addition,our typical lease terms along with unit regulatory rules generally provide us flexibility to continue lease ownership through either establi

208、shing production or actively drilling prospects.Because of our limited capital resources and reduced activity levels in the Anadarko Basin and Gulf Coast,we may allow leasehold rights on acreage not held by production to expire in these areas,which could reduce our future drilling opportunities.Base

209、d on current pricing and current drilling plans,we impaired the remaining Anadarko basin unevaluated property to the full cost pool during the fourth quarter of 2014.Drilling Activity The following table summarizes our drilling activity for the years ended December 31,2014,2013 and 2012.Gross wells

210、reflect the sum of all wells in which we own an interest.Net wells reflect the sum of our working interests in gross wells.As of December 31,2014,there were four gross(and net)development wells currently drilling;no exploratory wells were being drilled.After peaking in 2013,our drilling activity has

211、 decreased over the last several months.At December 31,2014 we were operating six drilling rigs on our properties and we are currently operating four drilling rigs.Our recent drilling activity has primarily focused on development and delineation and appraisal of our primary operating areas in the Mi

212、ssissippian and Anadarko Basin.In addition to the drilling activity listed above,a portion of our capital program over the last three years has also been focused on re-entering and recompleting productive zones in existing wellbores.For the year ended December 31,2014,we did not have any operated we

213、lls that were deemed dry holes.However,as part 20 Expiring 2015 Expiring 2016 Expiring 2017 Gross Net Gross Net Gross Net Mississippian Lime 3,300 2,385 7,970 6,911 3,473 3,021 Anadarko Basin 17,235 10,917 9,984 6,324 15,846 10,032 Gulf Coast 15,880 14,958 16,525 11,206 13,484 8,483 Total Undevelope

214、d Acreage Expirations 36,415 28,260 34,479 24,411 32,803 21,536 Years Ended December 31,2014 2013 2012 Gross Net Gross Net Gross Net Development wells:Productive 119 97 121 98 68 64 Dry holes 1 1 7 7 Total 119 97 122 99 75 71 Exploratory wells:Productive 1 1 4 3 Dry holes 2 2 Total 1 1 2 2 4 3 Total

215、 wells 120 98 124 101 79 74 Table of Contents of our exploration agreement with PetroQuest(discussed above),one well was drilled and deemed a dry hole in the Lower Wilcox during the first quarter of 2015.Marketing and Major Customers We sell our oil,NGLs and natural gas to third-party purchasers.We

216、are not dependent upon,or contractually limited to,any one purchaser or small group of purchasers other than in our Mississippian region,where a portion of our natural gas production is dedicated to one purchaser for the economic life of the relevant assets.For the year ended December 31,2014,Plains

217、 Marketing,Semgas,Phillips66 and Valero Marketing accounted for 28%,18%,15%and 12%of our revenues,respectively.For the year ended December 31,2013,ConocoPhillips,Chevron,Gulfmark,Semgas and Valero Marketing accounted for 28%,16%,13%,12%,and 11%of our revenues,respectively.For the year ended December

218、 31,2012,Chevron,Gulfmark and Targa accounted for 41%,32%and 10%of our revenues,respectively.Due to the nature of oil,natural gas and NGL markets,and because we sell our oil production to purchasers that transport by truck rather than by pipelines,we do not believe the loss of a single purchaser or

219、a few purchasers would materially adversely affect our ability to sell our production.We are party to a gas purchase,gathering and processing contract(as amended and effective June 1,2013)in the Mississippian Lime region,which includes certain minimum natural gas and NGL volume commitments.To the ex

220、tent we do not deliver natural gas volumes in sufficient quantities to generate,when processed,the minimum levels of recovered NGLs,we would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall,if any,multiplied by a fee of roughly$0.08 to$0.125 per gallon(su

221、bject to annual escalation).The NGL volume commitments range from 2,800 Bbls to 5,780 Bbls per day for each monthly accounting period over the remaining term of the contract.Additionally,we are obligated to deliver a total of 38,100,000 MMBtus and 76,200,000 MMBtus during the first 30 months and 60

222、months of the contract,respectively.During the first 30 months,any shortfall in delivered volumes would result in a payment to the counterparty equal to the shortfall amount multiplied by a fee of approximately$0.36 per MMBtu.During the first 60 months,any shortfall in delivered volumes would result

223、 in a payment to the counterparty equal to the shortfall amount multiplied by a fee of approximately$0.36 per MMBtu,provided that we would receive volumetric credit for any deficiency payment made after the initial 30 months.As of January 31,2015,we have delivered 62,573,054 MMBtu.We are currently d

224、elivering at least the minimum volumes required under these contractual provisions and do not expect to incur any future volumetric shortfall payments during the term of this contract.Title to Properties As is customary in the oil and natural gas industry,we initially conduct a cursory review of the

225、 title to our properties on which we do not have proved reserves.Prior to the commencement of drilling operations on those properties,we conduct a more thorough title examination and perform curative work with respect to significant defects.To the extent title opinions or other investigations reflec

226、t defects affecting those properties,we are typically responsible for curing any such defects at our expense.We generally will not commence drilling operations on a property until we have cured known material title defects on such property.We have reviewed the title to substantially all of our produ

227、cing properties and believe that we have satisfactory title to our producing properties in accordance with standards generally accepted in the oil and natural gas industry.Prior to completing an acquisition of producing oil and natural gas properties,we perform title reviews on the most significant

228、properties and,depending on the materiality of properties,we may obtain a title opinion or review or update previously obtained title opinions.Our oil and natural gas properties are subject to customary royalty and other interests,liens to secure borrowings under our credit facility,liens for curren

229、t taxes and other burdens which we believe do not materially interfere with their use or affect our carrying value of the properties.21 Table of Contents Seasonality Generally,demand for oil and natural gas decreases during the spring and fall months and increases during the summer and winter months

230、.However,seasonal anomalies such as mild winters or mild summers sometimes lessen this fluctuation.In addition,certain natural gas users utilize natural gas storage facilities and purchase some of their anticipated winter requirements during the summer.This can also lessen seasonal demand fluctuatio

231、ns.Winter weather conditions can limit or temporarily halt our drilling and producing activities and other oil and natural gas operations,including gas processing,access to electricity and transportation.Additionally,once production comes back online following a cessation due to weather,it may take

232、a period of time before production from a well reaches the level it was at prior to the cessation.These constraints and the resulting shortages or high costs could delay or temporarily halt our operations and materially increase our operating and capital costs.Such seasonal anomalies can also pose c

233、hallenges for meeting our well drilling objectives and may increase competition for equipment,supplies and personnel during the spring and summer months,which could lead to shortages and increased costs or delay or temporarily halt our operations.Competition The oil and natural gas industry is highl

234、y competitive.We compete with numerous entities,including major domestic and foreign oil companies,other independent oil and natural gas companies and individual producers and operators.Many of these competitors are large,well established companies and have financial and other resources substantiall

235、y greater than ours.Our ability to acquire additional oil and natural gas properties and to discover reserves in the future will depend upon our ability to evaluate and select suitable properties and successfully consummate transactions in a highly competitive environment.Regulation of the oil and n

236、atural gas industry Our operations are substantially affected by federal,state and local laws and regulations.In particular,oil and natural gas production and related operations are,or have been,subject to price controls,taxes and numerous other laws and regulations.All of the jurisdictions in which

237、 we own or operate properties for oil and natural gas production have statutory provisions regulating the exploration for and production of oil and natural gas,including provisions related to permits for the drilling of wells,bonding requirements to drill or operate wells,the location of wells,the m

238、ethod of drilling and casing wells,the surface use and restoration of properties upon which wells are drilled,sourcing and disposal of water used in the drilling and completion process and produced during operations and the abandonment of wells.Our operations are also subject to various conservation

239、 laws and regulations.These include regulation of the size of drilling and spacing units or proration units,the number of wells which may be drilled in an area,and the unitization or pooling of oil and natural gas wells,as well as regulations that generally prohibit the venting or flaring of natural

240、 gas and impose certain requirements regarding the ratability or fair apportionment of production from fields and individual wells.Failure to comply with applicable laws and regulations can result in substantial penalties.The regulatory burden on the industry increases the cost of doing business and

241、 affects profitability.Although we believe we are in substantial compliance with all applicable laws and regulations,and that continued substantial compliance with existing requirements will not have a material adverse effect on our financial position,cash flows or results of operations,such laws an

242、d regulations are frequently amended or reinterpreted.Additionally,currently unforeseen environmental incidents may occur or past non-compliance with environmental laws or regulations may be discovered.Therefore,we are unable to predict the future costs or impact of compliance.Additional proposals a

243、nd proceedings that affect the oil and natural gas industry are regularly considered by Congress,the states,the Federal 22 Table of Contents Energy Regulatory Commission(FERC)and the courts.We cannot predict when or whether any such proposals may become effective.Regulation of transportation and sal

244、e of oil Sales of crude oil,condensate and NGLs are not currently regulated and are made at negotiated prices.Nevertheless,Congress could reenact price controls in the future.The price we receive from the sale of these products may be affected by the cost of transporting the products to market.For o

245、ur oil production,all of that transportation is currently via truck and we do not rely on interstate or intrastate pipelines.Regulation of transportation and sales of natural gas Historically,the transportation and sale for resale of natural gas in interstate commerce has been regulated by the Feder

246、al Energy Regulatory Commission(FERC)under the Natural Gas Act of 1938(NGA),the Natural Gas Policy Act of 1978(NGPA)and regulations issued under those statutes.In the past,the federal government has regulated the prices at which natural gas could be sold.While sales by producers of natural gas can c

247、urrently be made at market prices,Congress could reenact price controls in the future.Deregulation of wellhead natural gas sales began with the enactment of the NGPA and culminated in adoption of the Natural Gas Wellhead Decontrol Act which removed all price controls affecting wellhead sales of natu

248、ral gas effective January 1,1993.FERC regulates interstate natural gas transportation rates,and terms and conditions of service,which affects the marketing of natural gas that we produce,as well as the revenues we receive for sales of our natural gas.Since 1985,the FERC has endeavored to make natura

249、l gas transportation more accessible to natural gas buyers and sellers on an open and non-discriminatory basis.The FERC has stated that open access policies are necessary to improve the competitive structure of the interstate natural gas pipeline industry and to create a regulatory framework that wi

250、ll put natural gas sellers into more direct contractual relations with natural gas buyers by,among other things,unbundling the sale of natural gas from the sale of transportation and storage services.Beginning in 1992,the FERC issued a series of orders,beginning with Order No.636,to implement its op

251、en access policies.As a result,the interstate pipelines traditional role of providing the sale and transportation of natural gas as a single service has been eliminated and replaced by a structure under which pipelines provide transportation and storage service on an open access basis to others who

252、buy and sell natural gas.Although the FERCs orders do not directly regulate natural gas producers,they are intended to foster increased competition within all phases of the natural gas industry.The natural gas industry historically has been very heavily regulated.Therefore,we cannot provide any assu

253、rance that the less stringent regulatory approach that FERC has historically maintained will continue.However,we do not believe that any action taken will affect us in a way that materially differs from the way it affects other natural gas producers.The price at which we sell natural gas is not curr

254、ently subject to federal rate regulation and,for the most part,is not subject to state regulation.However,with regard to our physical sales of these energy commodities,we are required to observe anti-market manipulation laws and related regulations enforced by the FERC and/or the Commodity Futures T

255、rading Commission(CFTC)and the Federal Trade Commission(FTC).Should we violate the anti-market manipulation laws and regulations,we could also be subject to related third party damage claims by,among others,sellers,royalty owners and taxing authorities.In addition to the anti-market manipulation law

256、s,FERC has also issued regulations to increase market transparency.Pursuant to Order No.704,some of our operations may be required to annually report to FERC on May 1 of each year for the previous calendar year.Order No.704 requires wholesale buyers and sellers of more than 2.2 million MMBtu of phys

257、ical natural gas in the previous calendar year,including interstate and intrastate natural gas pipelines,natural gas gatherers,natural gas processors and natural gas marketers,to report on May 1 of each year aggregate volumes 23 Table of Contents of natural gas purchased or sold at wholesale in the

258、previous calendar year to the extent such transactions utilize,contribute to or may contribute to the formation of price indices.It is the responsibility of the reporting entity to determine which transactions should be reported based on the guidance of Order No.704.Gathering services,which occur up

259、stream of FERC jurisdictional transmission services,are regulated by the states onshore and in state waters.Although the FERC has set forth a general test for determining whether facilities perform a non-jurisdictional gathering function or a jurisdictional transmission function,the FERCs determinat

260、ions as to the classification of facilities is done on a case by case basis.State regulation of natural gas gathering facilities generally includes various safety,environmental and,in some circumstances,nondiscriminatory take requirements.Although such regulation has not generally been affirmatively

261、 applied by state agencies,natural gas gathering may receive greater regulatory scrutiny in the future.Intrastate natural gas transportation and facilities are also subject to regulation by state regulatory agencies,and certain transportation services provided by intrastate pipelines are also regula

262、ted by FERC.The basis for intrastate regulation of natural gas transportation and the degree of regulatory oversight and scrutiny given to intrastate natural gas pipeline rates and services varies from state to state.Insofar as such regulation within a particular state will generally affect all intr

263、astate natural gas shippers within the state on a comparable basis,we believe that the regulation of similarly situated intrastate natural gas transportation in any states in which we operate and ship natural gas on an intrastate basis will not affect our operations in any way that is of material di

264、fference from those of our competitors.Like the regulation of interstate transportation rates,the regulation of intrastate transportation rates affects the marketing of natural gas that we produce,as well as the revenues we receive for sales of our natural gas.Regulation of production The production

265、 of oil and natural gas is subject to regulation under a wide range of local,state and federal statutes,rules,orders and regulations.Federal,state and local statutes and regulations require permits for drilling operations,drilling bonds and reports concerning operations.All of the states in which we

266、 own and operate properties have regulations governing conservation matters,including provisions for the unitization or pooling of oil and natural gas properties,the establishment of maximum allowable rates of production from oil and natural gas wells,the regulation of well spacing,and plugging and

267、abandonment of wells.The effect of these regulations is to limit the amount of oil and natural gas that we can produce from our wells and to limit the number of wells or the locations at which we can drill,although we can apply for exceptions to such regulations or to have reductions in well spacing

268、.Moreover,each state generally imposes a production or severance tax with respect to the production and sale of oil,natural gas and NGLs within its jurisdiction.The failure to comply with these rules and regulations can result in substantial penalties.Our competitors in the oil and natural gas indus

269、try are subject to the same regulatory requirements and restrictions that affect our operations.Other federal laws and regulations affecting our industry Energy Policy Act of 2005.On August 8,2005,President Bush signed into law the Energy Policy Act of 2005(EPAct 2005).EPAct 2005 is a comprehensive

270、compilation of tax incentives,authorized appropriations for grants and guaranteed loans,and significant changes to the statutory policy that affects all segments of the energy industry.Among other matters,EPAct 2005 amends the NGA to add an anti-manipulation provision which makes it unlawful for any

271、 entity to engage in prohibited behavior to be prescribed by FERC,and furthermore provides FERC with additional civil penalty authority.EPAct 2005 provides the FERC with the power to assess civil penalties of up to$1.0 million per day for violations of the NGA and increases the FERCs civil penalty a

272、uthority under the NGPA from$5,000 per violation per day to$1.0 million per violation per day.The civil penalty provisions are applicable to entities that engage in the sale of natural gas for resale in interstate commerce.On January 19,2006,24 Table of Contents FERC issued Order No.670,a rule imple

273、menting the anti-manipulation provision of EPAct 2005,and subsequently denied rehearing.The rule makes it unlawful for any entity,directly or indirectly,in connection with the purchase or sale of natural gas subject to the jurisdiction of FERC,or the purchase or sale of transportation services subje

274、ct to the jurisdiction of FERC,to(1)use or employ any device,scheme or artifice to defraud;(2)make any untrue statement of material fact or omit to make any such statement necessary to make the statements made not misleading;or(3)engage in any act,practice,or course of business that operates as a fr

275、aud or deceit upon any person.The new anti-manipulation rules do not apply to activities that relate only to intrastate or other non-jurisdictional sales or gathering,but do apply to activities of gas pipelines and storage companies that provide interstate services,such as Section 311 service,as wel

276、l as otherwise non-jurisdictional entities to the extent the activities are conducted in connection with gas sales,purchases or transportation subject to FERC jurisdiction,which now includes the annual reporting requirements under Order No.704.The anti-manipulation rules and enhanced civil penalty a

277、uthority reflect an expansion of FERCs NGA enforcement authority.Should we fail to comply with all applicable FERC administered statutes,rules,regulations,and orders,we could be subject to substantial penalties and fines.Effective November 4,2009,pursuant to the Energy Independence and Security Act

278、of 2007,the FTC issued a rule prohibiting market manipulation in the petroleum industry.The FTC rule prohibits any person,directly or indirectly,in connection with the purchase or sale of crude oil,gasoline or petroleum distillates at wholesale from:(a)knowingly engaging in any act,practice or cours

279、e of business,including the making of any untrue statement of material fact,that operates or would operate as a fraud or deceit upon any person;or(b)intentionally failing to state a material fact that under the circumstances renders a statement made by such person misleading,provided that such omiss

280、ion distorts or is likely to distort market conditions for any such product.A violation of this rule may result in civil penalties of up to$1.0 million per day per violation,in addition to any applicable penalty under the Federal Trade Commission Act.In July 2010,Congress passed the Dodd-Frank Act,w

281、hich incorporated an expansion of the authority of the Commodity Futures Trading Commission(CFTC)to prohibit market manipulation in the markets regulated by the CFTC.This authority,with respect to crude oil swaps and futures contracts,is similar to the anti-manipulation authority granted to the FTC

282、with respect to crude purchases and sales.In July 2011,the CFTC issued final rules to implement their new anti-manipulation authority.The rules subject violators to a civil penalty of up to the greater of$1 million or triple the monetary gain to the person for each violation.Additional proposals and

283、 proceedings that might affect the oil and natural gas industry are pending before Congress,FERC and the courts.We cannot predict the ultimate impact of these or the above regulatory changes to our operations.We do not believe that we would be affected by any such action materially differently than

284、similarly situated competitors.Environmental and occupational health and safety regulation Our oil and natural gas exploration,development and production operations are subject to stringent and complex federal,regional,state and local laws and regulations governing occupational safety and health,the

285、 emission or discharge of materials into the environment and environmental protection.Numerous governmental entities,including the U.S.Environmental Protection Agency(EPA),analogous state agencies,and,in certain instances,citizens groups,have the power to enforce compliance with these laws and regul

286、ations and the permits issued under them,often requiring difficult and costly actions.These laws and regulations may,among other things(i)require the acquisition of permits to conduct drilling and other regulated activities;(ii)restrict the types,quantities and concentration of various substances th

287、at can be released into the environment or injected into formations in connection with oil and natural gas drilling and production activities;(iii)limit or prohibit drilling activities on certain lands lying within wilderness,wetlands and other protected areas;25 Table of Contents (iv)require remedi

288、al measures to mitigate pollution from former and ongoing operations,such as requirements to close waste pits and plug abandoned wells;(v)impose specific safety and health criteria addressing worker protection;and(vi)impose substantial liabilities for pollution resulting from drilling and production

289、 operations.Any failure to comply with these laws and regulations may result in the assessment of administrative,civil and criminal penalties,the imposition of corrective or remedial obligations and the issuance of injunctions prohibiting some or all of our operations.These laws and regulations may

290、also restrict the rate of oil and natural gas production below the rate that would otherwise be possible.The regulatory burden on the oil and natural gas industry increases the cost of doing business in the industry and consequently affects profitability.The trend in environmental regulation is to p

291、lace more restrictions and limitations on activities that may affect the environment,and thus,any changes in federal or state environmental laws and regulations or re-interpretation of applicable enforcement policies that result in more stringent and costly well construction,drilling,water managemen

292、t or completion activities,or waste handling,storage,transport,disposal or remediation requirements or that limit or otherwise restrict the emission of certain pollutants or organic compounds from wells or surface equipment could have a material adverse effect on our operations and financial positio

293、n.We may be unable to pass on such increased compliance costs to our customers.Moreover,accidental releases or spills may occur in the course of our operations,and we cannot assure you that we will not incur significant costs and liabilities as a result of such releases or spills,including any third

294、 party claims for damage to property,natural resources or persons.While we believe that we are in substantial compliance with existing environmental laws and regulations and that continued compliance with current requirements would not have a material adverse effect on our financial condition or res

295、ults of operations,there is no assurance that we will be able to remain in compliance in the future with existing or any new laws and regulations or that future compliance with such laws and regulations will not have a material adverse effect on our business and operating results.The following is a

296、summary of the more significant existing environmental,and occupational health and safety laws and regulations to which our business operations are subject and for which compliance may have a material adverse impact on our capital expenditures,results of operations or financial position.Hazardous su

297、bstances and wastes The Comprehensive Environmental Response,Compensation,and Liability Act,as amended(CERCLA),also known as the Superfund law,and comparable state laws impose liability without regard to fault or the legality of the original conduct on certain classes of persons who are considered t

298、o be responsible for the release of a hazardous substance into the environment.These classes of persons include current and prior owners or operators of the site where the release occurred and entities that disposed of or arranged for the disposal of the hazardous substances at a site where a releas

299、e has occurred.Under CERCLA,these responsible parties may be subject to strict,joint and several liability for the costs of removing and cleaning up the hazardous substances that have been released into the environment,for damages to natural resources,and for the costs of certain health studies.CERC

300、LA also authorizes the EPA and,in some instances,third parties to act in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur.It is not uncommon for neighboring landowners and other third parties to file claim

301、s for personal injury and property damage allegedly caused by the release of hazardous substances or other pollutants into the environment.Despite the petroleum exclusion of Section 101(14)of CERCLA,which currently encompasses crude oil and natural gas,we may nonetheless handle hazardous substances

302、within the meaning of CERCLA,or similar state statutes,in the course of our ordinary operations and,as a result,may be jointly and severally liable under CERCLA for all or part of the costs required to clean up sites at which these hazardous substances have been released into the environment.26 Tabl

303、e of Contents We also are subject to the requirements of the Resource Conservation and Recovery Act,as amended(RCRA),and comparable state statutes.RCRA imposes strict requirements on the generation,storage,treatment,transportation and disposal of hazardous and nonhazardous wastes.Under the authority

304、 of the EPA,most states administer some or all of the provisions of RCRA,sometimes in conjunction with their own,more stringent requirements.Although RCRA currently exempts certain drilling fluids,produced waters,and other wastes associated with exploration,development and production of oil and natu

305、ral gas from regulation as hazardous wastes,we can provide no assurance that this exemption will be preserved in the future.From time to time the EPA and analogous state agencies have considered repealing or modifying this exemption,and citizens groups have also petitioned the agency consider its re

306、peal.Repeal or modification of this exemption or similar exemptions under state law could have a significant impact on our operating costs as well as the oil and natural gas industry in general.The impact of future revisions to environmental laws and regulations cannot be predicted.In any event,at p

307、resent,these excluded wastes are subject to regulation as RCRA nonhazardous wastes.In addition,we generate petroleum hydrocarbon wastes and ordinary industrial wastes in the course of our operations that may become regulated as RCRA hazardous wastes if such wastes have hazardous characteristics.We c

308、urrently own or lease,and have in the past owned or leased,properties that have been used for numerous years to explore and produce oil and natural gas.Although we have utilized operating and disposal practices that were standard in the industry at the time,petroleum hydrocarbons and wastes may have

309、 been disposed of or released on or under the properties owned or leased by us or on or under other locations where these petroleum hydrocarbons and wastes have been taken for recycling or disposal.In addition,certain of these properties have been operated by the third parties whose treatment and di

310、sposal or release of petroleum hydrocarbons and wastes was not under our control.These properties and wastes disposed thereon may be subject to CERCLA,RCRA and analogous state laws.Under these laws,we could be required to remove or remediate previously disposed wastes(including wastes disposed of or

311、 released by prior owners or operators),to clean up contaminated property(including contaminated groundwater)and to perform remedial operations to prevent future contamination.Air emissions The Clean Air Act,as amended(CAA),and comparable state laws,regulate emissions of various air pollutants throu

312、gh air emissions standards,construction and operating permitting programs and the imposition of other compliance requirements.These laws and regulations may require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly i

313、ncrease air emissions,obtain and strictly comply with stringent air permit requirements or utilize specific equipment or technologies to control emissions of certain pollutants.The need to obtain permits has the potential to delay the development of oil and natural gas projects.Over the next several

314、 years,we may be required to incur certain capital expenditures for air pollution control equipment or other air emissions related issues.For example,in 2012,the EPA published final rules under the CAA that subject oil and natural gas production,processing,transmission and storage operations to regu

315、lation under the New Source Performance Standards(NSPS)and National Emission Standards for Hazardous Air Pollutants(NESHAP)programs.With regards to production activities,these final rules require,among other things,that certain of the natural gas wells being fractured or re-fractured must use reduce

316、d emission completions,also known as green completions,with or without combustion devices,beginning in January 2015.These regulations also establish specific requirements regarding emissions from production-related wet seal and reciprocating compressors and from pneumatic controllers and storage ves

317、sels.In a more recent example,in December 2014,the EPA published a proposed regulation that it expects to finalize by October 1,2015 that would revise the National Ambient Air Quality Standard for ozone,recommending a standard between 65 to 70 parts per billion(ppb)for both the 8-hour primary and se

318、condary standards protective of public health and 27 Table of Contents public welfare.If the EPA lowers the ozone standard,states could be required to implement more stringent regulations,which could,among other things,require installation of new emission controls on some of the drilling programs eq

319、uipment,result in longer permitting timelines,and significantly increase the partnerships capital expenditures and drilling programs operating costs,which could adversely impact our business.Compliance with any one or more of these requirements could increase our costs of development and production,

320、which costs could be significant.Climate change Based on the EPAs determination that emissions of carbon dioxide,methane and other greenhouse gases(GHGs)present an endangerment to public health and the environment because emissions of such gases are,according to the EPA,contributing to the warming o

321、f the earths atmosphere and other climatic changes,the agency has adopted regulations under existing provisions of the federal CAA that,among other things,establish pre-construction and operating permit reviews for GHG emissions from certain large stationary sources that already are potential major

322、sources of certain principal,or criteria,pollutant emissions.Facilities required to obtain permits for their GHG emissions also will be required to meet best available control technology standards that typically will be established by the states.In addition,the EPA has adopted regulations requiring

323、the monitoring and annual reporting of GHG emissions from specified sources in the United States,including,among others,certain oil and natural gas production facilities,which includes certain of our operations.We are monitoring GHG emissions from our operations in accordance with the GHG emissions

324、reporting rule and believe that our monitoring activities are in substantial compliance with applicable reporting obligations.These EPA regulations could adversely affect our operations and restrict or delay our ability to obtain air permits for new or modified facilities.We cannot predict which are

325、as,if any,the EPA may choose to regulate with respect to GHG emissions next.While Congress has from time to time considered legislation to reduce emissions of GHGs,there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years.

326、In the absence of such federal climate legislation,a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of cap and trade programs that typically require major sources of GHG emissions to acquire and surrender emission allowances in ret

327、urn for emitting those GHGs.Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business,such requirements could require us to obtain permits for our GHG emissions,install costly emission controls,pay fe

328、es on the emissions data,and adversely affect demand for the oil and natural gas that we produce.For example,in January 2015,the Obama Administration announced that the EPA is expected to propose in the summer of 2015 and finalize in 2016 new regulations that will set methane emission standards for

329、new and modified oil and natural gas production and natural gas processing and transmission facilities as part of the Administrations efforts to reduce methane emissions from the oil and natural gas sector by up to 45 percent from 2012 levels by 2025.Finally,it should be noted that some scientists h

330、ave concluded that increasing concentrations of GHGs in the Earths atmosphere may produce climate changes that have significant physical effects,such as increased frequency and severity of storms,droughts and floods and other climatic events.If any such effects were to occur,they could have an adver

331、se effect on our financial condition and results of operations.Water discharges and fluid injections The Federal Water Pollution Control Act,as amended(the Clean Water Act),and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants into state waters and wa

332、ters of the United States.The discharge of pollutants into regulated waters is prohibited,except in accordance with the terms of a permit issued by the EPA or the analogous state agency.Spill prevention,control and countermeasure requirements under federal law require appropriate 28 Table of Content

333、s containment berms and similar structures to help prevent the contamination of navigable waters in the event of a petroleum hydrocarbon tank spill,rupture or leak.In addition,the Clean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities,including oil and natural gas production facilit