##### 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, 2008
 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: 000-22433
 Brigham Exploration Company
  Delaware
    
    1311
    
    75-2692967(State of other jurisdiction
    
    (Primary Standard Industrial
    
    (I.R.S. Employerof incorporation or organization)
    
    Classification Code Number)
    
    Identification Number)
 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730
 (512) 427-3300
  þ o
  Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
    
    Small Reporting Company o(Do not check if a smaller reporting company)
  o þ
 Class
    
    OutstandingCommon Stock, par value $.01 per share as of May 1, 2008
    
    46,201,276




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##### 



Brigham Exploration Company
 First Quarter 2008 Form 10-Q Report
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSConsolidated Balance Sheets  March 31, 2008 and December 31, 2007
    
    
    1Consolidated Statements of Operations  Three months ended March 31, 2008 and 2007
    
    
    2Consolidated Statement of Stockholders Equity  Three months ended March 31, 2008
    
    
    3Consolidated Statements of Cash Flows  Three months ended March 31, 2008 and 2007
    
    
    4Notes to the Consolidated Financial Statements
    
    
    5ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    15ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    28ITEM 4. CONTROLS AND PROCEDURES
    
    
    30PART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    31ITEM 1.A. RISK FACTORS
    
    
    31ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    31ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    31ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
    
    
    31ITEM 5. OTHER INFORMATION
    
    
    31ITEM 6. EXHIBITS
    
    
    31SIGNATURES
    
    
    32Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 (Unaudited)
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    6,166
    
    
    $
    13,863Accounts receivable
    
    
    20,412
    
    
    
    14,609Derivative assets
    
    
    
    
    
    
    1,416Other current assets
    
    
    2,984
    
    
    
    2,617Total current assets
    
    
    29,562
    
    
    
    32,505Oil and natural gas properties, using the full cost method includingProved, net
    
    
    460,725
    
    
    
    448,663Unproved
    
    
    82,542
    
    
    
    61,544543,267
    
    
    
    510,207Other property and equipment, net
    
    
    1,072
    
    
    
    1,034Deferred loan fees
    
    
    3,502
    
    
    
    3,687Other noncurrent assets
    
    
    1,536
    
    
    
    995Total assets
    
    $
    578,939
    
    
    $
    548,428LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    19,992
    
    
    $
    12,301Royalties payable
    
    
    9,731
    
    
    
    5,978Accrued drilling costs
    
    
    15,450
    
    
    
    14,841Participant advances received
    
    
    129
    
    
    
    2,095Derivative liabilities
    
    
    5,740
    
    
    
    1,812Other current liabilities
    
    
    8,615
    
    
    
    4,691Total current liabilities
    
    
    59,657
    
    
    
    41,718Senior Notes
    
    
    158,551
    
    
    
    158,492Senior credit facility
    
    
    19,000
    
    
    
    10,000Series A Preferred Stock, mandatorily redeemable, $.01 par value,
$20 stated and redemption value, 2,250,000 shares authorized,
505,051 shares issued and outstanding at March 31, 2008 and
December 31, 2007
    
    
    10,101
    
    
    
    10,101Deferred income taxes
    
    
    42,609
    
    
    
    41,625Other taxes payable
    
    
    2,162
    
    
    
    2,162Other noncurrent liabilities
    
    
    5,644
    
    
    
    5,303Commitments and contingencies (Note 3)Stockholders equity:Common stock, $.01 par value, 90 million shares authorized,
45,387,639 and 45,304,139 shares issued and 45,264,473 and
45,197,303 shares outstanding at March 31, 2008 and December 31,
2007, respectively
    
    
    454
    
    
    
    453Additional paid-in capital
    
    
    208,422
    
    
    
    207,526Treasury stock, at cost; 123,166 and 106,836 shares at March 31,
2008 and December 31, 2007, respectively
    
    
    (975
    )
    
    
    (854
    )Accumulated other comprehensive income (loss)
    
    
    
    
    
    
    115Retained earnings
    
    
    73,314
    
    
    
    71,787Total stockholders equity
    
    
    281,215
    
    
    
    279,027Total liabilities and stockholders equity
    
    $
    578,939
    
    
    $
    548,428
   1




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Three Months EndedMarch 31,2008
    
    
    2007Revenues:Oil and natural gas sales
    
    $
    30,510
    
    
    $
    28,486Gain (loss) on derivatives, net
    
    
    (5,456
    )
    
    
    (3,492
    )Other revenue
    
    
    17
    
    
    
    2725,071
    
    
    
    25,021Costs and expenses:Lease operating
    
    
    2,986
    
    
    
    2,569Production taxes
    
    
    1,283
    
    
    
    71General and administrative
    
    
    2,593
    
    
    
    2,178Depletion of oil and natural gas properties
    
    
    12,443
    
    
    
    13,959Depreciation and amortization
    
    
    147
    
    
    
    163Accretion of discount on asset retirement obligations
    
    
    91
    
    
    
    11719,543
    
    
    
    19,057Operating income
    
    
    5,528
    
    
    
    5,964Other income (expense):Interest income
    
    
    75
    
    
    
    131Interest expense, net
    
    
    (3,419
    )
    
    
    (3,417
    )Other income (expense)
    
    
    307
    
    
    
    190(3,037
    )
    
    
    (3,096
    )Income before income taxes
    
    
    2,491
    
    
    
    2,868Income tax expense:Current
    
    
    
    
    
    
    Deferred
    
    
    (964
    )
    
    
    (995
    )(964
    )
    
    
    (995
    )Net income
    
    $
    1,527
    
    
    $
    1,873Net income per share available to common stockholders:Basic
    
    $
    0.03
    
    
    $
    0.04Diluted
    
    $
    0.03
    
    
    $
    0.04Weighted average shares outstanding:Basic
    
    
    45,261
    
    
    
    45,051Diluted
    
    
    45,770
    
    
    
    45,430
   2




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 (In thousands)
 (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid In
    
    
    Treasury
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amounts
    
    
    Capital
    
    
    Stock
    
    
    Income (Loss)
    
    
    Earnings
    
    
    EquityBalance, December 31, 2007
    
    
    45,304
    
    
    $
    453
    
    
    $
    207,526
    
    
    $
    (854
    )
    
    $
    115
    
    
    $
    71,787
    
    
    $
    279,027Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,527
    
    
    
    1,527Net (gains) losses
included in net
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    
    
    
    
    (177
    )Tax benefit (provision)
related to hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    62Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,412Exercises of employee
stock options
    
    
    34
    
    
    
    
    
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134Vesting of restricted stock
    
    
    50
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock based compensation
    
    
    
    
    
    
    
    
    
    
    763
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    763Repurchases of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (121
    )
    
    
    
    
    
    
    
    
    
    
    (121
    )Balance, March 31, 2008
    
    
    45,388
    
    
    $
    454
    
    
    $
    208,422
    
    
    $
    (975
    )
    
    $
    
    
    
    $
    73,314
    
    
    $
    281,215
   3




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Three Months EndedMarch 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    1,527
    
    
    $
    1,873Adjustments to reconcile net income to cash provided by operating
activities:Depletion of oil and natural gas properties
    
    
    12,443
    
    
    
    13,959Depreciation and amortization
    
    
    147
    
    
    
    163Stock based compensation
    
    
    414
    
    
    
    421Amortization of deferred loan fees and debt issuance costs
    
    
    255
    
    
    
    214Market value adjustment for derivative instruments
    
    
    5,394
    
    
    
    4,916Accretion of discount on asset retirement obligations
    
    
    91
    
    
    
    117Deferred income taxes
    
    
    964
    
    
    
    995Other noncash items
    
    
    (28
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (5,803
    )
    
    
    (215
    )Other current assets
    
    
    (285
    )
    
    
    426Accounts payable
    
    
    7,691
    
    
    
    (8,079
    )Royalties payable
    
    
    3,753
    
    
    
    176Participant advances received
    
    
    (1,966
    )
    
    
    (2,387
    )Other current liabilities
    
    
    3,924
    
    
    
    2,999Other noncurrent assets and liabilities
    
    
    (186
    )
    
    
    6Net cash provided by operating activities
    
    
    28,335
    
    
    
    15,584Cash flows from investing activities:Additions to oil and natural gas properties
    
    
    (44,484
    )
    
    
    (47,605
    )Additions to other property and equipment
    
    
    (157
    )
    
    
    (411
    )Decrease (increase) in drilling advances paid
    
    
    (393
    )
    
    
    (206
    )Net cash used by investing activities
    
    
    (45,034
    )
    
    
    (48,222
    )Cash flows from financing activities:Increase in senior credit facility
    
    
    9,000
    
    
    
    35,600Repayment of senior credit facility
    
    
    
    
    
    
    Repayment of senior subordinated notes
    
    
    
    
    
    
    Deferred loan fees paid and equity costs
    
    
    (11
    )
    
    
    Proceeds from issuance of stock, net of issuance costs
    
    
    
    
    
    
    Proceeds from exercise of employee stock options
    
    
    134
    
    
    
    23Repurchases of common stock
    
    
    (121
    )
    
    
    (134
    )Net cash provided by financing activities
    
    
    9,002
    
    
    
    35,489Net increase (decrease) in cash and cash equivalents
    
    
    (7,697
    )
    
    
    2,851Cash and cash equivalents, beginning of year
    
    
    13,863
    
    
    
    4,300Cash and cash equivalents, end of period
    
    $
    6,166
    
    
    $
    7,151
   4




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and Nature of Operations
  2. Basis of Presentation
    3. Commitments and Contingencies
   4. Net Income Available Per Common Share
   5




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  Three Months EndedMarch 31,2008
    
    
    2007Weighted average common shares outstanding  basic
    
    
    45,261
    
    
    
    45,051Plus: Potential common sharesStock options and restricted stock
    
    
    509
    
    
    
    379Weighted average common shares outstanding  diluted
    
    
    45,770
    
    
    
    45,430Stock options excluded from diluted EPS due to the anti-dilutive effect
    
    
    2,347
    
    
    
    2,550
 5. Income Taxes
  March 31,
    
    
    March 31,2008
    
    
    2007Current income taxes:Federal
    
    $
    
    
    
    $
    State
    
    
    
    
    
    
    Deferred income taxes:Federal
    
    
    872
    
    
    
    1,179State
    
    
    92
    
    
    
    (184
    )$
    964
    
    
    $
    995
   (In thousands)Increases (decreases) resulting from adoption of FIN 48
    
    $
    2,162Increases (decreases) resulting from tax positions taken in the current period
    
    
    Decreases relating to settlements with taxing authorities
    
    
    Reductions resulting from the lapse of applicable statutes of limitations
    
    
    Unrecognized tax benefits at March 31, 2008
    
    $
    2,162
   6




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  6. Derivative Instruments and Hedging Activities
  Natural Gas and Crude Oil Derivative Contracts   Cash flow hedges
    Three Months EndedMarch 31,2008
    
    
    2007Natural GasAverage price per Mcf realized excluding gas hedging results
    
    $
    8.83
    
    
    $
    7.32Average price per Mcf including gas hedging settlement results
    
    $
    9.07
    
    
    $
    7.76Increase (decrease) in revenue, in thousands
    
    $
    524
    
    
    $
    1,311Average price per Mcf including gas hedging settlement
results and any unrealized gains (losses)
    
    $
    6.71
    
    
    $
    6.23Increase (decrease) in revenue, in thousands
    
    $
    (4,632
    )
    
    $
    (3,251
    )OilAverage price per Bbl realized excluding oil hedging results
    
    $
    95.50
    
    
    $
    54.75Average price per Bbl including oil hedging settlement results
    
    $
    90.48
    
    
    $
    55.68Increase (decrease) in revenue, in thousands
    
    $
    (586
    )
    
    $
    113Average price per Bbl including oil hedging settlement
results and any unrealized gains (losses)
    
    $
    88.45
    
    
    $
    52.78Increase (decrease) in revenue, in thousands
    
    $
    (824
    )
    
    $
    (240
    )
  7




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  Natural
    
    
    
    
    
    
    Purchased
    
    
    WrittenGas
    
    
    Oil
    
    
    Put
    
    
    CallSettlement Period
    
    (MMBTU)
    
    
    (Barrels)
    
    
    Nymex
    
    
    NymexNatural Gas Costless Collars04/01/08 - 07/31/08
    
    
    120,000
    
    
    
    
    
    
    $
    7.00
    
    
    $
    9.2504/01/08  06/30/08
    
    
    120,000
    
    
    
    
    
    
    $
    7.00
    
    
    $
    9.0004/01/08 - 09/30/08
    
    
    420,000
    
    
    
    
    
    
    $
    6.75
    
    
    $
    9.7504/01/08 - 09/30/08
    
    
    260,000
    
    
    
    
    
    
    $
    7.00
    
    
    $
    8.3504/01/08 - 09/30/08
    
    
    540,000
    
    
    
    
    
    
    $
    7.00
    
    
    $
    9.6804/01/08 - 10/31/08
    
    
    350,000
    
    
    
    
    
    
    $
    7.25
    
    
    $
    10.4004/01/08 - 05/31/08
    
    
    60,000
    
    
    
    
    
    
    $
    7.00
    
    
    $
    8.7004/01/08 - 04/30/08
    
    
    60,000
    
    
    
    
    
    
    $
    7.25
    
    
    $
    9.0004/01/08 - 07/31/08
    
    
    200,000
    
    
    
    
    
    
    $
    7.50
    
    
    $
    10.2005/01/08 - 07/31/08
    
    
    90,000
    
    
    
    
    
    
    $
    8.50
    
    
    $
    10.4006/01/08 - 09/30/08
    
    
    80,000
    
    
    
    
    
    
    $
    7.25
    
    
    $
    9.5307/01/08 - 09/30/08
    
    
    90,000
    
    
    
    
    
    
    $
    6.75
    
    
    $
    9.6208/01/08 - 12/31/08
    
    
    400,000
    
    
    
    
    
    
    $
    9.75
    
    
    $
    11.5004/01/09 - 09/30/09
    
    
    120,000
    
    
    
    
    
    
    $
    7.25
    
    
    $
    9.8010/01/08 - 03/31/09
    
    
    180,000
    
    
    
    
    
    
    $
    8.00
    
    
    $
    10.2010/01/08 - 03/31/09
    
    
    300,000
    
    
    
    
    
    
    $
    8.00
    
    
    $
    11.2010/01/08 - 03/31/09
    
    
    300,000
    
    
    
    
    
    
    $
    7.75
    
    
    $
    9.8201/01/09 - 03/31/09
    
    
    220,000
    
    
    
    
    
    
    $
    10.25
    
    
    $
    12.2504/01/09 - 09/30/09
    
    
    420,000
    
    
    
    
    
    
    $
    8.00
    
    
    $
    10.7004/01/09 - 09/30/09
    
    
    300,000
    
    
    
    
    
    
    $
    7.00
    
    
    $
    9.73Oil Costless Collars04/01/08 - 04/30/08
    
    
    
    
    
    
    2,000
    
    
    $
    60.00
    
    
    $
    74.7504/01/08 - 06/30/08
    
    
    
    
    
    
    3,000
    
    
    $
    65.00
    
    
    $
    82.6004/01/08 - 06/30/08
    
    
    
    
    
    
    9,000
    
    
    $
    62.00
    
    
    $
    81.6004/01/08 - 10/31/08
    
    
    
    
    
    
    21,000
    
    
    $
    65.70
    
    
    $
    90.0004/01/08 - 12/31/08
    
    
    
    
    
    
    18,000
    
    
    $
    57.50
    
    
    $
    75.5004/01/08 - 12/31/08
    
    
    
    
    
    
    18,000
    
    
    $
    85.00
    
    
    $
    117.0004/01/08 - 12/31/08
    
    
    
    
    
    
    18,000
    
    
    $
    57.50
    
    
    $
    76.0006/01/08 - 10/31/08
    
    
    
    
    
    
    30,000
    
    
    $
    90.00
    
    
    $
    120.0007/01/08 - 08/31/08
    
    
    
    
    
    
    4,000
    
    
    $
    65.00
    
    
    $
    80.6011/01/08 - 12/31/08
    
    
    
    
    
    
    8,000
    
    
    $
    87.75
    
    
    $
    120.0011/01/08 - 06/30/09
    
    
    
    
    
    
    24,000
    
    
    $
    62.00
    
    
    $
    81.7501/01/09 - 03/31/09
    
    
    
    
    
    
    21,000
    
    
    $
    86.50
    
    
    $
    120.00
 Natural
    
    
    Purchased
    
    
    Written
    
    
    WrittenGas
    
    
    Put
    
    
    Call
    
    
    PutSettlement Period
    
    (MMBTU)
    
    
    Nymex
    
    
    Nymex
    
    
    NymexNatural Gas Three Way Costless Collars10/01/08 - 03/31/09
    
    
    300,000
    
    
    $
    8.00
    
    
    $
    10.35
    
    
    $
    5.50
  8




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 7. Fair Values
  Fair Value Measurements at March 31, 2008 UsingQuoted Prices in
    
    
    Significant Other
    
    
    SignificantActive Markets
    
    
    Observable
    
    
    UnobservableDecember 31,
    
    
    for Identical Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2007
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Current derivative liabilities
    
    $
    (1,812
    )
    
    $
    
    
    
    $
    (5,740
    )
    
    $
    Other non-current liabilities
    
    
    (256
    )
    
    
    
    
    
    
    (463
    )
    
    
    Current derivative assets
    
    
    1,416
    
    
    
    
    
    
    
    
    
    
    
    Other non-current assets
    
    
    25
    
    
    
    
    
    
    
    6
    
    
    
    $
    (627
    )
    
    $
    
    
    
    $
    (6,197
    )
    
    $
    
 8. Senior Notes
    9. Asset Retirement Obligations
   9




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  Three Months EndedMarch 31,2008
    
    
    2007Beginning asset retirement obligations
    
    $
    5,047
    
    
    $
    5,002Liabilities incurred for new wells placed on production
    
    
    61
    
    
    
    208Liabilities settled
    
    
    (19
    )
    
    
    10Accretion of discount on asset retirement obligations
    
    
    91
    
    
    
    117$
    5,180
    
    
    $
    5,337
 10. Stock Based Compensation
   2008Risk-free interest rate
    
    
    2.7
    %Expected life (in years)
    
    
    5.0Expected volatility
    
    
    44
    %Expected dividend yield
    
    
    Weighted average fair value per share of stock compensation
    
    $
    3.26
     10




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  Three Months EndedMarch 31,2008
    
    
    2007Pre-tax stock based compensation expense
    
    $
    763
    
    
    $
    770Capitalized stock based compensation
    
    
    (349
    )
    
    
    (349
    )Tax benefit
    
    
    (145
    )
    
    
    (147
    )Stock based compensation expense, net
    
    $
    269
    
    
    $
    274
 Stock Based Plan Descriptions and Share Information
    2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOptions outstanding at the beginning of the
year
    
    
    3,046,166
    
    
    $
    7.14
    
    
    
    3,243,566
    
    
    $
    7.08Granted
    
    
    5,000
    
    
    $
    7.73
    
    
    
    
    
    
    $
    Forfeited or cancelled
    
    
    (37,800
    )
    
    $
    7.91
    
    
    
    (86,600
    )
    
    $
    8.14Exercised
    
    
    (33,500
    )
    
    $
    4.00
    
    
    
    (5,000
    )
    
    $
    4.59Options outstanding at the end of the quarter
    
    
    2,979,866
    
    
    $
    7.17
    
    
    
    3,151,966
    
    
    $
    7.05Options exercisable at the end of the quarter
    
    
    1,837,566
    
    
    $
    6.67
    
    
    
    1,468,266
    
    
    $
    6.20
   11




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  Options Outstanding
    
    
    Options ExercisableNumber
    
    
    Weighted-
    
    
    
    
    
    
    Number
    
    
    Weighted-Outstanding at
    
    
    Average
    
    
    Weighted-
    
    
    Exercisable at
    
    
    Average
    
    
    Weighted-March 31,
    
    
    Remaining
    
    
    Average
    
    
    March 31,
    
    
    Remaining
    
    
    AverageExercise Price
    
    2008
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    2008
    
    
    Contractual Life
    
    
    Exercise Price$3.05 to $3.41
    
    
    202,866
    
    
    0.6 years
    
    $
    3.35
    
    
    
    202,866
    
    
    0.6 years
    
    $
    3.353.66 to 5.08
    
    
    359,900
    
    
    1.4 years
    
    $
    4.31
    
    
    
    356,400
    
    
    1.4 years
    
    $
    4.306.10 to 6.73
    
    
    1,239,200
    
    
    3.6 years
    
    $
    6.50
    
    
    
    709,000
    
    
    2.9 years
    
    $
    6.627.22 to 8.84
    
    
    823,900
    
    
    4.0 years
    
    $
    8.47
    
    
    
    415,300
    
    
    3.5 years
    
    $
    8.668.93 to 12.31
    
    
    354,000
    
    
    4.5 years
    
    $
    11.60
    
    
    
    154,000
    
    
    4.4 years
    
    $
    11.40$3.05 to $12.31
    
    
    2,979,866
    
    
    3.4 years
    
    $
    7.17
    
    
    
    1,837,566
    
    
    2.6 years
    
    $
    6.67
   Restricted Stock
   2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceRestricted shares outstanding at the
beginning of the year
    
    
    653,623
    
    
    $
    7.16
    
    
    
    391,367
    
    
    $
    8.60Shares granted
    
    
    90,000
    
    
    $
    7.41
    
    
    
    75,000
    
    
    $
    7.43Lapse of restrictions
    
    
    (50,000
    )
    
    $
    5.23
    
    
    
    (55,000
    )
    
    $
    5.23Forfeitures
    
    
    (15,204
    )
    
    $
    6.34
    
    
    
    (25,160
    )
    
    $
    8.09Shares outstanding at the end of the quarter
    
    
    678,419
    
    
    $
    7.35
    
    
    
    386,207
    
    
    $
    8.89
  12




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 11. Comprehensive Income
  Three Months EndedMarch 31,2008
    
    
    2007Net income
    
    $
    1,527
    
    
    $
    1,873Unrealized gains (losses) on cash flow hedges
    
    
    
    
    
    
    Net gains (losses) included in net income
    
    
    (177
    )
    
    
    (1,094
    )Tax benefits (provisions) related to cash flow hedges
    
    
    62
    
    
    
    383Reclassification adjustments for settled hedging positions
    
    
    
    
    
    
    Other comprehensive income, net
    
    $
    1,412
    
    
    $
    1,162
 12. New Accounting Pronouncements
      13




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##### Table of Contents



BRIGHAM EXPLORATION COMPANY
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    14




---



##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  General Overview
    
    
    Internally Generate Inventory of High Quality Exploratory Prospects;
 
    
    Leverage Our Operational Expertise;
 
    
    Evaluate and Selectively Pursue New Potential Plays;
 
    
    Capitalize on Exploration Successes Through Development of Our Field Discoveries;
 
    
    Continue to Actively Drill Our Multi-Year Prospect Inventory; and
 
    
    Enhance Returns Through Operational Control.
 Overview of First Quarter 2008 Financial Results
     15




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##### Table of Contents



Overview of First Quarter 2008 Operational Results
 Rocky Mountain Province
 Williston Basin
        Powder River Basin
   16




---



##### Table of Contents



Onshore Gulf Coast Province
 Vicksburg Trend
   Southern Louisiana Trend
  First Quarter 2008 Results
 Comparison of the three-month periods ended March 31, 2008 and 2007.
 Production volumes
 Three Months Ended March 31,2008
    
    
    % Change
    
    
    2007Oil (MBbls)
    
    
    117
    
    
    
    (4
    %)
    
    
    122Natural gas (MMcf)
    
    
    2,193
    
    
    
    (26
    %)
    
    
    2,982Total (MMcfe)(1)
    
    
    2,894
    
    
    
    (22
    %)
    
    
    3,712Average daily production (MMcfe/d) (2)
    
    
    32.2
    
    
    
    
    
    
    
    41.2
 
 (1)
    
    MMcfe is defined as one million cubic feet equivalent of natural gas, determined using
the ratio of six MMcf of natural gas to one MBbl of crude oil, condensate or natural gas
liquids.(2)
    
    Average daily production is calculated using 30 days per calendar month.   17




---



##### Table of Contents



Revenues, Commodity Prices and Hedging
  Three Months Ended March 31,2008
    
    
    % Change
    
    
    2007(In thousands)Oil revenue:Oil revenue
    
    $
    11,157
    
    
    
    67
    %
    
    $
    6,663Oil derivative settlement gains (losses)
    
    
    (586
    )
    
    NM
    
    
    
    113Oil revenue including derivative settlements
    
    $
    10,571
    
    
    
    56
    %
    
    $
    6,776Oil derivative unrealized gains (losses)
    
    
    (238
    )
    
    
    (33
    %)
    
    
    (353
    )Oil revenue including derivative settlements and unrealized gains (losses)
    
    $
    10,333
    
    
    
    61
    %
    
    $
    6,423Natural gas revenue:Natural gas revenue
    
    $
    19,353
    
    
    
    (11
    %)
    
    $
    21,823Natural gas derivative settlement gains (losses)
    
    
    524
    
    
    
    (60
    %)
    
    
    1,311Natural gas revenue including derivative settlements
    
    $
    19,877
    
    
    
    (14
    %)
    
    $
    23,134Natural gas derivative unrealized gains (losses)
    
    
    (5,156
    )
    
    
    13
    %
    
    
    (4,563
    )Natural gas revenue including derivative settlements and unrealized gains
(losses)
    
    $
    14,721
    
    
    
    (21
    %)
    
    $
    18,571Oil and natural gas revenue:Oil and natural gas revenue
    
    $
    30,510
    
    
    
    7
    %
    
    $
    28,486Oil and natural gas derivative settlement gains (losses)
    
    
    (62
    )
    
    NM
    
    
    
    1,424Oil and natural gas revenue including derivative settlements
    
    
    30,448
    
    
    
    2
    %
    
    
    29,910Oil and natural gas derivative unrealized gains (losses)
    
    
    (5,394
    )
    
    
    10
    %
    
    
    (4,916
    )Oil and natural gas revenue including derivative settlements and
unrealized gains (losses)
    
    
    25,054
    
    
    
    0
    %
    
    
    24,994Other revenue
    
    
    17
    
    
    
    (37
    %)
    
    
    27Total revenue
    
    $
    25,071
    
    
    
    0
    %
    
    $
    25,021Average oil prices:Oil price (per Bbl)
    
    $
    95.50
    
    
    
    74
    %
    
    $
    54.75Oil price including derivative settlement gains (losses) (per Bbl)
    
    
    90.48
    
    
    
    63
    %
    
    
    55.68Oil price including derivative settlements and unrealized gains (losses)
(per Bbl)
    
    
    88.45
    
    
    
    68
    %
    
    
    52.78Average natural gas prices:Natural gas price (per Mcf)
    
    $
    8.83
    
    
    
    21
    %
    
    $
    7.32Natural gas price including derivative settlement gains (losses) (per Mcf)
    
    
    9.07
    
    
    
    17
    %
    
    
    7.76Natural gas price including derivative settlements and unrealized gains
(losses) (per Mcf)
    
    $
    6.71
    
    
    
    8
    %
    
    $
    6.23Average equivalent prices:Natural gas equivalent price (per Mcfe)
    
    $
    10.54
    
    
    
    37
    %
    
    $
    7.67Natural gas equivalent price including derivative settlement gains (losses)
(per Mcfe)
    
    
    10.52
    
    
    
    31
    %
    
    
    8.05Natural gas equivalent price including derivative settlements and unrealized
gains (losses) (per Mcfe)
    
    $
    8.66
    
    
    
    29
    %
    
    $
    6.73
  18




---



##### Table of Contents



For the threemonth periodsended March 31,2008 and 2007(In thousands)Change in revenue from the sale of oil:Price variance impact
    
    $
    4,761Volume variance impact
    
    
    (267
    )Cash settlement of derivative hedging contracts
    
    
    (699
    )Unrealized gains (losses) due to derivative hedging contracts
    
    
    115Total change
    
    $
    3,910Change in revenue from the sale of natural gas:Price variance impact
    
    $
    3,303Volume variance impact
    
    
    (5,773
    )Cash settlement of derivative hedging contracts
    
    
    (787
    )Unrealized gains (losses) due to derivative hedging contracts
    
    
    (593
    )Total change
    
    $
    (3,850
    )Change in revenue from the sale of oil and natural gas:Price variance impact
    
    $
    8,064Volume variance impact
    
    
    (6,040
    )Cash settlement of derivative hedging contracts
    
    
    (1,486
    )Unrealized gains (losses) due to derivative hedging contracts
    
    
    (478
    )Total change
    
    $
    60
  
    
    a 37% increase in the sales price we received for our oil and natural gas resulted in a
$8.1 million increase in revenues;
 
    
    a 22% decrease in production volumes for the quarter resulted in a $6.0 million decrease in
oil and natural gas revenues;
 
    
    a $0.1 million loss from the settlement of derivative contracts in the first quarter 2008
versus a $1.4 million gain from the settlement of derivative contracts in first quarter 2007
decreased revenues by $1.5 million; and
 
    
    a $5.4 million unrealized derivative loss in first quarter 2008 versus a $4.9 million
unrealized derivative loss in first quarter 2007 decreased revenues by $0.5 million.
 Hedging.
  Three months ended March 31,2008
    
    
    % Change
    
    
    2007Oil collarsVolumes (Bbls)
    
    
    45,500
    
    
    
    (40
    %)
    
    
    76,000Average floor price ($  per Bbl)
    
    $
    61.68
    
    
    
    11
    %
    
    $
    55.76Average ceiling price ($  per Bbl)
    
    $
    85.59
    
    
    
    8
    %
    
    $
    79.05Gain (loss) upon settlement ($ in thousands)
    
    $
    (586
    )
    
    NM
    
    
    $
    113Natural gas collarsVolumes (MMbtu)
    
    
    1,520,000
    
    
    
    (16
    %)
    
    
    1,805,000Average floor price ($  per MMbtu)
    
    $
    7.87
    
    
    
    4
    %
    
    $
    7.58Average ceiling price ($  per MMbtu)
    
    $
    12.44
    
    
    
    (23
    %)
    
    $
    16.15Gain (loss) upon settlement ($ in thousands)
    
    $
    524
    
    
    
    (60
    %)
    
    $
    1,311
 Other revenue
  19




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##### Table of Contents



Operating costs and expenses
 Production costs.
 Unit-of-Production
    
    
    Amount(Per Mcfe)
    
    
    (In thousands)Three months ended March 31,
    
    
    Three months ended March 31,2008
    
    
    % Change
    
    
    2007
    
    
    2008
    
    
    % Change
    
    
    2007Production costs:Operating & maintenance
    
    $
    0.63
    
    
    
    2
    %
    
    $
    0.62
    
    
    $
    1,822
    
    
    
    (21
    %)
    
    $
    2,304Expensed workovers
    
    
    0.28
    
    
    NM
    
    
    
    (0.04
    )
    
    
    814
    
    
    NM
    
    
    
    (142
    )Ad valorem taxes
    
    
    0.12
    
    
    
    9
    %
    
    
    0.11
    
    
    
    350
    
    
    
    (14
    %)
    
    
    407Lease operating expenses
    
    $
    1.03
    
    
    
    49
    %
    
    $
    0.69
    
    
    $
    2,986
    
    
    
    16
    %
    
    $
    2,569Production taxes
    
    
    0.44
    
    
    
    2100
    %
    
    
    0.02
    
    
    
    1,283
    
    
    
    1707
    %
    
    
    71Production costs
    
    $
    1.47
    
    
    
    107
    %
    
    $
    0.71
    
    
    $
    4,269
    
    
    
    62
    %
    
    $
    2,640
  
    
    production taxes increased $0.42 per Mcfe, due to a $1.3 million decline in production tax
abatement approvals on our Vicksburg and Mills Ranch wells from the first quarter 2007;
 
    
    expensed workovers increased $0.32 per Mcfe due to the unanticipated workover of two of our wells;
 
    
    ad valorem taxes increased $0.01 per Mcfe, or 9%, due to a decrease in production volumes;
and
 
    
    O&M expense increased $0.01 per Mcfe, or 2%.
 General and administrative expenses.
 Three months ended March 31,2008
    
    
    % Change
    
    
    2007(In thousands, except per unit measurements)General and administrative costs
    
    $
    4,956
    
    
    
    17
    %
    
    $
    4,229Capitalized general and administrative costs
    
    
    (2,363
    )
    
    
    15
    %
    
    
    (2,051
    )General and administrative expenses
    
    $
    2,593
    
    
    
    19
    %
    
    $
    2,178General and administrative expense ($  per Mcfe)
    
    $
    0.90
    
    
    
    53
    %
    
    $
    0.59
   20




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##### Table of Contents



Depletion of oil and natural gas properties
 Three months ended March 31,2008
    
    
    % Change
    
    
    2007(In thousands, except per unit measurements)Depletion of oil and natural gas properties
    
    $
    12,443
    
    
    
    (11
    %)
    
    $
    13,959Depletion of oil and natural gas
properties ($  per Mcfe)
    
    $
    4.30
    
    
    
    14
    %
    
    $
    3.76
  Net interest expense.
 Three months ended March 31,2008
    
    
    % Change
    
    
    2007(In thousands)Interest on Senior Notes
    
    $
    3,850
    
    
    
    28
    %
    
    $
    3,008Interest on senior credit facility
    
    
    153
    
    
    
    (80
    %)
    
    
    763Commitment fees
    
    
    65
    
    
    
    35
    %
    
    
    48Dividend on mandatorily redeemable preferred stock
    
    
    151
    
    
    
    1
    %
    
    
    149Amortization of deferred loan and debt issuance cost
    
    
    246
    
    
    
    20
    %
    
    
    205Other general interest expense
    
    
    0
    
    
    
    (100
    %)
    
    
    1Capitalized interest expense
    
    
    (1,046
    )
    
    
    38
    %
    
    
    (757
    )Net interest expense
    
    $
    3,419
    
    
    
    0
    %
    
    $
    3,417Weighted average debt outstanding
    
    $
    182,821
    
    
    
    6
    %
    
    $
    171,733Average interest rate on outstanding indebtedness (a)
    
    
    9.4
    %
    
    
    
    
    
    
    9.4
    %
 
 a)
    
    Calculated as the sum of the interest expense on our outstanding indebtedness,
commitment fees that we pay on our unused borrowing capacity and the dividend on our
mandatorily redeemable preferred stock divided by our weighted average debt and
preferred stock outstanding for the period.  Other income (expense).
  Three months ended March 31,2008
    
    
    % Change
    
    
    2007(In thousands)Other income (expense):Non-cash gain (loss)
    
    $
    1
    
    
    
    (98
    %)
    
    $
    40Income (expense)
    
    
    306
    
    
    
    104
    %
    
    
    150Total other income (expense)
    
    $
    307
    
    
    
    62
    %
    
    $
    190
   21




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##### Table of Contents



Income taxes.
 Capital Expenditures
  
    
    cost of acquiring and maintaining our lease acreage position and our seismic resources;
    
    cost of drilling and completing new oil and natural gas wells;
    
    cost of installing new production infrastructure;
    
    cost of maintaining, repairing and enhancing existing oil and natural gas wells;
    
    cost related to plugging and abandoning unproductive or uneconomic wells; and
    
    indirect costs related to our exploration activities, including payroll and other
expenses attributable to our exploration professional staff.
  Amount2008
    
    
    Spent Through
    
    
    AmountBudget
    
    
    March 31, 2008
    
    
    Remaining (a)(In millions)Drilling
    
    $
    102.6
    
    
    $
    31.2
    
    
    $
    71.4Net land and seismic
    
    
    18.3
    
    
    
    10.8
    
    
    
    7.5Capitalized costs (b)
    
    
    12.8
    
    
    
    3.4
    
    
    
    9.4Asset retirement obligation
    
    
    0.7
    
    
    
    0.1
    
    
    
    0.6Total oil and gas capital expenditures (c)
    
    $
    134.4
    
    
    $
    45.5
    
    
    $
    88.9
 
 (a)
    
    Calculated based on the 2008 capital expenditure budget announced on February 6,
2008 less amount spent through March 31, 2008.(b)
    
    Capitalized costs include capitalized interest expense, general and
administrative expense and stock compensation expense.(c)
    
    Excludes other property capital expenditures. Determination of Capital Expenditure Budget
   22




---



##### Table of Contents




    
    changes in commodity prices;
    
    variances in forecasted production and the resulting production of our newly drilled
wells;
    
    variances in our production levels from our existing oil and gas properties;
    
    variances in a prospects risked reserve size;
    
    variances in drilling and completion costs, service costs and the availability of
drilling equipment;
    
    variances in the availability and timing of drilling and completion services;
    
    economic and industry conditions at the time of drilling; and
    
    the availability of more economically attractive prospects.
  Liquidity and Capital Resources
 Sources of Capital
  9 5/8% Senior Notes Due 2014
   
    
    rank equally in right of payment with all our existing and future senior indebtedness;
    
    rank senior to all of our future subordinated indebtedness; and
    
    are effectively junior in right of payment to all of our and the Guarantors existing
and future secured indebtedness, including debt of our senior credit agreement.
   Senior Credit Agreement
   23




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##### Table of Contents



Percent of
    
    
    
    EurodollarBorrowing Base
    
    
    
    Rate
    
    
    Base RateUtilized
    
    
    
    Advances
    
    
    Advances(1)<50%
    
    
    
    
    1.250%
    
    
    
    0.000%50% and < 75%
    
    
    
    
    1.500%
    
    
    
    0.000%75% and < 90%
    
    
    
    
    1.750%
    
    
    
    0.250%90%
    
    
    
    
    2.000%
    
    
    
    0.500%
 
 (1)
    
    Base rate is defined as for any day a fluctuating rate per annum equal to the higher of: (a)
the Federal Funds Rate plus 1/2 of 1% or (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America as its prime rate. The prime rate
is a rate set by Bank of America based upon various factors including Bank of Americas costs
and desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such announced rate. Any
change in such rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.  Percent ofBorrowing Base
    
    
    
    QuarterlyUtilized
    
    
    
    Commitment Fee<50%
    
    
    
    
    0.250%50% and < 75%
    
    
    
    
    0.250%75% and < 90%
    
    
    
    
    0.375%90%
    
    
    
    
    0.375%
   24




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##### Table of Contents



Mandatorily Redeemable Preferred Stock
  Access to Capital Markets
    Off Balance Sheet Arrangements
  Analysis of Changes In Cash and Cash Equivalents
  Three months ended March 31,2008
    
    
    %Change
    
    
    2007(In thousands)Net income
    
    $
    1,527
    
    
    
    (18
    %)
    
    $
    1,873Non-cash items
    
    
    19,680
    
    
    
    (5
    %)
    
    
    20,785Changes in working capital and other items
    
    
    7,128
    
    
    NM
    
    
    
    (7,074
    )Cash flows provided by operating activities
    
    $
    28,335
    
    
    
    82
    %
    
    $
    15,584Cash flows used by investing activities
    
    
    (45,034
    )
    
    
    (7
    %)
    
    
    (48,222
    )Cash flows provided by financing activities
    
    
    9,002
    
    
    
    (75
    %)
    
    
    35,489Net increase in cash and cash equivalents
    
    $
    (7,697
    )
    
    NM
    
    
    $
    2,851
 Analysis of net cash provided by operating activities
    25




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##### Table of Contents



Analysis of changes in cash flows used in investing activities
 Three months ended March 31,2008
    
    
    %Change
    
    
    2007(In thousands)Capital expenditures for oil and natural gas activities:Drilling
    
    $
    31,200
    
    
    
    9
    %
    
    $
    28,677Land and seismic
    
    
    10,833
    
    
    
    269
    %
    
    
    2,936Capitalized cost
    
    
    3,410
    
    
    
    21
    %
    
    
    2,808Capitalized asset retirement obligation
    
    
    61
    
    
    
    (71
    %)
    
    
    207Total
    
    $
    45,504
    
    
    
    31
    %
    
    $
    34,628Reconciling Items:Change in accrued drilling costs
    
    $
    (609
    )
    
    NM
    
    
    $
    13,533Other
    
    
    139
    
    
    
    128
    %
    
    
    61Total Reconciling Items
    
    
    (470
    )
    
    NM
    
    
    
    13,594Net cash used in investing activities
    
    $
    45,034
    
    
    
    (7
    %)
    
    $
    48,222
  
    
    the change in accrued drilling costs reduced cash used in investing activities by
$14.1 million;
    
    drilling expenditures increased by $2.5 million;
    
    land and seismic expenditures increased by $7.9 million; and
    
    capitalized costs increased by $0.6 million.
 Analysis of changes in cash flows from financing activities
  Common Stock Transactions
  Shares Issued
    
    
    Net Proceeds(In thousands, except share data)2008 common stock transactions:Exercise of employee stock options
    
    
    33,500
    
    
    $
    1342007 common stock transactions:Exercise of employee stock options
    
    
    5,000
    
    
    $
    23
 Other Matters
 Derivative Instruments
   26




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##### Table of Contents



Effects of Inflation and Changes in Prices
  Environmental and Other Regulatory Matters
  New Accounting Pronouncements
      27




---



##### Table of Contents



Forward Looking Information
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Management Opinion Concerning Derivative Instruments
  Derivative Instruments and Hedging Activities
    28




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##### Table of Contents



Natural
    
    
    Purchased
    
    
    WrittenGas
    
    
    Put
    
    
    CallSettlement Period
    
    (MMbtu)
    
    
    (Nymex)
    
    
    (Nymex)Natural Gas Costless Collars04/01/08 - 04/30/08
    
    
    60,000
    
    
    $
    7.25
    
    
    $
    9.0004/01/08 - 05/31/08
    
    
    140,000
    
    
    $
    7.00
    
    
    $
    8.3504/01/08 - 05/31/08
    
    
    60,000
    
    
    $
    7.00
    
    
    $
    8.7004/01/08 - 06/30/08
    
    
    120,000
    
    
    $
    7.00
    
    
    $
    9.0004/01/08 - 07/31/08
    
    
    120,000
    
    
    $
    7.00
    
    
    $
    9.2504/01/08 - 07/31/08
    
    
    200,000
    
    
    $
    7.50
    
    
    $
    10.2004/01/08 - 09/30/08
    
    
    420,000
    
    
    $
    6.75
    
    
    $
    9.7504/01/08 - 09/30/08
    
    
    540,000
    
    
    $
    7.00
    
    
    $
    9.6804/01/08 - 10/31/08
    
    
    350,000
    
    
    $
    7.25
    
    
    $
    10.4005/01/08 - 05/31/08
    
    
    30,000
    
    
    $
    8.50
    
    
    $
    10.4006/01/08 - 06/30/08
    
    
    40,000
    
    
    $
    8.50
    
    
    $
    10.4006/01/08 - 09/30/08
    
    
    80,000
    
    
    $
    7.25
    
    
    $
    9.5306/01/08 - 09/30/08
    
    
    120,000
    
    
    $
    7.00
    
    
    $
    8.3507/01/08 - 07/31/08
    
    
    20,000
    
    
    $
    8.50
    
    
    $
    10.4007/01/08 - 09/30/08
    
    
    90,000
    
    
    $
    6.75
    
    
    $
    9.6208/01/08 - 12/31/08
    
    
    400,000
    
    
    $
    9.75
    
    
    $
    11.5010/01/08 - 03/31/09
    
    
    300,000
    
    
    $
    7.75
    
    
    $
    9.8210/01/08 - 03/31/09
    
    
    180,000
    
    
    $
    8.00
    
    
    $
    10.2010/01/08 - 03/31/09
    
    
    300,000
    
    
    $
    8.00
    
    
    $
    11.2001/01/09 - 01/31/09
    
    
    80,000
    
    
    $
    10.25
    
    
    $
    12.2502/01/09 - 03/31/09
    
    
    140,000
    
    
    $
    10.25
    
    
    $
    12.2504/01/09 - 09/30/09
    
    
    300,000
    
    
    $
    7.00
    
    
    $
    9.7304/01/09 - 09/30/09
    
    
    120,000
    
    
    $
    7.25
    
    
    $
    9.8004/01/09 - 09/30/09
    
    
    420,000
    
    
    $
    8.00
    
    
    $
    10.70
  29




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##### Table of Contents



Natural
    
    
    Purchased
    
    
    Written
    
    
    WrittenGas
    
    
    Put
    
    
    Call
    
    
    PutSettlement Period
    
    (MMbtu)
    
    
    (Nymex)
    
    
    (Nymex)
    
    
    (Nymex)Natural Gas Three Way Costless Collars10/01/08 - 03/31/09
    
    
    300,000
    
    
    $
    8.00
    
    
    $
    10.35
    
    
    $
    5.50
 Crude
    
    
    Purchased
    
    
    WrittenOil
    
    
    Put
    
    
    CallSettlement Period
    
    (Bbls)
    
    
    (Nymex)
    
    
    (Nymex)Oil Costless Collars04/01/08 - 04/30/08
    
    
    2,000
    
    
    $
    60.00
    
    
    $
    74.7504/01/08 - 06/30/08
    
    
    3,000
    
    
    $
    65.00
    
    
    $
    82.6004/01/08 - 06/30/08
    
    
    9,000
    
    
    $
    62.00
    
    
    $
    81.6004/01/08 - 10/31/08
    
    
    21,000
    
    
    $
    65.70
    
    
    $
    90.0004/01/08 - 12/31/08
    
    
    18,000
    
    
    $
    57.50
    
    
    $
    75.5004/01/08 - 12/31/08
    
    
    18,000
    
    
    $
    85.00
    
    
    $
    117.0004/01/08 - 12/31/08
    
    
    18,000
    
    
    $
    57.50
    
    
    $
    76.0006/01/08 - 10/31/08
    
    
    30,000
    
    
    $
    90.00
    
    
    $
    120.0007/01/08 - 08/31/08
    
    
    4,000
    
    
    $
    65.00
    
    
    $
    80.6011/01/08 - 12/31/08
    
    
    8,000
    
    
    $
    87.75
    
    
    $
    120.0011/01/08 - 06/30/09
    
    
    24,000
    
    
    $
    62.00
    
    
    $
    81.7501/01/09 - 03/31/09
    
    
    21,000
    
    
    $
    86.50
    
    
    $
    120.00
 
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   30




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Issuer Purchases of Equity Securities
  Total Number of
    
    
    Average PricePeriod
    
    Shares Purchased
    
    
    Paid per ShareJanuary 2008
    
    
    16,330
    
    
    $
    7.375
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSON OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 31.1
    
    Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 193431.2
    
    Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 193432.1
    
    Certification of Chief Executive Officer of the Company pursuant to 18 U.S.C. § 135032.2
    
    Certification of Chief Financial Officer of the Company pursuant to 18 U.S.C. § 1350
  31




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##### Table of Contents



SIGNATURES
  BRIGHAM EXPLORATION COMPANYBy:
    /s/  BEN M. BRIGHAMBen M. BrighamChief Executive Officer, President
and Chairman of the BoardBy:
    /s/  EUGENE B. SHEPHERD, JR.Eugene B. Shepherd, Jr.Executive Vice President and
Chief Financial Officer  32




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description31.1
    
    
    Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 193431.2
    
    
    Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 193432.1
    
    
    Certification of Chief Executive Officer of the Company pursuant to 18 U.S.C. § 135032.2
    
    
    Certification of Chief Financial Officer of the Company pursuant to 18 U.S.C. § 1350
  33