##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 for the fiscal year ended December 31, 2007
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 0-6529
 DOUBLE EAGLE PETROLEUM CO.
  Maryland
    
    83-021469(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)777 Overland Trail (P.O. Box 766) Casper, Wyoming
    
    82601(Address of principal executive offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
  Title of each class
    
    Name of each exchange on which registeredNone
    
    None
  Title of each class
    
    Name of each exchange on which registered$.10 Par Value Common Stock
    
    NASDAQ Global Select Market$.10 Par Value Series A Cumulative Preferred Stock
    
    NASDAQ Global Select Market
 o þ
 o þ
 þ o
 þ
  Large accelerated filer
o
    
    Accelerated filer
þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
  .




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##### 



PAGEPART IItems 1. and 2.
    
    Business and Properties
    
    
    3General
    
    
    3Overview and Strategy
    
    
    3Operations
    
    
    4Reserves
    
    
    9Production
    
    
    10Delivery Contracts
    
    
    10Productive Wells
    
    
    11Drilling Activity
    
    
    11Finding and Development Costs
    
    
    12Acreage
    
    
    13Other Significant Developments Since December 31, 2006
    
    
    14Marketing and Major Customers
    
    
    14Title to Properties
    
    
    14Seasonality
    
    
    15Competition
    
    
    15Government Regulations
    
    
    15Forward-looking Statements
    
    
    16Employees and Office Space
    
    
    17Available Information
    
    
    17Glossary
    
    
    18Item 1A.
    
    Risk Factors
    
    
    20Item 1B.
    
    Unresolved Staff Comments
    
    
    24Item 3.
    
    Legal Proceedings
    
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    24PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    24Item 6.
    
    Selected Financial Data
    
    
    28Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    45Item 8.
    
    Financial Statements and Supplementary Data
    
    
    47Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    47Item 9A.
    
    Controls and Procedures
    
    
    47Item 9B.
    
    Other Information
    
    
    50PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    50Item 11.
    
    Executive Compensation
    
    
    50Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    50Item 13.
    
    Certain Relationships and Related Transactions
    
    
    50Item 14.
    
    Principal Accountant Fees and Services
    
    
    50PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    50Subsidiaries of RegistrantConsent of Hein & Associates LLPConsent of Netherland, Sewell & AssociatesCertification of Principal Executive Officer and Chief Financial OfficerCertification Pursuant to Section 906
  2




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PART I
 
 ITEMS 1. AND 2. BUSINESS AND PROPERTIES
 
 General
  
 Overview and Strategy
     3




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Operations
   Basin
    
    Gross Acres
    
    Net AcresWashakie Basin
    
    
    117,274
    
    
    
    42,097Huntington Basin
    
    
    192,975
    
    
    
    185,731Greater Green River Basin
    
    
    38,530
    
    
    
    3,264Powder River Basin
    
    
    33,353
    
    
    
    3,082Wind River Basin
    
    
    50,826
    
    
    
    2,357Other
    
    
    88,186
    
    
    
    29,474Total
    
    
    521,144
    
    
    
    266,005
  The Atlantic Rim Coal Bed Natural Gas Project
   Catalina Unit
  4




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Doty Mountain Unit
     Sun Dog Unit
  5




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Other Units
  The Pinedale Anticline in the Green River Basin of Wyoming
      The Wind River Basin in central Wyoming
  6




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Madden Anticline
      South Sand Draw
  The Moxa Arch and other areas in southwest Wyoming
  Exploration Projects
   7




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Eastern Washakie Midstream Pipeline LLC
  8




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Reserves
  Oil and gas reserve estimates:
 As of December 31,2007
    
    
    2006
    
    
    2005Proved developed oil reserves (Bbls)
    
    
    253,478
    
    
    
    254,346
    
    
    
    199,931Proved undeveloped oil reserves (Bbls)
    
    
    159,334
    
    
    
    105,819
    
    
    
    128,821Total proved oil reserves (Bbls)
    
    
    412,812
    
    
    
    360,165
    
    
    
    328,752Proved developed gas reserves (Mcf)
    
    
    44,782,553
    
    
    
    30,075,467
    
    
    
    23,032,277Proved undeveloped gas reserves (Mcf)
    
    
    26,471,312
    
    
    
    18,421,252
    
    
    
    24,202,058Total proved gas reserves (Mcf)
    
    
    71,253,865
    
    
    
    48,496,719
    
    
    
    47,234,335Total proved gas equivalents (Mcfe) (1)
    
    
    73,730,737
    
    
    
    50,657,709
    
    
    
    49,206,847Present value of estimated future net cash flows
before income taxes, discounted at 10% (2)
    
    $
    182,594
    
    
    $
    67,639
    
    
    $
    126,776Reconciliation of non-GAAP financial measure:PV-10
    
    $
    182,594
    
    
    $
    67,639
    
    
    $
    126,776Less: Undiscounted income taxes
    
    
    (96,370
    )
    
    
    (42,578
    )
    
    
    (74,738
    )Plus: 10% discount factor
    
    
    44,075
    
    
    
    24,972
    
    
    
    39,255Discounted income taxes
    
    
    (52,295
    )
    
    
    (17,606
    )
    
    
    (35,483
    )Standardized measure of discounted future
net cash flows
    
    $
    130,299
    
    
    $
    50,033
    
    
    $
    91,293
 
 (1)
    
    Oil is converted to Mcf of gas equivalent at one barrel per six Mcf.(2)
    
    The present value of estimated future net cash flows as of each date shown was calculated
using oil and gas prices being received by each respective property as of that date. The
average prices utilized for December 31, 2007, 2006, and 2005, respectively, were $6.04 per
MMBtu and $92.50 per barrel of oil; $4.46 per MMBtu and $57.75 per barrel of oil; and $7.72
per MMBtu and $57.75 per barrel of oil.  9




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Production
  For the Year Ended December 31,2007
    
    2006
    
    2005Quantities:Oil (Bbls)
    
    
    13,963
    
    
    
    12,729
    
    
    
    15,470Gas (MMcf)
    
    
    2,928
    
    
    
    3,141
    
    
    
    2,976Average sales price:Oil ($/Bbl)
    
    $
    63.17
    
    
    $
    57.90
    
    
    $
    49.26Gas($/Mcf)
    
    $
    5.18
    
    
    $
    5.57
    
    
    $
    6.62Average Production Cost ($/Mcfe)
    
    $
    1.89
    
    
    $
    1.11
    
    
    $
    1.24Average Production Tax ($/Mcfe)
    
    $
    0.64
    
    
    $
    0.69
    
    
    $
    0.82
 
 Delivery Contracts
  Accounting for Derivative Instruments and Hedging Activities,
 10




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RemainingContractual
    
    Daily
    
    
    
    
    
    FixedProperty
    
    Volume
    
    Production
    
    Term
    
    Price/McfCatalina
    
    
    517,000
    
    
    
    1,000
    
    
    
    06/07-05/09
    
    
    $
    5.47547,000
    
    
    
    1,000
    
    
    
    07/07-06/09
    
    
    $
    5.841,094,000
    
    
    
    2,000
    
    
    
    07/07-06/09
    
    
    $
    5.69670,000
    
    
    
    1,000
    
    
    
    11/07-10/09
    
    
    $
    5.66Atlantic Rim
    
    
    578,000
    
    
    
    1,000
    
    
    
    08/07-07/09
    
    
    $
    6.15Pinedale Anticline
    
    
    547,000
    
    
    
    1,000
    
    
    
    07/07-06/09
    
    
    $
    6.41Company Total
    
    
    3,953,000
   
 Productive Wells
  Oil
    
    GasState
    
    Gross
    
    Net
    
    Gross
    
    NetWyoming
    
    
    86
    
    
    
    5.9940
    
    
    
    828
    
    
    
    68.7538Other
    
    
    27
    
    
    
    0.3934
    
    
    
    5
    
    
    
    0.0855Total
    
    
    113
    
    
    
    6.3874
    
    
    
    833
    
    
    
    68.8393
 
 Drilling Activity
  11




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For the Year Ended December 31,2007
    
    2006
    
    2005Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetExploratoryOil
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gas
    
    
    1
    
    
    
    0.50
    
    
    
    2
    
    
    
    1.26
    
    
    
    25
    
    
    
    0.62Dry Holes
    
    
    1
    
    
    
    0.98
    
    
    
    1
    
    
    
    0.33
    
    
    
    
    
    
    
    Water Injection
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    2.02Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    1.48
    
    
    
    3
    
    
    
    1.59
    
    
    
    28
    
    
    
    2.64DevelopmentOil
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gas
    
    
    223
    
    
    
    35.06
    
    
    
    87
    
    
    
    7.32
    
    
    
    75
    
    
    
    1.13Dry Holes
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    0.21
    
    
    
    
    
    
    
    Water Injection
    
    
    9
    
    
    
    2.72
    
    
    
    4
    
    
    
    0.82
    
    
    
    
    
    
    
    Other
    
    
    1
    
    
    
    0.08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    37.86
    
    
    
    92
    
    
    
    8.35
    
    
    
    75
    
    
    
    1.13Total
    
    
    235
    
    
    
    39.34
    
    
    
    95
    
    
    
    9.94
    
    
    
    103
    
    
    
    3.77
  
 Finding and Development Costs
  As of December 31,2007
    
    2006
    
    2005Proved developed (MMcfe)
    
    
    21,888
    
    
    
    11,863
    
    
    
    9,051Proved undeveloped (MMcfe)
    
    
    23,317
    
    
    
    (1,468
    )
    
    
    6,622Total proved reserves added
    
    
    45,205
    
    
    
    10,395
    
    
    
    15,673
   12




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Acreage
  Developed Acres (1)
    
    Undeveloped Acres (2)
    
    Total AcresState
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetWyoming
    
    
    114,461
    
    
    
    7,893
    
    
    
    111,770
    
    
    
    47,374
    
    
    
    226,231
    
    
    
    55,267Nevada
    
    
    
    
    
    
    
    
    
    
    192,975
    
    
    
    185,731
    
    
    
    192,975
    
    
    
    185,731Other
    
    
    2,906
    
    
    
    66
    
    
    
    51,612
    
    
    
    22,681
    
    
    
    54,518
    
    
    
    22,747Total
    
    
    117,367
    
    
    
    7,959
    
    
    
    356,357
    
    
    
    255,786
    
    
    
    473,724
    
    
    
    263,745
  Developed Acres (1)
    
    Undeveloped Acres (2)
    
    Total AcresState
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetWyoming
    
    
    10,464
    
    
    
    162
    
    
    
    28,234
    
    
    
    1,552
    
    
    
    38,698
    
    
    
    1,714Other
    
    
    3,089
    
    
    
    63
    
    
    
    5,633
    
    
    
    483
    
    
    
    8,722
    
    
    
    546Total
    
    
    13,553
    
    
    
    225
    
    
    
    33,867
    
    
    
    2,035
    
    
    
    47,420
    
    
    
    2,260
 
 (1)
    
    Developed acreage is acreage assigned to producing wells for the spacing unit of the
producing formation. Developed acreage in certain of the Companys properties that include
multiple formations with different well spacing requirements may be considered undeveloped for
certain formations, but have only been included as developed acreage in the presentation
above.(2)
    
    Undeveloped acreage is lease acreage on which wells have not been drilled or completed to a
point that would permit the production of commercial quantities of oil and gas regardless of
whether such acreage contains proved reserves.   Expiring AcreageFiscal Year
    
    Gross
    
    Net2008
    
    
    1,315
    
    
    
    6282009
    
    
    20,837
    
    
    
    7,8952010 and thereafter
    
    
    498,992
    
    
    
    257,482Total
    
    
    521,144
    
    
    
    266,005
 13




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Other Significant Developments Since December 31, 2006
      
 Marketing and Major Customers
   
 Title to Properties
  14




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Seasonality
   
 Competition
  
 Government Regulations
      15




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Environmental Laws and Regulations
   
 Cautionary Information about Forward-Looking Statements
  
    
    Our ability to continue to develop our coal bed methane projects in the Atlantic Rim;
    
    Our ability to obtain, or a decline in, oil or gas production, or a decline in oil or
gas prices;
    
    Incorrect estimates of required capital expenditures;
    
    Increases in the cost of drilling, completion and gas collection or other costs of
production and operations;
    
    Our ability to increase our natural gas and oil reserves;
    
    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;
 16




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
    
    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 and political conditions, including tax rates or policies and
inflation rates;
    
    Changes in or compliance with laws and regulations, particularly those relating to
taxation, safety and protection of the environment;
    
    Weather 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; and
    
    The outcome of any future litigation or similar disputes and the impact on any such
outcome or related settlements.
   
 Employees and Office Space
  
 Available Information
 http://www.dble.us/
 
 http://www.dble.us/
 Information on our website is not incorporated by reference into this Form 10-K and should not be
considered a part of this document.
 17




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Glossary
  3-D seismic or 3-D data.
 Bbl.
 Bcf.
 Bcfe.
 Boe.
 Darcy.
 Dip meter.
 Development well.
 Dry hole
 Estimated net proved reserves.
 Exploratory well.
 Farmout
 Field.
 Gross acre.
 Gross well.
 MBbl.
 Mcf.
 Mcfe
 Millidarcy.
 MMcf.
 18




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MMcfe.
 MMBtu.
 Net acres or net wells.
 Permeability.
 Productive well.
 Proved developed reserves.
 Proved reserves.
 Proved undeveloped reserves.
 PV-10 value.
 Recompletion.
 Royalty.
 Royalty interest.
 Undeveloped acreage.
 Velocity.
 Working interest
 19




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ITEM 1A. RISK FACTORS
  We may be unable to further develop our coal bed methane projects in the Atlantic Rim, which would
have a significant adverse effect on our current growth opportunities.
 coal bed methane
 We cannot predict the future price of oil and natural gas and an extended decline in prices could
hurt our profitability, financial condition and ability to grow.
  We could be adversely impacted by a variety of changes in the oil and gas market which are beyond
our control.
  We may be unable to find additional reserves, which would adversely impact our ability to sustain
production levels.
  20




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We may be unable to fund our planned capital expenditures.
  
    
    general economic and financial market conditions;
    
    oil and natural gas prices; and
    
    our market value and operating performance.
  New government regulation and environmental risks could increase our cost of doing business.
  
    
    prevention of waste;
    
    discharge of materials into the environment;
    
    conservation of oil and natural gas, pollution, permits for drilling operations,
drilling bonds, reports concerning operations;
    
    spacing of wells; and
    
    unitization and pooling of properties.
  The exploration, development and operation of oil and gas properties involve substantial risks that
may result in a total loss of investment.
  
    
    unexpected drilling conditions;
    
    pressure or irregularities in formations;
    
    equipment failures or accidents;
    
    adverse changes in prices;
    
    weather conditions;
    
    shortages in experienced labor; and
 21




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
    
    shortages or delays in the delivery of equipment.
  
    
    unusual or unexpected geological formations, pressures, equipment failures or accidents,
fires, explosions, blowouts, cratering, pollution and other environmental risks;
    
    shortages or delays in the availability of drilling rigs and the delivery of equipment;
and
    
    loss of circulation of drilling fluids or other conditions.
  Our industry experiences numerous operating hazards that could result in substantial losses.
   Our prices may be impacted adversely by new taxes.
  Our reserves and future net revenues may differ significantly from our estimates.
  Acquisitions are a part of our business strategy and are subject to the risks and uncertainties of
evaluating recoverable reserves and potential liabilities.
  22




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The unavailability or high cost of drilling rigs, equipment, supplies, personnel and other oil
field services could adversely affect our ability to execute our exploration and development plans
on a timely basis and within our budget.
  We do not control all of our operations and development projects.
   
    
    timing and amount of capital expenditures;
    
    expertise and financial resources;
    
    inclusion of other participants in drilling wells; and
    
    use of technology.
  Competition in the oil and natural gas industry is intense, and many of our competitors have
greater financial and other resources than we do.
  
    
    seeking to acquire desirable producing properties or new leases for future exploration;
    
    seeking to acquire the equipment and expertise necessary to develop and operate our
properties; and
    
    Retention and hiring of skilled employees.
 23




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We depend on key personnel.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
 Common Stock
 Market Information.
  Quarter Ended
    
    High
    
    LowDecember 31, 2007
    
    $
    18.25
    
    
    $
    13.13September 30, 2007
    
    
    18.41
    
    
    
    13.77June 30, 2007
    
    
    21.10
    
    
    
    16.81March 31, 2007
    
    
    24.86
    
    
    
    17.59December 31, 2006
    
    $
    29.50
    
    
    $
    18.05September 30, 2006
    
    
    20.52
    
    
    
    15.89June 30, 2006
    
    
    19.40
    
    
    
    14.04March 31, 2006
    
    
    20.68
    
    
    
    15.00
 24




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Holders
 Dividends
 Equity Compensation Plans.
 (a)
    
    
    (b)
    
    
    (c)Number ofsecurities remainingavailable for futureNumber of
    
    
    Weighted-
    
    
    issuance undersecurities to be
    
    
    average
    
    
    equityissued upon
    
    
    exercise price
    
    
    compensationexercise of
    
    
    of
    
    
    plans (excludingoutstanding
    
    
    outstanding
    
    
    securities reflectedPlan category
    
    options
    
    
    options
    
    
    in column (a))Equity Compensation plans
approved by security holders
    
    
    263,500
    
    
    $
    17.71
    
    
    
    772,614
    (1)
 
 (1)
    
    Represents no shares available for issuance under the 1996 Stock Option Plan, no shares
available for issuance under the 2000 Stock Option Plan, 130,971 shares available for issuance
under the 2002 Stock Option Plan, 141,643 shares available for issuance under the 2003 Stock Option
and Compensation Plan and 500,000 shares available for issuance under the 2007 Stock Incentive
Plan. Recent Sales of Unregistered Securities.
  25




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Performance Graph
 Comparison of Five-Year Cumulative Total Return Among
Double Eagle Petroleum Co., the NASDAQ U.S. Index and the Peer Group Index
Total Return (Stock Price Plus Reinvested Dividends)
 
   26




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Series A Cumulative Preferred Stock
 Market Information.
  Quarter Ended
    
    High
    
    LowDecember 31, 2007
    
    $
    26.95
    
    
    $
    24.50September 30, 2007
    
    
    28.25
    
    
    
    23.56
  Holders
 Dividends
 Redemption Provisions.
 Redemption Date on orBefore
    
    Redemption PriceJune 30, 2008
    
    $26.00June 30, 2009
    
    $25.75June 30, 2010
    
    $25.50June 30, 2011
    
    $25.25June 30, 2012 or thereafter
    
    $25.00
 Liquidation Preference.
 Voting Rights.
 27




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ITEM 6. SELECTED FINANCIAL DATA
  Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(In thousands, except per share and volume data)Statement of Operations InformationTotal operating revenues
    
    $
    17,197
    
    
    $
    19,032
    
    
    $
    20,496
    
    
    $
    13,267
    
    
    $
    6,138Income (loss) from operations
    
    $
    (17,909
    )
    
    $
    3,695
    
    
    $
    5,985
    
    
    $
    4,451
    
    
    $
    1,136Net income (loss)
    
    $
    (11,603
    )
    
    $
    2,109
    
    
    $
    3,965
    
    
    $
    4,028
    
    
    $
    972Net income (loss) attributable to common stock
    
    $
    (13,413
    )
    
    $
    2,109
    
    
    $
    3,965
    
    
    $
    4,028
    
    
    $
    972Net income (loss) per common share:Basic
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46
    
    
    $
    0.48
    
    
    $
    0.14Diluted
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46
    
    
    $
    0.47
    
    
    $
    0.14Balance Sheet InformationTotal assets
    
    $
    84,597
    
    
    $
    64,406
    
    
    $
    44,211
    
    
    $
    30,969
    
    
    $
    23,955Line of credit
    
    $
    3,445
    
    
    $
    13,221
    
    
    $
    3,000
    
    
    $
    
    
    
    $
    Total long-term liabilities
    
    $
    5,895
    
    
    $
    17,184
    
    
    $
    5,732
    
    
    $
    583
    
    
    $
    359Stockholders equity
    
    $
    28,624
    
    
    $
    33,042
    
    
    $
    29,778
    
    
    $
    24,927
    
    
    $
    19,856Cash Flow InformationNet cash provided by (used in):Operating activities
    
    $
    5,166
    
    
    $
    10,951
    
    
    $
    10,319
    
    
    $
    7,434
    
    
    $
    3,239Investing activities
    
    $
    (42,056
    )
    
    $
    (22,241
    )
    
    $
    (16,259
    )
    
    $
    (7,377
    )
    
    $
    (8,769
    )Financing activities
    
    $
    36,404
    
    
    $
    10,470
    
    
    $
    3,701
    
    
    $
    692
    
    
    $
    8,318Total proved reservesOil (MBbl)
    
    
    413
    
    
    
    360
    
    
    
    329
    
    
    
    278
    
    
    
    209Gas (MMcf)
    
    
    71,254
    
    
    
    48,497
    
    
    
    47,234
    
    
    
    34,935
    
    
    
    22,819MMcfe
    
    
    73,731
    
    
    
    50,657
    
    
    
    49,207
    
    
    
    36,603
    
    
    
    24,073Net production volumesOil (Bbl)
    
    
    13,963
    
    
    
    12,729
    
    
    
    15,470
    
    
    
    16,886
    
    
    
    17,344Gas (Mcf)
    
    
    2,928,335
    
    
    
    3,140,653
    
    
    
    2,976,094
    
    
    
    2,559,557
    
    
    
    1,320,850Mcfe
    
    
    3,012,113
    
    
    
    3,217,027
    
    
    
    3,068,914
    
    
    
    2,660,873
    
    
    
    1,424,914
 28




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 (Amounts in thousands of dollars, except share, per share data, and amounts per unit of production)
 The following discussion includes forward-looking statements. Such statements are described in the section entitled Forward-Looking Statements on page 16 of this Form 10-K.
 BUSINESS OVERVIEW
     Developments since December 31, 2006:
   
    
    At the Atlantic Rim, we received the Final Record of Decision on the Atlantic Rim
Environmental Impact Statement (EIS) on May 21, 2007, which allows for the drilling of
up to 1,800 coal-bed methane wells and 200 conventional oil and gas wells in the Atlantic
Rim Area (for further information regarding the EIS, see continued discussion, within this
section, below). During the fourth quarter of 2007, we drilled 33 wells in the Catalina
Unit, of which six were completed and producing by December 31, 2007. We expect to have
the remaining wells completed and producing by the end of the first quarter 2008. The new
wells established production levels specified by the Unit Operating Agreement on December
21, 2007, which triggered the formation of the Catalina Unit PA, bringing Double Eagles
working interest in the new wells and in the 14 existing producing wells in the Cow Creek
Field to 73.84%. At the Doty Mountain Unit, in which Double Eagle has 20.55% working
interest, we began receiving and selling our share of production in July 2006. We are in
an under-produced position for prior years production and began taking our gas in-kind
and receiving make-up gas on August 1, 2007. See Item 15, Note 1 in the Notes to the
Consolidated Financial Statements for additional discussion of production imbalances.
Also within the Atlantic Rim, we are participating in the drilling of 52 additional wells
within the Sun Dog Unit. Double Eagle currently has a 4.55% working interest
 29




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##### Table of Contents



in the Unit,
which will change to an estimated 8.4% working interest once the new wells are drilled.
It is
expected that these wells will be drilled and completed by March 2008. We are currently in
an under-produced position for prior and current years production (through July 31, 2007)
at the Sun Dog Unit and began receiving our share of current production and make up gas on
August 1, 2007. See Item 15, Note 1 in the Notes to the Consolidated Financial Statements
for additional discussion of production imbalances.
    
    At the Pinedale Anticline, we participated in the drilling of 18 additional wells.
These wells have been drilled and are expected to be completed at a rate of three wells in
April and five wells per month in each of May, June and July of 2008.
    
    In the Wind River Basin, we began drilling the Waltman 34-24 well on December 1, 2007.
This well is a 40 acre offset to the Chevron Waltman 96 well that has been producing since
early 2007. Gas shows at commercially feasible levels have been seen. Management expects
the well to be completed sometime during the second quarter of 2008.
    
    On the Moxa Arch, we participated in the drilling of 71 development wells in 2007,
with working interests ranging from 0.11% to 16.27% in 2007.
     
    
    We participated in the drilling of the Straight Flush 17-1 well in Huntington Valley,
Nevada during the third quarter of 2007. Double Eagle had a 97.3% working interest in the
well. No commercial deposits of oil and gas were identified and the well was plugged in
October 2007. Costs incurred through December 31, 2007 of $1,983 were charged to dry hole
costs.
 30




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##### Table of Contents




    
    At Christmas Meadows, we started the drilling of the Table Top Unit #1 well on September
8, 2006 at 235 feet, at the base of the conductor pipe that was set in the summer of 2006.
On February 26, 2007 the Table Top Unit #1 well at the Christmas Meadows Prospect reached a
depth of 15,760 feet and it was plugged back to a depth of 11,393 feet. The Table Top Unit
#1 well did not find reservoir rocks with sufficient permeability in the Cretaceous
formation and operations were suspended to assess alternative approaches to completing the
project. The Table Top Unit as originally formed was dissolved and having met the
obligations for the Unit test well, the Main Fork Unit was formed and timing extended until
at least April 2009. The Company is in the process of evaluating potential alternatives,
including drilling or farming out the drilling of the Table Top Unit #1. FASB Staff
Position FAS 19-1 (FSP 19-1) requires management to assess continued capitalization of
exploratory projects capitalized for a period greater than one year to determine whether or
not it is appropriate to continue capitalization of the costs. Based on the guidance
included in FSP 19-1, $5,773 of capitalized costs associated with the Table Top Unit #1
were expensed. For further information regarding FSP 19-1, see continued discussion,
within this section, below.
    
    We began drilling the Cow Creek Unit Deep #2 well (a combination exploratory and
development well) on June 1, 2006, with an expected total depth of 12,360 feet. The well
was drilled, in 2006, to a depth of 9,922 feet and casing was run to that point. Double
Eagle has an 84% interest in this well. We are currently evaluating our options with this
well which may include drilling the well deeper than its current depth or using it as a
water injection well. The well is treated as two wells for accounting purposes. The costs
incurred to drill to the Mesaverde formation, a proved area known to be productive, are
treated as developmental costs, while the costs incurred to drill beyond the Mesaverde
formation are treated as exploratory costs. We are currently evaluating the operational
opportunities available for this well, however, due to the passage of time since this
project was temporarily abandoned, and the current lack of firm plans regarding the future
of this well, FSP 19-1 requires the exploratory portion of this well to be expensed, which
resulted in $4,395 being expensed during the quarter ended September 30, 2007. The
remaining capitalized costs represent the developmental portion of the well and these costs
will remain capitalized. For further information regarding FSP 19-1, see continued
discussion, within this section, below.
    
    The PH State 16-1 (South Fillmore) well was completed during the third quarter of 2006.
The PH State 16-1 was completed in the Mesaverde Sand and Coal formations. In July 2007,
GMT Exploration Company LLC drilled the SJ Fee 11-9 well, in which the Company has a 50%
working interest before payout and a 30% working interest after payout, one mile northwest
of the PH State 16-1 well. The SJ Fee 11-9 well has been completed in the Mesaverde Sand
interval and commercial gas sales are expected to begin early in 2008. Due to the proximity
of the PH State 16-1 well to the SJ Fee 11-9 well, which is expected to have commercially
viable production, the Company is currently evaluating the project to determine if the PH
State 16-1 well can be recompleted as a producer from the sand formation and if the Company
will potentially drill or participate in the drilling of additional wells in this area.
However, due to the passage of time, and as required by FSP 19-1, the Company expensed
$2,759 of capitalized costs relating to the PH State 16-1 well during the quarter ended
December 31, 2007. For further information regarding FSP 19-1, see continued discussion,
within this section, below.
   31




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##### Table of Contents



Our Industry:
   
    
    We attempt to reduce our overall exposure to commodity price fluctuations through the
use of various fixed delivery contracts for some of our production. The duration of our
various fixed delivery contracts depends on our view of market conditions, available
contract prices and our operating strategy. Use of such contracts may limit the risk of
fluctuating cash flows. As of December 31, 2007, we had sales delivery contracts in effect
for approximately 64% of our current daily production.
    
    We have an inventory of attractive drilling locations, allowing us to grow reserves and
replace and expand production organically without having to rely solely on acquisitions.
Drilling opportunities in both the Atlantic Rim and the Pinedale Anticline are expected to
last for several years.
    
    The Company completed public offerings (pursuant to our universal shelf registration
statement on Form S-3 filed with the Securities and Exchange Commission, declared effective
on December 15, 2006) of 500,000 shares of Common Stock and 1,610,000 shares of 9.25%
Series A Cumulative Preferred Stock on January 23, 2007 and July 5, 2007, respectively. The
universal shelf on Form S-3 now permits, but does not obligate, Double Eagle to sell, in
one or more public offerings, shares of newly issued common stock, shares of newly issued
preferred stock, warrants, stock purchase contracts, stock purchase units or debt
securities, or any combination of such securities, for proceeds in an aggregate amount of
up to $200 million ($150 million remaining as of December 31, 2007). The terms of future
offerings, if any, under the shelf registration will be determined at the time of the
offering and will be stated in a prospectus supplement.
 Development Outlook for 2008:
  32




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##### Table of Contents



Atlantic Rim.
 Pinedale Anticline.
 Other.
  33




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##### Table of Contents



RESULTS OF OPERATIONS
  As of, and for the year ended, December 31,
    
    
    Percent change between years2007
    
    
    2006
    
    
    2005
    
    
    2006 to 2007
    
    
    2005 to 2006Excluding Imbalance Activity:Net production volumesOil (Bbl)
    
    
    13,963
    
    
    
    12,729
    
    
    
    15,470
    
    
    
    10
    %
    
    
    -18
    %Gas (Mcf)
    
    
    2,971,122
    
    
    
    2,894,894
    
    
    
    2,976,094
    
    
    
    3
    %
    
    
    -3
    %Mcfe
    
    
    3,054,900
    
    
    
    2,971,268
    
    
    
    3,068,914
    
    
    
    3
    %
    
    
    -3
    %Average daily productionMcfe
    
    
    8,370
    
    
    
    8,140
    
    
    
    8,408
    
    
    
    3
    %
    
    
    -3
    %Including Imbalance Activity:Net production volumesOil (Bbl)
    
    
    13,963
    
    
    
    12,729
    
    
    
    15,470
    
    
    
    10
    %
    
    
    -18
    %Gas (Mcf)
    
    
    2,928,335
    
    
    
    3,140,653
    
    
    
    2,976,094
    
    
    
    -7
    %
    
    
    6
    %Mcfe
    
    
    3,012,113
    
    
    
    3,217,027
    
    
    
    3,068,914
    
    
    
    -6
    %
    
    
    5
    %Average daily productionMcfe
    
    
    8,252
    
    
    
    8,814
    
    
    
    8,408
    
    
    
    -6
    %
    
    
    5
    %Average price per unit productionOil (Bbl)
    
    $
    63.17
    
    
    $
    57.90
    
    
    $
    49.26
    
    
    
    9
    %
    
    
    18
    %Gas (Mcf)
    
    $
    5.18
    
    
    $
    5.57
    
    
    $
    6.62
    
    
    
    -7
    %
    
    
    -16
    %Mcfe
    
    $
    5.33
    
    
    $
    5.67
    
    
    $
    6.66
    
    
    
    -6
    %
    
    
    -15
    %Including price risk management
activitiesOil and gas production revenuesOil revenues
    
    $
    882
    
    
    $
    737
    
    
    $
    762
    
    
    
    20
    %
    
    
    -3
    %Gas revenues
    
    
    15,162
    
    
    
    17,491
    
    
    
    19,689
    
    
    
    -13
    %
    
    
    -11
    %Total
    
    $
    16,044
    
    
    $
    18,228
    
    
    $
    20,451
    
    
    
    -12
    %
    
    
    -11
    %Oil and gas production costsProduction costs
    
    $
    5,696
    
    
    $
    3,560
    
    
    $
    3,800
    
    
    
    60
    %
    
    
    -6
    %Production taxes
    
    
    1,933
    
    
    
    2,209
    
    
    
    2,523
    
    
    
    -12
    %
    
    
    -12
    %Total
    
    $
    7,629
    
    
    $
    5,769
    
    
    $
    6,323
    
    
    
    32
    %
    
    
    -9
    %Data on a per Mcfe basisAverage price
    
    $
    5.33
    
    
    $
    5.67
    
    
    $
    6.66
    
    
    
    -6
    %
    
    
    -15
    %Production
costs, excluding pipeline
    
    
    1.89
    
    
    
    1.11
    
    
    
    1.24
    
    
    
    71
    %
    
    
    -11
    %Production taxes
    
    
    0.64
    
    
    
    0.69
    
    
    
    0.82
    
    
    
    -7
    %
    
    
    -16
    %Depletion and amortization
    
    
    1.51
    
    
    
    1.29
    
    
    
    1.17
    
    
    
    17
    %
    
    
    10
    %Total operating costs
    
    
    4.04
    
    
    
    3.09
    
    
    
    3.23
    
    
    
    31
    %
    
    
    -4
    %Gross margin
    
    $
    1.29
    
    
    $
    2.58
    
    
    $
    3.43
    
    
    
    -50
    %
    
    
    -25
    %Gross margin percentage
    
    
    24
    %
    
    
    46
    %
    
    
    52
    %
 34




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##### Table of Contents



Year ended December 31, 2007 compared to the year ended December 31, 2006
 Oil and gas sales volume and price comparisons
     Transportation revenue
  Oil and gas production expenses, depreciation, depletion and amortization
  35




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##### Table of Contents



Dry hole and impairment
   General and administrative
  Income taxes
  Year ended December 31, 2006 compared to the year ended December 31, 2005
 Oil and gas sales volume and price comparisons
  36




---



##### Table of Contents



Transportation revenue
  Oil and gas production expenses, depreciation, depletion and amortization
    General and administrative
  Income taxes
  37




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
    As of and for the Years Ended December 31,
    
    Percent Change Between Years2007
    
    2006
    
    2005
    
    2006 to 2007
    
    2005 to 2006Financial informationWorking capital
    
    $
    (7,012
    )
    
    $
    (7,006
    )
    
    $
    (2,804
    )
    
    
    0
    %
    
    
    150
    %Line of credit
    
    $
    3,445
    
    
    $
    13,221
    
    
    $
    3,000
    
    
    
    -74
    %
    
    
    341
    %Stockholders equity
    
    $
    28,624
    
    
    $
    33,042
    
    
    $
    29,778
    
    
    
    -13
    %
    
    
    11
    %Net income (loss) attributable to common stock
    
    $
    (13,413
    )
    
    $
    2,109
    
    
    $
    3,965
    
    
    
    -736
    %
    
    
    -47
    %Net income (loss) per common share:Basic
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46
    
    
    
    -703
    %
    
    
    -4
    %Diluted
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46
    
    
    
    -705
    %
    
    
    -47
    %Net cash provided by
operating activities
    
    $
    5,166
    
    
    $
    10,951
    
    
    $
    10,319
    
    
    
    -53
    %
    
    
    6
    %Net cash used in
investing activities
    
    $
    (42,056
    )
    
    $
    (22,241
    )
    
    $
    (16,259
    )
    
    
    89
    %
    
    
    37
    %Net cash provided by
financing activities
    
    $
    36,404
    
    
    $
    10,470
    
    
    $
    3,701
    
    
    
    248
    %
    
    
    183
    %
  Capital Requirements
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Property acquisition costs
    
    $
    316
    
    
    $
    100
    
    
    $
    407Exploration
    
    
    3,600
    
    
    
    11,304
    
    
    
    3,693Development
    
    
    41,337
    
    
    
    10,046
    
    
    
    14,873$
    45,253
    
    
    $
    21,450
    
    
    $
    18,973
 38




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##### Table of Contents



Contractual Obligations
  39




---



##### Table of Contents



One year
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanTotal
    
    
    or less
    
    
    Years
    
    
    Years
    
    
    5 YearsLine of credit (a)
    
    $
    3,445
    
    
    $
    
    
    
    $
    
    
    
    $
    3,445
    
    
    $
    Interest on line of credit (b)
    
    
    552
    
    
    
    214
    
    
    
    338
    
    
    
    
    
    
    
    Operating leases
    
    
    65
    
    
    
    46
    
    
    
    19
    
    
    
    
    
    
    
    Total contractual cash
commitments
    
    $
    4,062
    
    
    $
    260
    
    
    $
    357
    
    
    $
    3,445
    
    
    $
    
 
 (a)
    
    The amount listed reflects the balance outstanding as of December 31, 2007. Any
balance outstanding at July 31, 2010, is due at that time.(b)
    
    The interest rate assumed on the credit facility is 6.125% per annum, which was the
rate in effect at December 31, 2007. Our Current Credit Facility
   Access to Capital Markets
    Off-Balance Sheet Arrangements
   40




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##### Table of Contents



CONTRACTED VOLUMES
  Accounting for Derivative Instruments and Hedging Activities,
  RemainingContractual
    
    Daily
    
    
    
    
    
    FixedProperty
    
    Volume
    
    Production
    
    Term
    
    Price/McfCatalina
    
    
    517,000
    
    
    
    1,000
    
    
    
    06/07-05/09
    
    
    $
    5.47547,000
    
    
    
    1,000
    
    
    
    07/07-06/09
    
    
    $
    5.841,094,000
    
    
    
    2,000
    
    
    
    07/07-06/09
    
    
    $
    5.69670,000
    
    
    
    1,000
    
    
    
    11/07-10/09
    
    
    $
    5.66Atlantic Rim
    
    
    578,000
    
    
    
    1,000
    
    
    
    08/07-07/09
    
    
    $
    6.15Pinedale Anticline
    
    
    547,000
    
    
    
    1,000
    
    
    
    07/07-06/09
    
    
    $
    6.41Company Total
    
    
    3,953,000
   41




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##### Table of Contents



CRITICAL ACCOUNTING ESTIMATES
  Successful Efforts Method of Accounting
    Reserve Estimates
  42




---



##### Table of Contents



Impairment of Long-Lived Assets
     Asset Retirement Obligation
  Derivative instruments
 Accounting for Derivative Instruments and Hedging Activities,
  43




---



##### Table of Contents



Stock-based compensation
   Recently issued accounting pronouncements
      44




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risks
   Commodity Price Risks
  Risk policy and control
    Accounting for Derivative Instruments and Hedging Activities,
 45




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##### Table of Contents



Hedge positions
    Summary of derivative positions
 (amounts in thousands)
 Fair value of contracts outstanding at December 31, 2006
    
    $
    Decrease in value due to change in price
    
    
    Decrease in value due to new contracts entered into during the period
    
    
    (1,779
    )Gains realized during the period from existing and new contracts
    
    
    304Changes in fair value attributable to changes in valuation techniques
    
    
    Fair value of contracts outstanding at December 31, 2007
    
    $
    (1,475
    )
 (amounts in
thousands)
 Fair Value of Contracts at December 31, 2007Total Fair
    
    Maturing in
    
    Maturing in
    
    Maturing in
    
    MaturingValue
    
    2008
    
    2008-2009
    
    2010-2011
    
    Thereafter$(1,475)
    
    $
    (474
    )
    
    $
    (1,001
    )
    
    $
    
    
    
    $
    
 46




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Managements Annual Report on Internal Control Over Financial Reporting
  (i)
    
    pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company;(ii)
    
    provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and(iii)
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a material effect
on the financial statements.
  Internal
Control-Integrated Framework
   47




---



##### Table of Contents




    
    Redesign of the controls to include detailed steps and instruction on performance of
controls and procedures;
    
    Ensure employees who are performing controls understand responsibilities and how to
perform said responsibilities;
    
    Design and implement a detailed check list to be completed prior to approval of reserve
report and inclusion in any Company reports or filings.
    Changes in Internal Control Over Financial Reporting
   48




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal ControlIntegrated Framework
    Internal
ControlIntegrated Framework
   
 49




---



##### Table of Contents



ITEM 9B. OTHER INFORMATION
 .
 
 PART III
 Pursuant to instruction G(3) to Form 10-K, the following Items 10,11,12,13 and 14 are incorporated
by reference to the information provided in Double Eagles definitive proxy statement for the 2007
annual meeting of stockholders to be filed within 120 days from December 31, 2007.
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 ITEM 11. EXECUTIVE COMPENSATION
 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICE
 
 PART IV
 
 ITEM 15. EXHIBITS , FINANCIAL STATEMENT SCHEDULES
  Audit Report of Independent Registered Public Accounting Firm
    
    F1Consolidated Balance Sheets
    
    F2Consolidated Statements of Operations
    
    F3Consolidated Statements of Cash Flows
    
    F4Consolidated Statements of Stockholders Equity
    
    F5Notes to Consolidated Financial Statements
    
    F6
  Exhibits.
 Exhibit No.
    
    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).
 50




---



##### Table of Contents



Exhibit No.
    
    Description3.1(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).3.2(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)
    
    Debt Modification Agreement, effective August 1, 2006, including Commercial Loan
Agreement dated January 3, 2000, between Double Eagle Petroleum Co. and American National
Bank (filed as Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the quarter
ended June 30, 2006, and incorporated herein by reference).10.1(b)
    
    Debt Modification Agreement, effective July 1, 2007, between Double Eagle Petroleum Co.
and American National Bank (incorporated by reference from Exhibit 10.1 to the Companys
Current report on Form 8-K dated July 5, 2007).
 51




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##### Table of Contents



Exhibit No.
    
    Description10.1(c)
    
    Double Eagle Petroleum Co. 2007 Stock Incentive Plan, Form of Incentive Stock Option
Agreement and Form of Non-Qualified Stock Option Agreement (incorporated by reference from
Exhibit 10.1, 10.2 and 10.3 to the Companys Current report on Form 8-K dated May 29,
2007).14.1
    
    Code of Business Conduct and Ethics (filed as Exhibit 99.2 to the Companys Annual Report
on Form 10-KSB for the year ended December 31, 2004, and incorporated herein by reference).21.1*
    
    Subsidiaries of registrant.23.1*
    
    Consent of Hein & Associates LLP.23.2*
    
    Consent of Netherland, Sewell & Associates.31.1*
    
    Certification of Principal Executive Officer and Chief Financial Officer (Principal
Accounting Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32*
    
    Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed with this Form 10-K. 52




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##### Table of Contents



SIGNATURES
  DOUBLE EAGLE PETROLEUM CO.
 Date: 
  March 13, 2008
    /s/ Kurtis S. HooleyPrincipal Executive Officer  Date:  March 13, 2008
    /s/ Kurtis S. HooleyPrincipal Executive OfficerChief Financial Officer
(Principal Accounting Officer)Date:    March 13, 2008

/s/ Richard DoleRichard Dole, Chairman ElectDate:    March 13, 2008

/s/ Sigmund BalabanSigmund Balaban, DirectorDate:    March 13, 2008

/s/ Roy G. CoheeRoy G. Cohee, DirectorDate:    March 13, 2008

/s/ Stephen H. HollisStephen H. Hollis, Director 53




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBIC ACCOUNTING FIRM
 
    Internal ControlIntegrated
Framework
 Share Based
Payment
  
 F-1




---



##### Table of Contents



(Amounts in thousands of dollars except share and per share data)
 December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    125
    
    
    $
    611Cash held in escrow
    
    
    719
    
    
    
    707Accounts receivable, net
    
    
    3,664
    
    
    
    5,047Other current assets
    
    
    586
    
    
    
    809Total current assets
    
    
    5,094
    
    
    
    7,174Oil and gas properties and equipment, successful efforts method:Developed properties
    
    
    61,394
    
    
    
    53,677Wells in progress
    
    
    29,768
    
    
    
    13,839Gas transportation pipeline
    
    
    5,465
    
    
    
    5,412Undeveloped properties
    
    
    3,147
    
    
    
    3,313Corporate and other assets
    
    
    1,585
    
    
    
    1,024101,359
    
    
    
    77,265Less accumulated depreciation, depletion and amortization
    
    
    (24,785
    )
    
    
    (20,079
    )Net properties and equipment
    
    
    76,574
    
    
    
    57,186Deferred tax asset
    
    
    2,873
    
    
    
    Other assets
    
    
    56
    
    
    
    46TOTAL ASSETS
    
    $
    84,597
    
    
    $
    64,406LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    8,584
    
    
    $
    7,964Accrued expenses
    
    
    2,079
    
    
    
    5,125Liabilities from price risk management
    
    
    474
    
    
    
    Accrued production taxes
    
    
    969
    
    
    
    1,091Total current liabilities
    
    
    12,106
    
    
    
    14,180Line of credit
    
    
    3,445
    
    
    
    13,221Asset retirement obligation
    
    
    1,449
    
    
    
    694Liabilities from price risk management
    
    
    1,001
    
    
    
    Deferred tax liability
    
    
    
    
    
    
    3,269Total liabilities
    
    
    18,001
    
    
    
    31,364Commitments
and contingencies (Note 4 and 5)Preferred stock, $0.10 par value; 10,000,000 shares authorized;
1,610,000 and 0 shares issued and outstanding as of
December 31, 2007 and 2006, respectively
(liquidation preference of $25.00 per share)
    
    
    37,972
    
    
    
    Stockholders equity:Common stock, $0.10 par value; 50,000,000 shares authorized;
9,148,105 and 8,641,104 shares issued and outstanding as
of
December 31, 2007 and 2006, respectively
    
    
    915
    
    
    
    864Additional paid-in capital
    
    
    33,670
    
    
    
    23,251Retained earnings (deficit)
    
    
    (4,486
    )
    
    
    8,927Accumulated other comprehensive income
    
    
    (1,475
    )
    
    
    Total stockholders equity
    
    
    28,624
    
    
    
    33,042TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    84,597
    
    
    $
    64,406
  F-2




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##### Table of Contents



(Amounts in thousands of dollars except share and per share data)
 Year ended December 31,2007
    
    
    2006
    
    
    2005RevenuesOil and gas sales
    
    $
    15,740
    
    
    $
    18,228
    
    
    $
    20,451Transportation revenue
    
    
    910
    
    
    
    523
    
    
    
    Price risk
management activities
    
    
    304
    
    
    
    
    
    
    
    Other income
    
    
    243
    
    
    
    281
    
    
    
    45Total revenues
    
    
    17,197
    
    
    
    19,032
    
    
    
    20,496Costs and expensesProduction costs
    
    
    6,341
    
    
    
    3,730
    
    
    
    3,800Production taxes
    
    
    1,933
    
    
    
    2,209
    
    
    
    2,523Exploration expenses including dry hole costs
    
    
    15,399
    
    
    
    530
    
    
    
    747Impairment of equipment and properties
    
    
    2,232
    
    
    
    
    
    
    
    357General and administrative
    
    
    4,133
    
    
    
    3,959
    
    
    
    3,015Depreciation, depletion and amortization
    
    
    5,068
    
    
    
    4,909
    
    
    
    4,069Total costs and expenses
    
    
    35,106
    
    
    
    15,337
    
    
    
    14,511Income (loss) from operations
    
    
    (17,909
    )
    
    
    3,695
    
    
    
    5,985Interest (expense) income, net
    
    
    163
    
    
    
    (187
    )
    
    
    23Income (loss) before income taxes
    
    
    (17,746
    )
    
    
    3,508
    
    
    
    6,008Provision for deferred income taxes
    
    
    6,143
    
    
    
    (1,399
    )
    
    
    (2,043
    )NET INCOME (LOSS)
    
    $
    (11,603
    )
    
    $
    2,109
    
    
    $
    3,965Preferred
stock dividends
    
    
    (1,810
    )
    
    
    
    
    
    
    Net income (loss) attributable to common stock
    
    $
    (13,413
    )
    
    $
    2,109
    
    
    $
    3,965Net income (loss) per common share:Basic
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46Diluted
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46Weighted average shares outstanding:Basic
    
    
    9,114,622
    
    
    
    8,632,567
    
    
    
    8,564,228Diluted
    
    
    9,114,622
    
    
    
    8,655,587
    
    
    
    8,628,476
  F-3




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##### Table of Contents



(Amounts in thousands of dollars)
 Year ended December 31,2007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net income (loss)
    
    $
    (11,603
    )
    
    $
    2,109
    
    
    $
    3,965Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation, depletion, amortization and accretion of
asset retirement obligation
    
    
    5,062
    
    
    
    4,909
    
    
    
    4,088Abandonment of non-producing properties and leases
    
    
    14,941
    
    
    
    20
    
    
    
    106Bad Debt Expense
    
    
    559
    
    
    
    
    
    
    
    Impairment of equipment and properties
    
    
    2,234
    
    
    
    
    
    
    
    357Provision for deferred taxes
    
    
    (6,143
    )
    
    
    1,399
    
    
    
    2,043Directors fees paid in stock
    
    
    90
    
    
    
    97
    
    
    
    160Non-cash employee stock option expense
    
    
    362
    
    
    
    460
    
    
    
    26Gain on sale of working interest in non-producing property
    
    
    (98
    )
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    7Changes in current assets and liabilities:Increase in deposit held in escrow
    
    
    (12
    )
    
    
    (707
    )
    
    
    Decrease (Increase) in accounts receivable
    
    
    824
    
    
    
    (799
    )
    
    
    (2,076
    )Decrease (Increase) in other current assets
    
    
    223
    
    
    
    (591
    )
    
    
    111Increase (Decrease) in accounts payable
    
    
    (1,890
    )
    
    
    4,118
    
    
    
    (938
    )Increase (Decrease) in accrued expenses
    
    
    739
    
    
    
    502
    
    
    
    1,785Increase (Decrease) in accrued production taxes
    
    
    (122
    )
    
    
    (566
    )
    
    
    685NET CASH
PROVIDED BY OPERATING ACTIVITIES
    
    
    5,166
    
    
    
    10,951
    
    
    
    10,319Cash flows from investing activities:Additions of producing properties and equipment
    
    
    (42,307
    )
    
    
    (21,861
    )
    
    
    (16,248
    )Additions of corporate and non-producing properties
    
    
    7
    
    
    
    (390
    )
    
    
    (567
    )Proceeds from sales of properties and assets
    
    
    244
    
    
    
    
    
    
    
    571(Additions) reductions of other assets
    
    
    
    
    
    
    10
    
    
    
    (15
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (42,056
    )
    
    
    (22,241
    )
    
    
    (16,259
    )Cash flows from financing activities:Net proceeds from sale of common stock
    
    
    9,990
    
    
    
    
    
    
    
    Net proceeds from sale of preferred stock
    
    
    37,972
    
    
    
    
    
    
    
    Dividends paid on preferred stock
    
    
    (1,810
    )
    
    
    
    
    
    
    Net payments on line of credit
    
    
    (9,776
    )
    
    
    10,221
    
    
    
    3,000Exercise of options
    
    
    28
    
    
    
    353
    
    
    
    701Settlement of options
    
    
    
    
    
    
    (104
    )
    
    
    NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    36,404
    
    
    
    10,470
    
    
    
    3,701Change in cash and cash equivalents
    
    
    (486
    )
    
    
    (820
    )
    
    
    (2,239
    )Cash and cash equivalents at beginning of period
    
    
    611
    
    
    
    1,431
    
    
    
    3,670CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    125
    
    
    $
    611
    
    
    $
    1,431Supplemental disclosure of cash and non-cash transactions:Cash paid for interest
    
    $
    426
    
    
    $
    490
    
    
    $
    57Interest capitalized
    
    $
    279
    
    
    $
    293
    
    
    $
    43Additions to developed properties included in current liabilities
    
    $
    4,908
    
    
    $
    6,183
    
    
    $
    4,758Additions to developed properties for retirement obligations
    
    $
    757
    
    
    $
    171
    
    
    $
    87
  F-4




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##### Table of Contents



(Amounts in thousands of dollars except share data)
 AccumulatedShares of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    
    
    
    
    Additional Paid-
    
    
    Retained
    
    
    Comprehensive
    
    
    StockholdersOutstanding
    
    
    Common Stock
    
    
    In Capital
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance at
January 1, 2005
    
    
    8,488,404
    
    
    $
    849
    
    
    $
    21,225
    
    
    $
    2,853
    
    
    $
    
    
    
    $
    24,927Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,965
    
    
    
    
    
    
    
    3,965Stock options exercised
and shares issued for compensation
    
    
    102,200
    
    
    
    10
    
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    886Balance at
December 31, 2005
    
    
    8,590,604
    
    
    $
    859
    
    
    $
    22,101
    
    
    $
    6,818
    
    
    $
    
    
    
    $
    29,778Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,109
    
    
    
    
    
    
    
    2,109Stock options exercised
    
    
    44,500
    
    
    
    4
    
    
    
    349
    
    
    
    
    
    
    
    
    
    
    
    353Shares issued and expense
recognized for stock-based compensation
    
    
    6,000
    
    
    
    1
    
    
    
    801
    
    
    
    
    
    
    
    
    
    
    
    802Balance at
December 31, 2006
    
    
    8,641,104
    
    
    $
    864
    
    
    $
    23,251
    
    
    $
    8,927
    
    
    $
    
    
    
    $
    33,042Comprehensive income (loss)Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,603
    )
    
    
    
    
    
    
    (11,603
    )Change in derivative instrument fair value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,475
    )
    
    
    (1,475
    )Total Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,078
    )Stock options exercised
    
    
    2,000
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    27Compensation expense from
common stock options
    
    
    
    
    
    
    
    
    
    
    362
    
    
    
    
    
    
    
    
    
    
    
    362Directors fees paid in stock
    
    
    5,001
    
    
    
    1
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    91Sale of common stock
    
    
    500,000
    
    
    
    50
    
    
    
    9,940
    
    
    
    
    
    
    
    
    
    
    
    9,990Dividends declared & paid
on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,810
    )
    
    
    
    
    
    
    (1,810
    )Balance at
December 31, 2007
    
    
    9,148,105
    
    
    $
    915
    
    
    $
    33,670
    
    
    $
    (4,486
    )
    
    $
    (1,475
    )
    
    $
    28,624
  F-5




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##### Table of Contents



DOUBLE EAGLE PETROLEUM CO.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 (Amounts in thousands of dollars except share and per share data)
 1.
    
    Business Description and Summary of Significant Accounting Policies
 Description of Operations and Basis of Presentation
     Cash and Cash Equivalents
  Accounts Receivable
  Use of Estimates in the Preparation of Financial Statements
  Concentration of Credit Risk
   F-6




---



##### Table of Contents



Revenue Recognition and Gas Balancing
  Oil and Gas Producing Activities
      (amounts in thousands).
 2007
    
    
    2006
    
    
    2005Beginning balance at January 1,
    
    $
    11,541
    
    
    $
    2,972
    
    
    $
    Additions to
capitalized exploratory well costs pending the determination of proved reserves
    
    
    5,727
    
    
    
    11,203
    
    
    
    2,972Reclassifications
to wells, facilities and equipment based  on the determination of proved reserves
    
    
    (1,666
    )
    
    
    (2,356
    )
    
    
    Capitalized exploratory well costs charged to expense
    
    
    (14,910
    )
    
    
    (278
    )
    
    
    Ending balance at December 31,
    
    $
    692
    
    
    $
    11,541
    
    
    $
    2,972
 F-7




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##### Table of Contents



Capitalized exploratory well costs that have been
capitalized for a period of one year or less
    
    $
    692Capitalized exploratory well costs that have been
capitalized for a period greater than one year
    
    
    Balance at December 31, 2007
    
    $
    692Number of projects that have exploratory well costs that
have been capitalized for a period greater than one year
    
    
    0
  Asset Retirement Obligations
    For the year ended December 31,2007
    
    
    2006Beginning asset retirement obligation
    
    $
    694
    
    
    $
    513Liabilities incurred
    
    
    655
    
    
    
    87Liabilities settled
    
    
    (9
    )
    
    
    (4
    )Accretion expense
    
    
    25
    
    
    
    15Revision to estimated cash flows
    
    
    84
    
    
    
    83Ending asset retirement obligation
    
    $
    1,449
    
    
    $
    694
 Impairment of Long-Lived Assets
  F-8




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##### Table of Contents



Corporate and Other Assets
  Major Customers
  Industry Segment and Geographic Information
  Employee Benefit Plan
  Income Taxes
  Earnings Per Share
  F-9




---



##### Table of Contents



For the year ended December 31,2007
    
    
    2006
    
    
    2005Net income (loss)
    
    $
    (11,603
    )
    
    $
    2,109
    
    
    $
    3,965Preferred stock dividends
    
    
    (1,810
    )
    
    
    
    
    
    
    Income (loss) attributable to common stock
    
    $
    (13,413
    )
    
    $
    2,109
    
    
    $
    3,965Weighted average shares:Weighted average shares  basic
    
    
    9,114,622
    
    
    
    8,632,567
    
    
    
    8,564,228Dilutive effect of stock options outstanding at
the end of period
    
    
    
    
    
    
    23,020
    
    
    
    64,248Weighted average shares  fully diluted
    
    
    9,114,622
    
    
    
    8,655,587
    
    
    
    8,628,476Earnings (loss) per share:Basic
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46Diluted
    
    $
    (1.47
    )
    
    $
    0.24
    
    
    $
    0.46
  For the years ended December 31,2007
    
    
    2006
    
    
    2005Options to purchase common stock
    
    
    6,643
    
    
    
    18,621
    
    
    
    
 Stock Based Compensation
   F-10




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##### Table of Contents



For the year endedDecember 31,2005Net income, as reported
    
    $
    3,965Add: Share-based employee compensation
expense included in reported net income
    
    
    26Deduct: Total share-based employee
compensation expense determined under the
fair value based method for all awards
    
    
    (686
    )Pro forma net income
    
    $
    3,305Basic Earnings Per Share:As reported
    
    $
    0.46Pro forma
    
    $
    0.39Diluted Earnings Per Share:As reported
    
    $
    0.46Pro forma
    
    $
    0.38
  Shareholder Rights Plan
    Fair Value of Financial Instruments
  F-11




---



##### Table of Contents



Other comprehensive income
   New accounting pronouncements
     Subsequent Event
  2.
    
    Line of Credit
  F-12




---



##### Table of Contents



3.
    
    Income Taxes
  For the year ended December 31,2007
    
    
    2006
    
    
    2005Current taxes
    
    $
    
    
    
    $
    
    
    
    $
    Deferred taxes
    
    
    (6,143
    )
    
    
    1,399
    
    
    
    2,043Total income tax expense
    
    $
    (6,143
    )
    
    $
    1,399
    
    
    $
    2,043
  As of December 31,2007
    
    
    2006Deferred tax assets:Net operating loss carry-forward
    
    $
    10,885
    
    
    $
    3,671Accrued compensation
    
    
    
    
    
    
    68Allowance for doubtful accounts
    
    
    198
    
    
    
    153Asset retirement obligation
    
    
    272
    
    
    
    24711,355
    
    
    
    4,139Deferred tax liabilities:Net gas imbalance receivable
    
    
    (192
    )
    
    
    (265
    )Net basis difference in oil and gas properties
    
    
    (8,275
    )
    
    
    (7,143
    )Net deferred tax asset (liability)
    
    $
    2,888
    
    
    $
    (3,269
    )
  F-13




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##### Table of Contents



For the year ended December 31,2007
    
    2006Expected federal tax rate
    
    
    35.00
    %
    
    
    35.00
    %Effect of non-deductibility of SFAS 123(R)
Incentive Stock Option Expense and
other permanent differences
    
    
    -0.74
    %
    
    
    4.37
    %State tax rate and other
    
    
    0.36
    %
    
    
    0.52
    %Effective tax rate
    
    
    34.62
    %
    
    
    39.89
    %
   4.
    
    Commitments and Contingencies
 Gas Sales Commitments
  RemainingContractual
    
    Daily
    
    
    
    
    
    FixedProperty
    
    Volume
    
    Production
    
    Term
    
    Price/McfCatalina
    
    
    517,000
    
    
    
    1,000
    
    
    
    06/07-05/09
    
    
    $
    5.47547,000
    
    
    
    1,000
    
    
    
    07/07-06/09
    
    
    $
    5.841,094,000
    
    
    
    2,000
    
    
    
    07/07-06/09
    
    
    $
    5.69670,000
    
    
    
    1,000
    
    
    
    11/07-10/09
    
    
    $
    5.66Atlantic Rim
    
    
    578,000
    
    
    
    1,000
    
    
    
    08/07-07/09
    
    
    $
    6.15Pinedale Anticline
    
    
    547,000
    
    
    
    1,000
    
    
    
    07/07-06/09
    
    
    $
    6.41Company Total
    
    
    3,953,000
 F-14




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##### Table of Contents



Lease Commitments
  Year ending
    
    LeaseDecember 31,
    
    commitments2008
    
    $
    362009
    
    
    102010
    
    
    102011
    
    
    92012
    
    
    9Thereafter
    
    
    Total
    
    $
    74
 Contingencies
   5.
    
    Commodity Risk Management
 Risk policy and control
    F-15




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##### Table of Contents



Accounting for Derivative Instruments and Hedging Activities,
 
 Hedge positions
    6.
    
    Series A Cumulative Preferred Stock
     Redemption
Date on or Before
    
    Redemption PriceJune 30, 2008
    
    $
    26.00June 30, 2009
    
    $
    25.75June 30, 2010
    
    $
    25.50June 30, 2011
    
    $
    25.25June 30, 2012 or thereafter
    
    $
    25.00
  7.
    
    Compensation Plans
    F-16




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##### Table of Contents



For the year ended December 31,2007
    
    2006
    
    2005Weighted-average volatility
    
    
    42
    %
    
    
    40% - 44
    %
    
    
    42
    %Expected dividends
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Expected term (in years)
    
    
    4.25
    
    
    
    2 - 4
    
    
    
    5Risk-free rate
    
    
    4.58
    %
    
    
    4.68% - 5.10
    %
    
    
    3.50
    %Expected forfeiture rate
    
    
    7.00
    %
    
    
    5% - 10
    %
    
    
    0.00
    %
 F-17




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##### Table of Contents



Weighted-AverageWeighted-
    
    
    RemainingAverage Exercise
    
    
    Contractual Term
    
    
    AggregateOptions:
    
    Shares
    
    
    Price
    
    
    (in years)
    
    
    Intrinsic ValueOutstanding at January 1, 2007
    
    
    325,500
    
    
    $
    17.64
    
    
    
    3.8Granted
    
    
    15,000
    
    
    $
    17.86Exercised
    
    
    (2,000
    )
    
    $
    13.56Cancelled/expired
    
    
    (75,000
    )
    
    $
    17.55Outstanding at December 31, 2007
    
    
    263,500
    
    
    $
    17.71
    
    
    
    3.4
    
    
    $
    4,668Exerciseable
at December 31, 2007
    
    
    133,700
    
    
    $
    16.87
    
    
    
    2.6
    
    
    $
    2,255Outstanding at January 1, 2006
    
    
    354,243
    
    
    $
    15.38
    
    
    
    3.5Granted
    
    
    112,500
    
    
    $
    19.53Exercised
    
    
    (44,500
    )
    
    $
    7.92Cancelled/expired
    
    
    (96,743
    )
    
    $
    16.39Outstanding at December 31, 2006
    
    
    325,500
    
    
    $
    17.64
    
    
    
    3.8
    
    
    $
    2,248Exerciseable
at December 31, 2006
    
    
    101,700
    
    
    $
    16.46
    
    
    
    2.8
    
    
    $
    823Outstanding at January 1, 2005
    
    
    275,843
    
    
    $
    14.32
    
    
    
    2.5Granted
    
    
    249,500
    
    
    $
    18.43Exercised
    
    
    (93,600
    )
    
    $
    7.52Cancelled/expired
    
    
    (77,500
    )
    
    $
    17.00Outstanding at December 31, 2005
    
    
    354,243
    
    
    $
    15.38
    
    
    
    3.5
    
    
    $
    1,807Exerciseable
at December 31, 2005
    
    
    202,743
    
    
    $
    13.48
    
    
    
    2.2
    
    
    $
    919
  F-18




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##### Table of Contents



Options
    
    
    
    
    
    Options ExerciseableOutstandingWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedNumber of
    
    Remaining
    
    Average
    
    Number of
    
    AverageRange of Exercise
    
    Options
    
    Contractual Life
    
    Exercise Price
    
    Options
    
    Exercise PricePrices per Share
    
    Outstanding
    
    (in years)
    
    per Share
    
    Exerciseable
    
    per Share$14.00 - $ 16.60
    
    
    105,000
    
    
    
    3.7
    
    
    $
    14.44
    
    
    
    71,000
    
    
    $
    14.65$17.86 - $ 19.55
    
    
    107,500
    
    
    
    2.8
    
    
    $
    18.74
    
    
    
    51,700
    
    
    $
    18.79$20.21 - $ 23.61
    
    
    51,000
    
    
    
    4.2
    
    
    $
    22.30
    
    
    
    11,000
    
    
    $
    22.14263,500
    
    
    
    3.4
    
    
    $
    17.71
    
    
    
    133,700
    
    
    $
    16.87
 8.
    
    Supplemental Information on Oil and Gas Producing Activities
 Capitalized Costs Relating to Oil and Gas Producing Activities
  As of December 31,2007
    
    
    2006
    
    
    2005Developed properties
    
    $
    61,394
    
    
    $
    53,677
    
    
    $
    41,146Undeveloped properties
    
    
    3,147
    
    
    
    3,313
    
    
    
    3,21364,541
    
    
    
    56,990
    
    
    
    44,359Accumulated depletion
and amortization
    
    
    (22,218
    )
    
    
    (19,442
    )
    
    
    (14,854
    )Net capitalized costs
    
    $
    42,323
    
    
    $
    37,548
    
    
    $
    29,505
 Costs incurred in Oil and Gas Property Acquisitions, Exploration and Development Activities
  For the year ended December 31,2007
    
    
    2006
    
    
    2005Property acquisitions  unproved
    
    $
    316
    
    
    $
    100
    
    
    $
    407Exploration
    
    
    3,600
    
    
    
    11,304
    
    
    
    3,693Development
    
    
    41,337
    
    
    
    10,046
    
    
    
    14,873Total
    
    $
    45,253
    
    
    $
    21,450
    
    
    $
    18,973
 F-19




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##### Table of Contents



Results of Operations from Oil and Gas Producing Activities
  For the year ended December 31,2007
    
    
    2006
    
    
    2005Operating revenues
    
    $
    16,044
    
    
    $
    18,228
    
    
    $
    20,451Costs and expenses:Production
    
    
    8,274
    
    
    
    5,769
    
    
    
    6,323Exploration
    
    
    15,399
    
    
    
    530
    
    
    
    747Depletion, amortization and impairment
    
    
    6,691
    
    
    
    4,163
    
    
    
    3,939Total costs and expenses
    
    
    30,364
    
    
    
    10,462
    
    
    
    11,009Income (loss) before income taxes
    
    $
    (14,320
    )
    
    $
    7,766
    
    
    $
    9,442
 Oil and Gas Reserves (Unaudited)
   For the year ended December 31,2007
    
    2006
    
    2005Oil
    
    Gas
    
    Oil
    
    Gas
    
    Oil
    
    Gas(Bbl)
    
    (Mcf)
    
    (Bbl)
    
    (Mcf)
    
    (Bbl)
    
    (Mcf)Beginning of year
    
    
    360,165
    
    
    
    48,496,719
    
    
    
    328,752
    
    
    
    47,234,335
    
    
    
    278,055
    
    
    
    34,934,746Revisions of estimates
    
    
    (112,093
    )
    
    
    (18,449,972
    )
    
    
    41,546
    
    
    
    (5,976,392
    )
    
    
    7,451
    
    
    
    (198,036
    )Extensions and discoveries
    
    
    178,208
    
    
    
    44,135,456
    
    
    
    2,596
    
    
    
    10,379,429
    
    
    
    58,716
    
    
    
    15,473,719Sales of reserves in place
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Production
    
    
    (13,468
    )
    
    
    (2,928,338
    )
    
    
    (12,729
    )
    
    
    (3,140,653
    )
    
    
    (15,470
    )
    
    
    (2,976,094
    )End of year
    
    
    412,812
    
    
    
    71,253,865
    
    
    
    360,165
    
    
    
    48,496,719
    
    
    
    328,752
    
    
    
    47,234,335Proved developed reserves
    
    
    253,478
    
    
    
    44,782,553
    
    
    
    254,346
    
    
    
    30,075,467
    
    
    
    199,931
    
    
    
    23,032,277Percentage of proved
developed reserves
    
    
    61
    %
    
    
    63
    %
    
    
    71
    %
    
    
    62
    %
    
    
    61
    %
    
    
    49
    %
  Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves
(Unaudited)
  F-20




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##### Table of Contents



As of December 31,2007
    
    
    2006
    
    
    2005Future cash inflows
    
    $
    462,655
    
    
    $
    246,270
    
    
    $
    400,671Future production costs
    
    
    (102,515
    )
    
    
    (65,650
    )
    
    
    (112,025
    )Future development costs
    
    
    (23,651
    )
    
    
    (17,049
    )
    
    
    (19,168
    )Future income taxes
    
    
    (96,370
    )
    
    
    (42,578
    )
    
    
    (74,738
    )Future net cash flows
    
    
    240,119
    
    
    
    120,993
    
    
    
    194,74010% annual discount
    
    
    (109,820
    )
    
    
    (70,960
    )
    
    
    (103,447
    )Standardized measure of
discounted future net cash flows
    
    $
    130,299
    
    
    $
    50,033
    
    
    $
    91,293
  2007
    
    
    2006
    
    
    2005Standard measure, as of January 1,
    
    $
    50,033
    
    
    $
    91,293
    
    
    $
    51,530Sales of oil and gas produced, net of production costs
    
    
    (8,416
    )
    
    
    (12,460
    )
    
    
    (14,128
    )Extensions and discoveries
    
    
    118,002
    
    
    
    14,724
    
    
    
    43,610Net change
in prices and production costs related to future production
    
    
    41,821
    
    
    
    (44,698
    )
    
    
    34,004Development costs incurred during the year
    
    
    9,924
    
    
    
    3,147
    
    
    
    1,290Changes in estimated future development costs
    
    
    (24,107
    )
    
    
    (10,632
    )
    
    
    (9,816
    )Sales of reserves in place
    
    
    
    
    
    
    
    
    
    
    Revisions of quantity estimates
    
    
    (50,750
    )
    
    
    (7,749
    )
    
    
    (384
    )Accretion of discount
    
    
    6,764
    
    
    
    14,315
    
    
    
    6,386Net change in income taxes
    
    
    (18,064
    )
    
    
    13,299
    
    
    
    (22,186
    )Changes in timing and other
    
    
    5,092
    
    
    
    (11,206
    )
    
    
    987Aggregate Change
    
    
    80,266
    
    
    
    (41,260
    )
    
    
    39,763Standardized measure, as of December 31,
    
    $
    130,299
    
    
    $
    50,033
    
    
    $
    91,293
 F-21




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##### Table of Contents



Quarterly Financial Data (Unaudited)
  Fourth
    
    
    
    
    
    SecondQuarter
    
    Third Quarter
    
    Quarter
    
    First QuarterYear ended December 31, 2007Oil and gas sales
    
    $
    4,232
    
    
    $
    3,779
    
    
    $
    3,417
    
    
    $
    4,616Income (loss) from operations
    
    $
    (10,277
    )
    
    $
    (7,197
    )
    
    $
    (995
    )
    
    $
    560Net income (loss)
    
    $
    (6,539
    )
    
    $
    (4,792
    )
    
    $
    (507
    )
    
    $
    235Net income (loss) attributable to common
stock
    
    $
    (7,470
    )
    
    $
    (5,671
    )
    
    $
    (507
    )
    
    $
    235Basic net income (loss) per common share
    
    $
    (0.82
    )
    
    $
    (0.62
    )
    
    $
    (0.06
    )
    
    $
    0.03Fully diluted net income (loss) per
common share
    
    $
    (0.82
    )
    
    $
    (0.62
    )
    
    $
    (0.06
    )
    
    $
    0.03Year ended December 31, 2006Oil and gas sales
    
    $
    5,420
    
    
    $
    4,163
    
    
    $
    4,052
    
    
    $
    4,593Income from operations
    
    $
    1,409
    
    
    $
    526
    
    
    $
    449
    
    
    $
    1,311Net income
    
    $
    666
    
    
    $
    341
    
    
    $
    264
    
    
    $
    838Net income (loss) attributable to common
stock
    
    $
    666
    
    
    $
    341
    
    
    $
    264
    
    
    $
    838Basic net income per common share
    
    $
    0.07
    
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.10Fully diluted net income per common share
    
    $
    0.07
    
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.10
  F-22




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##### Table of Contents



EXHIBIT
INDEX
 Exhibit No.
    
    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).3.2(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)
    
    Debt Modification Agreement, effective August 1, 2006, including Commercial Loan Agreement dated
January 3, 2000, between Double Eagle Petroleum Co. and American National Bank (filed as Exhibit
10.1 to the Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, and
incorporated herein by reference).10.1(b)
    
    Debt Modification Agreement, effective July 1, 2007, between Double Eagle Petroleum Co. and
American National Bank (incorporated by reference from Exhibit 10.1 to the Companys Current report
on Form 8-K dated July 5, 2007).




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##### Table of Contents



Exhibit No.
    
    Description10.1(c)
    
    Double Eagle Petroleum Co. 2007 Stock Incentive Plan, Form of Incentive Stock Option Agreement and
Form of Non-Qualified Stock Option Agreement (incorporated by reference from Exhibit 10.1, 10.2 and
10.3 to the Companys Current report on
Form 8-K dated May 29, 2007).14.1
    
    Code of Business Conduct and Ethics (filed as Exhibit 99.2 to the Companys Annual Report on Form
10-KSB for the year ended December 31, 2004, and incorporated herein by reference).21.1*
    
    Subsidiaries of registrant.23.1*
    
    Consent of Hein & Associates LLP.23.2*
    
    Consent of Netherland, Sewell & Associates.31.1*
    
    Certification of Principal Executive Officer and Chief Financial Officer (Principal Accounting Officer)
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32*
    
    Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed with this Form 10-K.