##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-33571
 DOUBLE EAGLE PETROLEUM CO.
  MARYLAND
    
    83-0214692(State or other jurisdiction of
    
    (I.R.S. employerincorporation or organization)
    
    identification no.)
 1675 Broadway, Suite 2200, Denver, Colorado 80202
 303-794-8445
 None
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    

Small reporting company o(Do not check if a small reporting company)
 o þ
  Class
    
    Outstanding as of April 20, 2010Common stock, $.10 par value
    
    11,116,589




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##### 



Page #PART I. Financial Information:Item 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2010 (Unaudited)
and December 31, 2009
    
    
    2Consolidated Statements of Income for the Quarter
Ended March 31, 2010 and 2009 (Unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Quarter
Ended March 31, 2010 and 2009 (Unaudited)
    
    
    4Notes to Consolidated Financial Statements (Unaudited)
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II. Other Information:Item 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    22Signatures
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32
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ITEM 1. FINANCIAL STATEMENTS
 DOUBLE EAGLE PETROLEUM CO.
 
 CONSOLIDATED BALANCE SHEETS  (Amounts in thousands of dollars except share and per share data)
 March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,449
    
    
    $
    5,682Cash held in escrow
    
    
    612
    
    
    
    611Accounts receivable
    
    
    6,541
    
    
    
    6,772Assets from price risk management
    
    
    3,769
    
    
    
    Other current assets
    
    
    4,364
    
    
    
    3,982Total current assets
    
    
    20,735
    
    
    
    17,047Oil and gas properties and equipment, successful efforts method:Developed properties
    
    
    166,019
    
    
    
    165,279Wells in progress
    
    
    7,513
    
    
    
    7,544Gas transportation pipeline
    
    
    5,465
    
    
    
    5,465Undeveloped properties
    
    
    2,607
    
    
    
    2,502Corporate and other assets
    
    
    1,925
    
    
    
    1,914183,529
    
    
    
    182,704Less accumulated depreciation, depletion and amortization
    
    
    (58,222
    )
    
    
    (53,682
    )Net properties and equipment
    
    
    125,307
    
    
    
    129,022Assets from price risk management
    
    
    4,696
    
    
    
    3,566Other assets
    
    
    848
    
    
    
    859TOTAL ASSETS
    
    $
    151,586
    
    
    $
    150,494LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    6,227
    
    
    $
    6,177Accrued expenses
    
    
    4,684
    
    
    
    6,918Liabilities from price risk management
    
    
    
    
    
    
    4,739Accrued production taxes
    
    
    3,142
    
    
    
    2,439Capital lease obligations, current portion
    
    
    525
    
    
    
    533Other current liabilities
    
    
    307
    
    
    
    308Total current liabilities
    
    
    14,885
    
    
    
    21,114Credit facility
    
    
    31,000
    
    
    
    34,000Asset retirement obligation
    
    
    4,834
    
    
    
    4,807Liabilities from price risk management
    
    
    
    
    
    
    430Deferred tax liability
    
    
    8,848
    
    
    
    4,620Capital lease obligations, long-term portion
    
    
    410
    
    
    
    545Other long-term liabilities
    
    
    205
    
    
    
    282Total liabilities
    
    
    60,182
    
    
    
    65,798Preferred stock, $0.10 par value; 10,000,000 shares authorized;
1,610,000 shares issued and outstanding as of
March 31, 2010 and December 31, 2009
    
    
    37,972
    
    
    
    37,972Stockholders equity:Common stock, $0.10 par value; 50,000,000 shares authorized;
11,106,108 and 11,090,725 shares issued and outstanding as of
March 31, 2010 and December 31, 2009, respectively
    
    
    1,111
    
    
    
    1,109Additional paid-in capital
    
    
    43,916
    
    
    
    43,640Retained earnings
    
    
    4,836
    
    
    
    (342
    )Accumulated other comprehensive income
    
    
    3,569
    
    
    
    2,317Total stockholders equity
    
    
    53,432
    
    
    
    46,724TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    151,586
    
    
    $
    150,494
   2




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DOUBLE EAGLE PETROLEUM CO.
 
 CONSOLIDATED STATEMENTS OF INCOME  (Amounts in thousands of dollars except share and per share data)
 Three months ended March 31,2010
    
    
    2009RevenuesOil and gas sales
    
    $
    11,049
    
    
    $
    10,500Transportation revenue
    
    
    1,487
    
    
    
    1,587Price risk management activities
    
    
    7,822
    
    
    
    (1,140
    )Other income, net
    
    
    77
    
    
    
    93Total revenues
    
    
    20,435
    
    
    
    11,040Costs and expensesProduction costs
    
    
    1,943
    
    
    
    1,611Production taxes
    
    
    1,300
    
    
    
    889Exploration expenses including dry hole
costs
    
    
    38
    
    
    
    26Pipeline operating costs
    
    
    1,149
    
    
    
    568General and administrative
    
    
    1,534
    
    
    
    1,674Depreciation, depletion and amortization
    
    
    4,540
    
    
    
    4,382Total costs and expenses
    
    
    10,504
    
    
    
    9,150Income from operations
    
    
    9,931
    
    
    
    1,890Interest expense, net
    
    
    (365
    )
    
    
    (252
    )Income before income taxes
    
    
    9,566
    
    
    
    1,638Provision for deferred income taxes
    
    
    (3,457
    )
    
    
    (631
    )NET INCOME
    
    $
    6,109
    
    
    $
    1,007Preferred stock dividends
    
    
    931
    
    
    
    931Net income attributable to common stock
    
    $
    5,178
    
    
    $
    76Net income per common share:Basic
    
    $
    0.47
    
    
    $
    0.01Diluted
    
    $
    0.47
    
    
    $
    0.01Weighted average shares outstanding:Basic
    
    
    11,105,646
    
    
    
    9,201,913Diluted
    
    
    11,105,646
    
    
    
    9,201,913
   3




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DOUBLE EAGLE PETROLEUM CO.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (Amounts in thousands of dollars)
 Three months ended March 31,2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    6,109
    
    
    $
    1,007Adjustments to reconcile net income to net cash from
operating activities:Depreciation, depletion, amortization and accretion
of asset retirement obligation
    
    
    4,560
    
    
    
    4,406Abandonment of non-producing properties
    
    
    
    
    
    
    5Provision for deferred taxes
    
    
    3,457
    
    
    
    631Employee stock option expense
    
    
    227
    
    
    
    430Directors fees paid in stock
    
    
    49
    
    
    
    38Change in fair value of derivative contracts
    
    
    (8,045
    )
    
    
    4,066Revenue from carried interest
    
    
    (716
    )
    
    
    (563
    )Gain on sale of producing property
    
    
    (72
    )
    
    
    (70
    )Changes in current assets and liabilities:Increase in deposit held in escrow
    
    
    (1
    )
    
    
    (2
    )Decrease in accounts receivable
    
    
    236
    
    
    
    11,949Decrease (Increase) in other current assets
    
    
    (424
    )
    
    
    38Increase (Decrease) in accounts payable
    
    
    1,661
    
    
    
    (12,242
    )Increase (Decrease) in accrued expenses
    
    
    2,240
    
    
    
    (2,847
    )Increase in accrued production taxes
    
    
    411
    
    
    
    89NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    9,692
    
    
    
    6,935Cash flows from investing activities:Additions of producing properties and equipment, net
    
    
    (5,737
    )
    
    
    (21,429
    )Additions of corporate and non-producing properties
    
    
    (116
    )
    
    
    (15
    )Payment of acquisition related costs
    
    
    
    
    
    
    (102
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (5,853
    )
    
    
    (21,546
    )Cash flows from financing activities:Principal payments on capital lease obligations
    
    
    (143
    )
    
    
    (129
    )Issuance of stock under Company stock plans
    
    
    5
    
    
    
    4Tax withholdings related to net share settlement of
restricted stock awards
    
    
    (3
    )
    
    
    (23
    )Dividends on preferred stock
    
    
    (931
    )
    
    
    (931
    )Net borrowings (repayments) on line of credit
    
    
    (3,000
    )
    
    
    17,861NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
    
    (4,072
    )
    
    
    16,782Change in cash and cash equivalents
    
    
    (233
    )
    
    
    2,171Cash and cash equivalents at beginning of period
    
    
    5,682
    
    
    
    CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    5,449
    
    
    $
    2,171Supplemental disclosure of cash and non-cash transactions:Cash paid for interest
    
    $
    448
    
    
    $
    643Interest capitalized
    
    $
    50
    
    
    $
    300Additions to developed properties included in current liabilities
    
    $
    3,092
    
    
    $
    8,758Share-based compensation expense
    
    $
    276
    
    
    $
    468
   4




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DOUBLE EAGLE PETROLEUM CO.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Amounts in thousands of dollars except share and per share data)
 1.
    
    Summary of Significant Accounting Policies
 Basis of presentation
     Principles of consolidation
  Recently adopted accounting pronouncements
  2.
    
    Earnings per share
   5




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For the Quarter Ended March 31,2010
    
    
    2009Net income
    
    $
    6,109
    
    
    $
    1,007Preferred stock dividends
    
    
    931
    
    
    
    931Net income attributable to common stock
    
    $
    5,178
    
    
    $
    76Weighted average shares:Weighted average shares  basic
    
    
    11,105,646
    
    
    
    9,201,913Dilution effect of stock options
outstanding at the end of period
    
    
    
    
    
    
    Weighted average shares  diluted
    
    
    11,105,646
    
    
    
    9,201,913Earnings per common share:Basic
    
    $
    0.47
    
    
    $
    0.01Diluted
    
    $
    0.47
    
    
    $
    0.01
  For the Quarter Ended March 31,2010
    
    
    2009Anti-dilutive shares
    
    
    81,116
    
    
    
    90,809
 3.
    
    Derivative Instruments
     Cash flow hedges
   6




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Mark to market hedging instruments
   Contract Settlement DateNatural Gas forward purchase contracts:
    
    2010
    
    
    2011Volume (MMcf)
    
    
    6,050
    
    
    
    5,650
  Derivatives designated as hedginginstruments under ASC 815
    
    Balance Sheet Location
    
    Fair ValueAssetsCommodity derivatives
    
    Assets from price risk management  current
    
    $
    1,366Assets from price risk management  long term
    
    
    4,223Total
    
    
    
    $
    5,589
 Derivatives not designated ashedging instruments under ASC 815
    
    Balance Sheet Location
    
    Fair ValueAssetsCommodity derivatives
    
    Assets from price risk management  current
    
    $
    2,403Assets from price risk management  long term
    
    
    473Total
    
    
    
    $
    2,876
  Derivatives Designated
    
    Amount of Gain Recognized inas Cash Flow
    
    OCI 1 on Derivative forHedging Instruments
    
    Three months ended March 31,under ASC 815
    
    2010
    
    
    2009Commodity contracts
    
    $
    2,023
    
    
    $
    (4,865
    )
  7




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Location of GainAmount of Gain Reclassified from Accumulated
    
    
    Recognized in IncomeLocation of Gain Reclassified
    
    OCI into Income for
    
    
    (Ineffective Portion andfrom Accumulated OCI 1
    
    Three months ended March 31,
    
    
    Amount Excluded frominto Income (effective portion)
    
    2010
    
    
    2009
    
    
    Effectiveness testing)Oil and gas sales
    
    $
    
    
    
    $
    4,147
    
    
    
    N/A
 1
    
    Other comprehensive income (OCI).  Derivatives not
    
    
    
    Amount of Loss Recognized inDesignated as
    
    Location of Loss
    
    Income on DerivativeHedging Instruments
    
    Recognized in Income
    
    Three months ended March 31,under ASC 815
    
    on Derivative
    
    2010
    
    
    2009Commodity contracts
    
    Price risk management activities
    
    $
    7,822
    
    
    $
    (1,140
    )
  4.
    
    Fair Value of Financial Instruments
  
    
    Level 1 
    
    Quoted prices (unadjusted) for identical assets or liabilities in active
markets.
    
    Level 2 
    
    Quoted prices for similar assets or liabilities in active markets; quoted
prices for identical or similar
assets or liabilities in markets that are not active; and model-derived valuations
whose inputs or significant value drivers are observable.
    
    Level 3 
    
    Unobservable inputs that reflect the Companys own assumptions.
  Cash and cash equivalents
  Derivative instruments
    8




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Credit facility
  Asset retirement obligations
   Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsDerivative instruments 
Commodity forward contracts
    
    $
    
    
    
    $
    8,465
    
    
    $
    
    
    
    $
    8,465Total assets at fair value
    
    $
    
    
    
    $
    8,465
    
    
    $
    
    
    
    $
    8,465LiabilitiesAsset retirement obligation
    
    $
    
    
    
    $
    
    
    
    $
    4,834
    
    
    $
    4,834Total liabilities at fair value
    
    $
    
    
    
    $
    
    
    
    $
    4,834
    
    
    $
    4,834
  December 31, 2009 asset retirement obligation
    
    $
    4,807Liabilities incurred
    
    
    7Accretion expense
    
    
    20March 31, 2010 asset retirement obligation
    
    $
    4,834
   Concentration of credit risk
    9




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5.
    
    Impairment of Long-Lived Assets
  6.
    
    Compensation Plans
    Weighted-AverageWeighted-
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateExercise
    
    
    Term (in
    
    
    IntrinsicOptions:
    
    Shares
    
    
    Price
    
    
    years)
    
    
    ValueOutstanding at January 1, 2010
    
    
    647,897
    
    
    $
    15.06
    
    
    
    4.7Granted
    
    
    80,380
    
    
    $
    4.50Exercised
    
    
    Cancelled/expired
    
    
    (10,000
    )
    
    $
    14.00Outstanding at March 31, 2010
    
    
    718,277
    
    
    $
    13.89
    
    
    
    4.9
    
    
    $
    Exercisable at March 31, 2010
    
    
    310,535
    
    
    $
    15.23
    
    
    
    3.7
    
    
    $
    
   10




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Weighted-AverageGrant DateStock Awards:
    
    Shares
    
    
    Fair ValueNonvested at January 1, 2010
    
    
    87,448
    
    
    $
    12.38Granted
    
    
    20,331
    
    
    $
    4.50Vested
    
    
    (15,622
    )
    
    $
    5.33Forfeited/returned
    
    
    
    
    
    $
    Nonvested at March 31, 2010
    
    
    92,157
    
    
    $
    11.68
  7.
    
    Income Taxes
   8.
    
    Credit Facility
     11




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9.
    
    Acquisition of Petrosearch
  10.
    
    Series A Cumulative Preferred Stock
   Redemption Date on or Before
    
    Redemption PriceJune 30, 2010
    
    $
    25.50June 30, 2011
    
    $
    25.25June 30, 2012 or thereafter
    
    $
    25.00
  11.
    
    Comprehensive Income (Loss)
  For the Quarter Ended March 31,2010
    
    
    2009Net income attributable to common stock
    
    $
    5,178
    
    
    $
    76Change in derivative
instrument
fair value, net of tax
of $771 and $0
    
    
    1,252
    
    
    
    (4,865
    )Reclassification to earnings
    
    
    
    
    
    
    4,147Comprehensive income (loss)
    
    $
    6,430
    
    
    $
    (642
    )
  12




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March 31,
    
    
    December 31,2010
    
    
    2009Net change in derivative instrument fair value, net
of tax of $2,020 and $1,249
    
    $
    3,569
    
    
    $
    2,317Total accumulated other comprehensive income, net
    
    $
    3,569
    
    
    $
    2,317
 12.
    
    Cash Held in Escrow
  13.
    
    Contingencies
 Legal proceedings
     13




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING STATEMENTS
 This Quarterly Report on Form 10-Q includes forward-looking statements as defined by the
Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance
on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, included in this Form 10-Q that address
activities, events or developments that we expect, believe or anticipate will or may occur in the
future are forward-looking statements. These forward-looking statements are based on assumptions
which we believe are reasonable based on current expectations and projections about future events
and industry conditions and trends affecting our business. However, whether actual results and
developments will conform to our expectations and predictions is subject to a number of risks and
uncertainties that, among other things, could cause actual results to differ materially from those
contained in the forward-looking statements, including without limitation the Risk Factors set
forth in our Annual Report on Form 10-K for the year ended December 31, 2009, including the
following:
 
    
    Our ability to maintain adequate liquidity in connection with low oil and gas prices;
    
    The changing political environment in which we operate;
    
    Our ability to continue to develop our Atlantic Rim project;
    
    Our ability to obtain, or a decline in, oil or gas production;
    
    A decline in oil or gas prices;
    
    Our ability to increase our natural gas and oil reserves;
    
    Incorrect estimates of required capital expenditures;
    
    The amount and timing of capital deployment in new investment opportunities;
    
    The volumes of production from our oil and gas development properties, which may be
dependent upon issuance by federal, state, and tribal governments, or agencies thereof, of
drilling, environmental and other permits, and the availability of specialized
contractors, work force, and equipment;
    
    Our future capital requirements and availability of capital resources to fund capital
expenditures;
    
    Our ability to successfully integrate and profitably operate any future acquisitions;
    
    Increases in the cost of drilling, completion and gas collection or other costs of
production and operations;
    
    The possibility that we may be required to take impairment charges to reduce the
carrying value of some of our long-lived assets when indicators of impairment emerge;
    
    Numerous uncertainties inherent in estimating quantities of proved oil and gas reserves
and actual future production rates and associated costs;
    
    Our ability to remedy any deficiencies that may be identified in the review of our
internal controls;
    
    The credit worthiness of third-parties which we enter into business agreements with;
    
    General economic conditions, tax rates or policies, interest rates and inflation rates;
    
    Changes in or compliance with laws and regulations, particularly those relating to
taxation, safety and protection of the environment;
    
    Weather, climate change and other natural phenomena;
    
    Industry and market changes, including the impact of consolidations and changes in
competition;
    
    The effect of accounting policies issued periodically by accounting standard-setting
bodies;
    
    The actions of third party co-owners of interests in properties in which we also own an
interest;
    
    The cost and effects on our business, including insurance, resulting from terrorist
actions or natural disasters and responses to such actions or events;
    
    The volatility of our stock price; and
    
    The outcome of any current or future litigation or similar disputes and the impact on
any such outcome or related settlements.
   14




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
    
    Average Daily Production
 During the quarter ended March 31, 2010, our total average daily net production
decreased 2% to 24,907 Mcfe as compared to average daily production of 25,340 Mcfe
during the same prior-year period. The changes in production by major operating area
are discussed below.Atlantic Rim.During the quarter ended March 31, 2010, average daily net
production at the Atlantic Rim increased 3% to 18,261 Mcfe, as compared to 17,797 Mcfe
during the first quarter of 2009. Average daily net production at our Catalina Unit
decreased 6% to 15,599 Mcfe, as compared to 16,583 Mcfe during the same prior-year
period. The decrease was due in part to the continuation of our well enhancement
program that began in the third quarter of 2009, which requires wells to be temporarily
off-line. In addition, we are reconfiguring our compressors in an effort to maximize
well performance by reducing suction pressure at the well head, which is expected to
increase the output from each well. Average daily production, net to our interest, at
the Sun Dog and Doty Mountain Units increased 119% to 2,662 Mcfe, as compared to
average daily production of 1,214 Mcfe during the first quarter of 2009. The increase
was primarily due to the additional compression capacity added at the Doty Mountain
Unit in the first quarter of 2010 and increased production from well stimulations in
the Sun Dog Unit.Pinedale Anticline. Average daily production at the Pinedale Anticline
decreased 18% to 5,014 Mcfe for the quarter ended March 31, 2010, as compared to 6,148
Mcfe in the first quarter of 2009. Management believes that the production decline at
the Mesa Units is related to the operator managing the production flow from the field
due to the low gas prices in the Rocky Mountain region and the planned deferral of well
completions during the coldest winter months each year.Madden Deep Unit. During the quarter ended March 31, 2010, our average daily
net production at the Madden Deep Unit increased 51% to 584 Mcfe, as compared to 388
Mcfe in the quarter ended March 31, 2009.
  15




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
    
    Oil and Gas Sales
 During the quarter ended March 31, 2010, net oil and gas sales increased 5% to $11,049,
as compared to $10,500 during the first quarter of 2009. The increase in oil and gas
sales was driven by higher natural gas prices. During the quarter ended March 31,
2010, the average CIG price increased 57% as compared to the same prior-year period.
Our average gas price received decreased 20%, however, to $4.70 from $5.90 for the same
period primarily due to lower recognized income from our derivative instruments. In
calculating our average realized gas price, we sum 1) production revenue received from
third parties for sale of our gas, which is included in the oil and gas sales line item
on the consolidated statement of income; 2) settlement of
our cash flow hedges included within oil and gas sales on the consolidated statement of
income; and 3) realized gain/(loss) on our economic hedges, which is included in our
price risk management activities line on the consolidated statement of income, totaling
$(223) and $2,926, for the quarters ended March 31, 2010 and 2009, respectively. Due
to the strength of our hedges in the first quarter of 2009, we realized a gas price
that was $2.86 higher than the average market CIG price during the period. Oil and gas
sales, plus the realized settlements on our derivative instruments included within the
price risk management line on the consolidated statement of income, totaled $10,826 for
the quarter ended March 31, 2010, as compared to $13,426 for the first quarter of 2009.
 
    
    Cash Flow from Operations
 During the quarter ended March 31,
2010, we generated cash flow from operations of
$9,692, as compared to cash flow of $6,935 in the quarter ended
March 31, 2009.
 OVERVIEW OF FINANCIAL CONDITION AND LIQUIDITY
 Liquidity and Capital Resources
   March 31,
    
    
    December 31,2010
    
    
    2009(unaudited)Financial Position SummaryCash and cash equivalents
    
    $
    5,449
    
    
    $
    5,682Working capital
    
    $
    5,850
    
    
    $
    (4,067
    )Balance outstanding on credit facility
    
    $
    31,000
    
    
    $
    34,000Stockholders equity and preferred stock
    
    $
    91,404
    
    
    $
    84,696RatiosDebt to total capital ratio
    
    
    25.3
    %
    
    
    28.6
    %Total debt to equity ratio
    
    
    58.0
    %
    
    
    72.8
    %
  Cash flow activities
  Quarter ended March 31,2010
    
    
    2009(unaudited)Cash provided by (used in):Operating activities
    
    $
    9,692
    
    
    $
    6,935Investing activities
    
    
    (5,853
    )
    
    
    (21,546
    )Financing activities
    
    
    (4,072
    )
    
    
    16,782Net change in cash
    
    $
    (233
    )
    
    $
    2,171
  16




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##### Table of Contents



Off-Balance Sheet Arrangements
   Line of Credit
  
   Capital Requirements
   17




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##### Table of Contents



Contractual Obligations
  One year
    
    
    2  3
    
    
    4  5
    
    
    More thanTotal
    
    
    or less
    
    
    Years
    
    
    Years
    
    
    5 YearsCredit
facility (a)
    
    $
    31,000
    
    
    $
    
    
    
    $
    31,000
    
    
    $
    
    
    
    $
    Interest on line of credit (b)
    
    
    4,014
    
    
    
    1,414
    
    
    
    2,600
    
    
    
    
    
    
    
    Capital leases
    
    
    1,316
    
    
    
    752
    
    
    
    564
    
    
    
    
    
    
    
    Operating leases
    
    
    8,761
    
    
    
    2,350
    
    
    
    5,211
    
    
    
    1,143
    
    
    
    57Total contractual cash
commitments
    
    $
    45,091
    
    
    $
    4,516
    
    
    $
    39,375
    
    
    $
    1,143
    
    
    $
    57
 (a)
    
    The amount listed reflects the balance outstanding as of March 31, 2010. Any balance
outstanding on our credit facility at January 31, 2013, will be due at that time.(b)
    
    Assumes the interest rate on our credit facility is consistent with that of March 31,
2010. RESULTS OF OPERATIONS
 Quarter ended March 31, 2010 compared to the quarter ended March 31, 2009
 Oil and gas sales volume and price comparisons
 Quarter Ended March 31,
    
    
    Percent
    
    
    Percent2010
    
    
    2009
    
    
    Volume
    
    
    PriceVolume
    
    
    Average Price
    
    
    Volume
    
    
    Average Price
    
    
    Change
    
    
    ChangeProduct:Gas (Mcf)
    
    
    2,200,010
    
    
    $
    4.70
    
    
    
    2,234,415
    
    
    $
    5.90
    
    
    
    -2
    %
    
    
    -20
    %Oil (Bbls)
    
    
    6,936
    
    
    $
    71.43
    
    
    
    7,696
    
    
    $
    30.68
    
    
    
    -10
    %
    
    
    133
    %Mcfe
    
    
    2,241,624
    
    
    $
    4.83
    
    
    
    2,280,591
    
    
    $
    5.89
    
    
    
    -2
    %
    
    
    -18
    %
      18




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##### Table of Contents



Transportation and gathering revenue
  Price risk management activities
  Oil and gas production expenses, depreciation, depletion and amortization
 Quarter Ended March 31,2010
    
    
    2009(unaudited, in dollars per mcfe)Average price
    
    $
    4.83
    
    
    $
    5.89Production costs
    
    
    0.87
    
    
    
    0.71Production taxes
    
    
    0.58
    
    
    
    0.39Depletion and amortization
    
    
    1.98
    
    
    
    1.88Total operating costs
    
    
    3.43
    
    
    
    2.98Gross margin
    
    $
    1.40
    
    
    $
    2.91Gross margin percentage
    
    
    29
    %
    
    
    49
    %
    19




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##### Table of Contents



Pipeline operating costs
  General and administrative expenses
  Income taxes
  CONTRACTED VOLUMES
   RemainingContractual
    
    
    Daily
    
    
    
    
    
    
    PriceType of Contract
    
    Volume
    
    
    Production
    
    
    Term
    
    Price
    
    Index (1)Fixed Price Swap
    
    
    3,300,000
    
    
    
    12,000
    
    
    1/10-12/10
    
    $4.30
    
    CIGFixed Price Swap
    
    
    2,920,000
    
    
    
    8,000
    
    
    1/11-12/11
    
    $7.07
    
    CIGCostless Collar
    
    
    2,435,000
    
    
    
    5,000
    
    
    8/09-7/11
    
    $4.50 floor
    
    NYMEX$7.90 ceilingCostless Collar
    
    
    3,045,000
    
    
    
    5,000
    
    
    12/09-11/11
    
    $4.50 floor
    
    NYMEX$9.00 ceilingTotal
    
    
    11,700,000
 (1)
    
    NYMEX refers to quoted prices on the New York Mercantile Exchange. CIG refers to the
Colorado Interstate Gas price as quoted on the first day of each month.  20




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##### Table of Contents



CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Price Risks
   Interest Rate Risks
  
 ITEM 4. CONTROLS AND PROCEDURES
    21




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##### Table of Contents



ITEM 1. LEGAL PROCEEDINGS
    
 ITEM 1A. RISK FACTORS
  
 ITEM 6. EXHIBITS
  Exhibit
    
    Description:3.1
    (a)
    
    Articles of Incorporation filed with the Maryland Secretary of State on January 23, 2001
(incorporated by reference from Exhibit 3.1(a) of the Companys Annual Report on Form
10-KSB for the year ended August 31, 2001).3.1
    (b)
    
    Certificate of Correction filed with the Maryland Secretary of State on February 15, 2001
concerning the Articles of Incorporation (incorporated by reference from Exhibit 3.1(b) of
the Companys Annual Report on Form 10-KSB for the year ended August 31, 2001).3.1
    (c)
    
    Articles of Merger filed with the Maryland Secretary of State on February 15, 2001
(incorporated by reference from Exhibit 3.1(c) of the Companys Annual Report on Form
10-KSB for the year ended August 31, 2001).3.1
    (d)
    
    Certificate of Correction filed with the Maryland Secretary of State (incorporated by
reference from Exhibit 3 of the Companys Quarterly Report on Form 10-QSB for the quarter
ended November 30, 2001).3.1
    (e)
    
    Certificate of Correction to the Articles of Incorporation, filed with the Maryland
Department of Assessments and Taxation on June 1, 2007 (incorporated by reference from
Exhibit 3.3 of the Companys Current Report of Form 8-K dated June 29, 2007).3.1
    (f)
    
    Articles of Amendment, filed with the Maryland Department of Assessments and Taxation on
June 26, 2007 (incorporated by reference from Exhibit 3.1 of the companys Current report
on Form 8-K dated June 29, 2007).
  22




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##### Table of Contents



Exhibit
    
    Description:3.1
    (g)
    
    Articles Supplementary, filed with the Maryland Department of Assessments and Taxation on
June 29, 2007 (incorporated by reference from Exhibit 3.2 of the Companys Current report
of Form 8-K dated June 29, 2007).3.1
    (h)
    
    Articles Supplementary of Junior Participating Preferred Stock, Series B, dated as of
August 21, 2007 (incorporated by reference from Exhibit 3.1 of the Companys Current report
of Form 8-K dated August 28, 2007).3.1
    (i)
    
    Amendment to Bylaws, New Article II, Section 3  Quorum (incorporated by reference from
Exhibit 3.1 of the companys Current report on Form 8-K dated March 5, 2010).3.2
    (a)
    
    Bylaws of the Company (incorporated by reference from Exhibit 3.2 of the Companys Annual
Report on Form 10-KSB, filed for the year ended August 31, 2001).3.2
    (b)
    
    Bylaws of the Company, as amended and restated on March 14, 2007 (incorporated by
reference from Exhibit 3.2 of the Companys Current report on Form 8-K, filed on March 14,
2007).3.2
    (c)
    
    Second Amendment and Restated Bylaws of the Company (incorporated by reference from
Exhibit 3.2 of the Companys Current report on Form 8-K dated June 11, 2007).4.1
    (a)
    
    Form of Warrant Agreement concerning Common Stock Purchase Warrants (incorporated by
reference from Exhibit 4.3 of the Amendment No. 1 to the Companys Registration Statement
on Form SB-2 filed on November 27, 1996, SEC Registration No. 333-14011).4.1
    (b)
    
    Shareholder Rights Agreement, dated as of August 24, 2007 (incorporated herein by
reference to the Companys Current report on Form 8-A filed on August 24, 2007).4.1
    (c)
    
    Articles Supplementary, filed with the Maryland Department of Assessments and Taxation on
June 29, 2007 (incorporated by reference from Exhibit 3.2 of the Companys Current report
on Form 8-K dated June 29, 2007).4.1
    (d)
    
    Articles Supplementary of Junior Participating Preferred Stock, Series B, dated as of
August 21, 2007 (incorporated by reference from Exhibit 3.1 of the Companys Current report
of Form 8-K dated August 28, 2007).10.1
    (a)
    
    Credit Agreement dated February 5, 2010 between Double Eagle Petroleum Co. and Bank of
Oklahoma, N.A. et.al; (incorporated by reference from Exhibit 10.1, of the Companys Current
report of Form 8-K dated February 9, 2010).10.1
    (b)
    
    Employment Agreement between the Company and Ashley Jenkins, dated January 1, 2010
(incorporated by reference from Exhibit 10.1 of the Companys Current Report of Form 8-K
dated January 7, 2010).31.1
    
    
    Certification of Chief Executive Officer
(Principal Executive Officer) pursuant to Rule 13a-14(a) and Rule 15a-14(a) of the Securities Exchange Act, as amended.31.2
    
    
    Certification of Chief Financial Officer
(Principal Accounting Officer) pursuant to Rule 13a-14(a) and Rule 15a-14(a) of the Securities Exchange Act, as amended.32
    
    
    Certification of Chief Executive Officer
(Principal Executive Officer) and Chief Financial
Officer (Principal Accounting Officer) pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  23




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##### Table of Contents



SIGNATURES
  DOUBLE EAGLE PETROLEUM CO. (Registrant)Date: April 29, 2010
    By:
    /s/   Richard D. DoleRichard D. DoleChief Executive Officer
(Principal Executive Officer) Date: April 29, 2010
    By:
    /s/   Kurtis S. HooleyKurtis S. HooleyChief Financial Officer
(Principal Accounting Officer)  24




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##### Table of Contents



Exhibit Number
    
    Description3.1
    (a)
    
    Articles of Incorporation filed with the Maryland Secretary
of State on January 23, 2001 (incorporated by reference
from Exhibit 3.1(a) of the Companys Annual Report on Form
10-KSB for the year ended August 31, 2001).3.1
    (b)
    
    Certificate of Correction filed with the Maryland Secretary
of State on February 15, 2001 concerning the Articles of
Incorporation (incorporated by reference from Exhibit
3.1(b) of the Companys Annual Report on Form 10-KSB for
the year ended August 31, 2001).3.1
    (c)
    
    Articles of Merger filed with the Maryland Secretary of
State on February 15, 2001 (incorporated by reference from
Exhibit 3.1(c) of the Companys Annual Report on Form
10-KSB for the year ended August 31, 2001).3.1
    (d)
    
    Certificate of Correction filed with the Maryland Secretary
of State (incorporated by reference from Exhibit 3 of the
Companys Quarterly Report on Form 10-QSB for the quarter
ended November 30, 2001).3.1
    (e)
    
    Certificate of Correction to the Articles of Incorporation,
filed with the Maryland Department of Assessments and
Taxation on June 1, 2007 (incorporated by reference from
Exhibit 3.3 of the Companys Current Report of Form 8-K
dated June 29, 2007).3.1
    (f)
    
    Articles of Amendment, filed with the Maryland Department
of Assessments and Taxation on June 26, 2007 (incorporated
by reference from Exhibit 3.1 of the companys Current
report on Form 8-K dated June 29, 2007).3.1
    (g)
    
    Articles Supplementary, filed with the Maryland Department
of Assessments and Taxation on June 29, 2007 (incorporated
by reference from Exhibit 3.2 of the Companys Current
report of Form 8-K dated June 29, 2007).3.1
    (h)
    
    Articles Supplementary of Junior Participating Preferred
Stock, Series B, dated as of August 21, 2007 (incorporated
by reference from Exhibit 3.1 of the Companys Current
report of Form 8-K dated August 28, 2007).3.1
    (i)
    
    Amendment to Bylaws, New Article II, Section 3  Quorum
(incorporated by reference from Exhibit 3.1 of the
companys Current report on Form 8-K dated March 5, 2010).3.2
    (a)
    
    Bylaws of the Company (incorporated by reference from
Exhibit 3.2 of the Companys Annual Report on Form 10-KSB,
filed for the year ended August 31, 2001).3.2
    (b)
    
    Bylaws of the Company, as amended and restated on March 14,
2007 (incorporated by reference from Exhibit 3.2 of the
Companys Current report on Form 8-K, filed on March 14,
2007).3.2
    (c)
    
    Second Amendment and Restated Bylaws of the Company
(incorporated by reference from Exhibit 3.2 of the
Companys Current report on Form 8-K dated June 11, 2007).4.1
    (a)
    
    Form of Warrant Agreement concerning Common Stock Purchase
Warrants (incorporated by reference from Exhibit 4.3 of the
Amendment No. 1 to the Companys Registration Statement on
Form SB-2 filed on November 27, 1996, SEC Registration No.
333-14011).
  25




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##### Table of Contents



Exhibit Number
    
    Description4.1
    (b)
    
    Shareholder Rights Agreement, dated as of August 24, 2007
(incorporated herein by reference to the Companys Current
report on Form 8-A filed on August 24, 2007).4.1
    (c)
    
    Articles Supplementary, filed with the Maryland Department
of Assessments and Taxation on June 29, 2007 (incorporated
by reference from Exhibit 3.2 of the Companys Current
report on Form 8-K dated June 29, 2007).4.1
    (d)
    
    Articles Supplementary of Junior Participating Preferred
Stock, Series B, dated as of August 21, 2007 (incorporated
by reference from Exhibit 3.1 of the Companys Current
report of Form 8-K dated August 28, 2007).10.1
    (a)
    
    Credit Agreement dated February 5, 2010 between Double
Eagle Petroleum Co. and Bank of Oklahoma, N.A. et.al;
(incorporated by reference from Exhibit 10.1, of the
Companys Current report of Form 8-K dated February 9,
2010).10.1
    (b)
    
    Employment Agreement between the Company and Ashley
Jenkins, dated January 1, 2010 (incorporated by reference
from Exhibit 10.1 of the Companys Current Report of Form
8-K dated January 7, 2010).31.1
    
    
    Certification of Chief Executive Officer (Principal
Executive Officer) pursuant to Rule 13a-14(a) and
Rule 15a-14(a) of the Securities Exchange Act, as
amended.31.2
    
    
    Certification of Chief Financial Officer (Principal
Accounting Officer) pursuant to Rule 13a-14(a) and
Rule 15a-14(a) of the Securities Exchange Act, as
amended.32
    
    
    Certification of Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal
Accounting Officer) pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
  26