Exhibit
    99.6
  FINANCIAL
    STATEMENTS AND NOTES FOR NFR ENERGY LLC.
  CONSOLIDATED
    FINANCIAL STATEMENTS
 NFR
    ENERGY LLC
   1




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Report of Independent Registered Public
    Accounting Firm


3Report of Independent Auditors
    (Predecessor)


4Audited Consolidated Financial StatementsConsolidated Balance Sheets


5Consolidated Statement of Operations


6Consolidated Statement of Members
    Capital


7Consolidated Statement of Cash Flows


8Notes to Consolidated Financial Statements


9-27Supplemental Oil and Gas Disclosures
    (Unaudited)


28-32   2




---



##### 



Report of
    Independent Registered Public Accounting Firm        
    3




---



##### 



Report of
    Independent Auditors          
    4




---



##### 



CONSOLIDATED
    FINANCIAL STATEMENTS
    NFR ENERGY LLCCONSOLIDATED BALANCE SHEETSAS OF DECEMBER 31, 2010 AND
    2009
  December 31,


December 31,2010


2009(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
4,437


$
2,489Accounts receivable, net


16,016



21,321Prepaid expenses and other current assets


11,010



28,181Derivative instruments


40,749



32,288Total current assets


72,212



84,279Property, plant and equipment:Oil and gas properties (full cost method)Proved


1,506,565



1,177,439Unproved


218,172



178,625Gas gathering and processing equipment


40,195



39,949Office furniture and fixtures


6,325



5,9001,771,257



1,401,913Accumulated depletion, depreciation and amortization


(934,682
)


(882,192
)Total property, plant and equipment, net


836,575



519,721Other assets:Derivative instruments


68,272



28,683Deferred financing costs


13,024



3,666Total other assets


81,296



32,349Total assets

$
990,083


$
636,349LIABILITIES AND MEMBERS CAPITALCurrent liabilities:Accounts payable  trade

$
4,160


$
13,916Accounts payable  related party


16,058



1,572Royalties payable


4,904



7,850Accrued interest payable


13,078



1,399Accrued exploration and development


48,112



36,647Accrued operating expenses and other


17,776



13,789Derivative instruments






198Total current liabilities


104,088



75,371Long term liabilities:Revolving credit facility


94,000



214,500Second lien term loan






50,000Senior notes


346,153



Asset retirement obligation


9,213



8,155Derivative instruments






509Other long term obligations


891



1,212Total long term liabilities


450,257



274,376Commitments and contingenciesMembers capital:Members capital


1,065,176



1,005,600Amounts receivable from member(s)


(143
)


(351
)Accumulated deficit


(738,052
)


(776,821
)Accumulated other comprehensive income


105,722



55,399Total controlling interests members capital


432,703



283,827Noncontrolling interests


3,035



2,775Total members capital


435,738



286,602Total liabilities and members capital

$
990,083


$
636,349    5




---



##### 



CONSOLIDATED
    FINANCIAL STATEMENTS
    NFR ENERGY LLCCONSOLIDATED STATEMENTS OF
    OPERATIONSFOR THE YEARS ENDED DECEMBER 31, 2010,
    2009 AND 2008
  For the Year Ended December 31,2010


2009


2008(In thousands)RevenuesOil and natural gas sales

$
130,123


$
81,937


$
96,015Gain (loss) on derivative instruments


51,104



60,686



(2,266
)Other revenue


1,390



957



592Total revenues


182,617



143,580



94,341Operating expensesLease operating expenses


18,982



18,520



13,537Workover expenses


848



482



843Marketing, gathering, transportation and other


11,792



6,031



3,107Production and ad valorem taxes


5,483



4,228



5,364General and administrative expenses


20,259



17,395



14,501Depletion, depreciation and amortization


52,490



44,813



34,299Accretion expense


493



407



215Bad debt expense


18



93



Impairments


1,711



407,294



415,843Total operating expenses


112,076



499,263



487,709Other income (expenses)Interest expense


(33,468
)


(9,392
)


(7,115
)Gain (loss) on derivative instruments


2,547



3,793



(1,355
)Gain on bargain purchase


372







Other income (loss)


(963
)


(8,478
)


349Total other expenses


(31,512
)


(14,077
)


(8,121
)Net income (loss) including noncontrolling interests


39,029



(369,760
)


(401,489
)Less: Net income applicable to noncontrolling interests


(260
)


(516
)


(191
)Net income (loss) applicable to controlling interests

$
38,769


$
(370,276
)

$
(401,680
)    6




---



##### 



CONSOLIDATED
    FINANCIAL STATEMENTS
    NFR ENERGY LLCCONSOLIDATED STATEMENT OF
    MEMBERS CAPITALFOR THE YEARS ENDED DECEMBER 31, 2010,
    2009 AND 2008
  AccumulatedAmounts





OtherComprehensive


Members Capital


Receivable from


Accumulated


Comprehensive


Noncontrolling


Total MembersIncome


Units


Value


Member


Deficit


Income


Interests


Capital(In thousands)Balance as of December 31, 2007






487


$
486,741


$



$
(4,865
)

$



$



$
481,876Members contributions






368



368,017



















368,017Amounts receivable from members














(272
)














(272
)Acquisition of noncontrolling interests


























2,543



2,543Distributions to members for state tax withholding










(614
)


















(614
)Comprehensive lossNet loss applicable to controlling interests

$
(401,680
)














(401,680
)










(401,680
)Unrealized gain on derivative instruments


40,919



















40,919







40,919Comprehensive loss applicable to controlling interests


(360,761
)Net income applicable to noncontrolling interests


191























191



191Comprehensive loss including noncontrolling interests

$
(360,570
)


























Balance as of December 31, 2008






855


$
854,144


$
(272
)

$
(406,545
)

$
40,919


$
2,734


$
490,980Members contributions






152



151,831



















151,831Amounts receivable from members














(79
)














(79
)Distributions  noncontrolling interests


























(475
)


(475
)Distributions to members for state tax withholding










(375
)


















(375
)Comprehensive lossNet loss applicable to controlling interests

$
(370,276
)














(370,276
)










(370,276
)Unrealized gain on derivative instruments


14,480



















14,480







14,480Comprehensive loss applicable to controlling interests


(355,796
)Net income applicable to noncontrolling interests


516























516



516Comprehensive loss including noncontrolling interests

$
(355,280
)Balance as of December 31, 2009






1,007


$
1,005,600


$
(351
)

$
(776,821
)

$
55,399


$
2,775


$
286,602Members contributions






60



60,000



















60,000Amounts receivable from member














208















208Distributions to member for state tax withholding










(424
)


















(424
)Comprehensive incomeNet income applicable to controlling interests

$
38,769















38,769











38,769Unrealized gain on derivative instruments


50,323



















50,323







50,323Comprehensive income applicable to controlling interests


89,092Net income applicable to noncontrolling interests


260























260



260Comprehensive income including noncontrolling interests

$
89,352Balance as of December 31, 2010






1,067


$
1,065,176


$
(143
)

$
(738,052
)

$
105,722


$
3,035


$
435,738    7




---



##### 



CONSOLIDATED
    FINANCIAL STATEMENTS
    NFR ENERGY LLCCONSOLIDATED STATEMENT OF CASH
    FLOWSFOR THE YEARS ENDED DECEMBER 31, 2010,
    2009 AND 2008
  For the Year Ended December 31,2010


2009


2008(In thousands)Cash flows from operating activities:Net income (loss), including noncontrolling interest

$
39,029


$
(369,760
)

$
(401,489
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depletion, depreciation and amortization


52,490



44,813



34,299Impairments


1,711



407,294



415,843Loss on sale of asset


1,138



8,569



Bad debt expense


18



93



Accretion expense


493



407



215Accrued interest expense


11,953



(142
)


Rent expense and amortization of deferred rent


(321
)


120



Amortization of deferred financing costs


4,325



1,083



346(Gain) loss on derivative instruments


(1,672
)


(3,793
)


1,355Amortization of option premium


3,239



3,918



4,197Amortization of prepaid expenses


1,762



2,374



Gain on bargain purchase


(372
)






Non cash distributions to member(s)


(424
)


(375
)


(614
)Changes in operating assets and liabilities:Decrease (increase) in accounts receivable


3,610



275



(19,806
)Increase in other assets


(5,393
)


(10,895
)


(65,369
)(Decrease) increase in accounts payable and accrued liabilities


(5,871
)


(1,277
)


48,340Net cash provided by operating activities


105,715



82,704



17,317Cash flows from investing activities:Oil and gas property additions


(335,073
)


(311,689
)


(448,473
)Cash received from insurance proceeds


2,343







Gas processing equipment additions


(246
)


(366
)


(35,586
)Other asset additions


(425
)


(1,511
)


(3,021
)Cash received from sale of assets


8,012



5,584



Net cash used in investing activities


(325,389
)


(307,982
)


(487,080
)Cash flows from financing activities:Borrowings from revolving credit facility


176,500



243,500



269,250Proceeds from issuance of senior notes


345,597







Debt repayments


(347,000
)


(167,500
)


(200,750
)Deferred financing costs


(13,683
)


(3,633
)


(1,179
)Capital contributions


60,208



151,752



367,745Distribution  noncontrolling interests






(475
)


Net cash provided by financing activities


221,622



223,644



435,066Net increase (decrease) in cash and cash equivalents


1,948



(1,634
)


(34,697
)Cash and cash equivalents, beginning of period


2,489



4,123



38,820Cash and cash equivalents, end of period

$
4,437


$
2,489


$
4,123    8




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLCNOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    Organization        2.
    Significant
    Accounting Policies  Basis
    of Presentation
      Change
    in Accounting Method
  2010-03 2010-03),
 9




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash
    and Cash Equivalents
    Concentration
    of Credit Risk
    Inventory
    Oil
    and Natural Gas Properties and Equipment
  
  units-of-production
  Regulation S-X Rule 4-10.
 10




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010-03
          Capitalized
    Interest
   11




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Leases
  Leases
  Derivative
    Instruments and Hedging Activities
      Derivatives and Hedging
 12




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred
    Financing Costs
    Financial
    Instruments
    Asset
    Retirement Obligation
  Asset Retirement and
    Environmental Obligations unit-of-production
    For the Year Ended December 31,2010


2009(In thousands)Beginning Balance

$
8,155


$
6,665Liabilities incurred


595



1,290Liabilities settled


(32
)


(20
)Change in estimate






(187
)Accretion expense


495



407Ending Balance

$
9,213


$
8,155   Revenue
    Recognition
   13




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Use of
    Estimates
      Income
    Taxes
  and/or
    Recent
    Accounting Pronouncements
  2010-29, 2010-29). ASU 2010-29 2010-29
  2010-28, 2010-28). 2010-28
 14




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 2010-09, 855-10 2010-09
  No. 2010-03, 2010-03 2010-03
    Modernization
    of Oil and Gas Reporting 2010-03
  3.
    Significant
    Customers   15




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    4.
    Property
    Acquisitions    Year Ended


Year EndedDecember 31, 2010


December 31, 2009Actual


Pro Forma


Actual


Pro Forma(In millions)Pro Forma (unaudited)Total revenues

$
182.6


$
192.1


$
143.6


$
156.0Total operating expenses

$
112.1


$
116.9


$
499.3


$
498.4Net income (loss) applicable to controlling interests

$
38.8


$
43.4


$
(370.3
)

$
(357.0
)     Year EndedDecember 31, 2010(In millions)Cash, net of accrued purchase price adjustments

$
64.5Recognized amounts of identifiable assets acquired and
    liabilities assumed:Proved developed and undeveloped properties


48.8Unproved leasehold properties


16.4Asset retirement obligation


(0.3
)Bargain purchase gain


(0.4
)Total identifiable net assets

$
64.5        16




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                  5.
    Long-Term
    Debt  Senior
    Notes
   17




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Year

Percentage2014


104.8752015


102.4382016


100.000      18




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    First
    Lien Revolving Credit Facility
           19




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            6.
    Members
    Capital    7.
    Statement
    of Cash Flows    
    Recognition of an asset retirement obligation for the plugging
    and abandonment costs related to the Companys oil and
    natural gas properties valued at $0.6 million.
    Additions to oil and natural gas properties of
    $23.4 million, included in accrued exploration and
    development.    
    Recognition of an asset retirement obligation for the plugging
    and abandonment costs related to the Companys oil and
    natural gas properties valued at $1.1 million.
    Additions to oil and natural gas properties of
    $36.6 million, included in accrued exploration and
    development.    
    Recognition of an asset retirement obligation for the plugging
    and abandonment costs related to the Companys oil and
    natural gas properties valued at $4.9 million. 20




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    Additions to oil and natural gas properties of
    $21.1 million, included in accrued exploration and
    development.    8.
    Derivative
    Financial Instruments  mark-to-market
    2011


2012


2013


2014


2015SwapsVolume (MMBTU)


9,932,456



8,317,098



10,338,731



10,413,793



5,217,687Price

$
7.06


$
7.22


$
7.40


$
7.34


$
6.47CollarsVolume (MMBTU)


11,111,111



7,233,214











Price (Floor/Ceiling)

$
6.00/$7.45


$
6.00/$8.65











   2011


2012


2013


2014


2015Basis Swap, NYMEX  East Texas (Houston Ship
    Channel)Volume (MMBTU)


2,737,500



2,196,000



1,277,500







Contract differential(1)

$
0.10 - $0.15


$
0.10 - $0.15


$
0.11 - $0.15







Basis Swap, NYMEX  TEXOK (NGLP)Volume (MMBTU)


8,212,500



6,588,000



3,869,000







Contract differential(1)

$
0.21 - $0.26


$
0.24 - $0.29


$
0.21 - $0.25







     (1)
    
    Basis swaps settle based on NYMEX pricing minus a differential,
    which is then compared to Inside Federal Energy Regulatory
    Commission (FERC) for the index on which volumes are being
    hedged.   21




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair Value Measurements
    Assets DerivativesDerivatives Designated as Hedging Instruments




December 31, 2010


December 31, 2009(In thousands)Fair ValueCurrent


Derivative Instruments


$
41,805


$
30,719Long term


Derivative Instruments



69,309



28,683Total derivatives designated as hedging instruments





$
111,114


$
59,402   Assets DerivativesDerivatives not Designated as Hedging Instruments




December 31, 2010


December 31, 2009(In thousands)Fair ValueCurrent


Derivative Instruments


$



$
1,569Long term


Derivative Instruments



5



Total derivatives not designated as hedging instruments





$
5


$
1,569   Liabilities DerivativesDerivatives not Designated as Hedging Instruments




December 31, 2010


December 31, 2009(In thousands)Fair ValueFair ValueCurrent


Derivative Instruments


$
(1,056
)

$
198Long term


Derivative Instruments



(1,042
)


509Total derivatives not designated as hedging instruments





$
(2,098
)

$
707  22




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Amount of LossAmount of Gain


Location of Gain

Amount of Gain




Recognized in IncomeDerivatives in Cash

Recognized in


Reclassified from

Reclassified from


Location of Loss in

(Ineffective portion andFlow Hedging

Other Comprehensive


Accumulated OCI

Accumulated OCI into


Other Income

Amount Excluded fromRelationships

Income (OCI)


into Operating Income

Operating Income


Ineffective Hedges

Effectiveness Testing)(In thousands)For the Year Ended December 31, 2010Derivative
    Instruments

$
105,629


Gain on
    derivative instruments

$
55,305


Loss on
    derivative instruments

$
(533
)Total

$
105,629




$
55,305




$
(533
)For the Year Ended December 31, 2009Derivative
    Instruments

$
76,289


Gain on
    derivative instruments

$
61,809


Loss on
    derivative instruments

$
(107
)Total

$
76,289




$
61,809




$
(107
)     Recognized in Other Income onDerivatives not Designated

Location of Gain/(Loss)

Derivatives for the Years Endedas Hedging Instruments

Recognized in Other Income

December 31, 2010


December 31, 2009(In thousands)Derivative Instruments

Gain (loss) on
    Derivative Instruments

$
(1,121
)

$
187       9.
    Fair
    Value Measurements  Fair Value
    Measurement 820-10-55, 820-10-55
 23




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Level 1
  Level 2
  Level 3
    Recurring Fair Value MeasuresLevel 1


Level 2


Level 3


Total(In millions)As of December 31, 2010Derivative Assets

$



$
109.0


$



$
109.0Derivative Liabilities














Total

$



$
109.0


$



$
109.0  24




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Level 1


Level 2


Level 3


TotalAs of December 31, 2009Derivative Assets

$



$
61.0


$



$
61.0Derivative Liabilities






(0.7
)






(0.7
)Total

$



$
60.3


$



$
60.3         December 31,2010(In thousands)2017 Senior NotesCarrying Value

$
346,153Fair Value

$
322,207   10.
    Related-Party
    Transactions      11.
    Commitments     25




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Estimated Payments(In millions)Year Ending December 31,2011

$
46.42012


40.42013


25.12014


0.12015


Thereafter


$
112.0         12.
    Employee
    Benefit Plans    13.
    Subsequent
    Events       26




---



##### 



Consolidated
    Financial Statements
    NFR Energy LLC
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    The Company liquidated and settled all existing hedge contracts
    covering volumes for the years 2014 and 2015.
    The Company re-couponed all volumes covered by the
    existing 2013 swap contracts from $7.40MMBTU to $6.0MMBTU.
    Added new swap contracts of 9.6BCF at an average price of
    $6.17MMBTU and 16.4BCF at an average price of $5.67MMBTU in 2011
    and 2012, respectively. Proceeds from the liquidation and
    re-couponing actions taken in the bullets above were used to
    execute the new swap contracts that were added for 2011 and 2012. 27




---



##### 



SUPPLEMENTAL
    OIL AND GAS DISCLOSURE (UNAUDITED)



The following supplemental information regarding our natural gas
    and oil producing activities is presented in accordance with the
    requirements of
    Section 932-235-50
    of the ASC.



Costs
    Incurred



The costs incurred in oil and natural gas acquisitions,
    exploration and development activities were as follows: For the Year Ended December 31,2010


2009


2008(In thousands)Property acquisition costs, proved(1)

$
60,252


$
6,297


$
162,300Property acquisition costs, unproved


68,758



62,725



86,353Exploration and extension well costs


218



2,263



1,692Development costs(1)


238,850



252,838



219,108Asset retirement costs


595



1,100



5,000Total Costs

$
368,673


$
325,223


$
474,453     (1)
    
    Property acquisition and development costs for the year ended
    December 31, 2008 differ from the amounts reflected in the
    notes to our audited consolidated financial statements due in
    part to the inclusion in the amount shown in the notes of the
    acquisition costs related to the acquisition of certain
    gathering assets and to the recharacterization as development
    costs of a portion of the costs originally characterized as
    property acquisition costs. The Company reclassified and
    recharacterized these cost to reflect the total cost incurred
    for oil and gas producing activities during the period, versus
    costs relating solely to acquisitions that closed during the
    period, which are disclosed in Note 4.  Capitalized
    Costs
    For the Year Ended December 31,2010


2009


2008(In thousands)Proved properties

$
1,506,565


$
1,177,439


$
796,916Unproved properties


218,172



178,625



233,9241,724,737



1,356,064



1,030,840Accumulated depletion, depreciation and amortization


(925,874
)


(877,190
)


(450,101
)Net capitalized costs

$
798,863


$
478,874


$
580,739  28




---



##### 



SUPPLEMENTAL
    OIL AND GAS DISCLOSURE
    (UNAUDITED)  (Continued)
  Results
    of Operations
    For the Year Ended December 31,2010


2009


2008(In thousands)Revenues

$
130,123


$
81,937


$
96,015Gain (loss) on derivative instruments


51,104



60,686



(2,266
)Operating costs:Lease operating expenses


18,982



18,520



13,249Workover expenses


848



482



843Marketing, gathering, transportation and other


11,792



6,031



3,107Production and ad valorem taxes


5,483



4,228



5,364Depletion, depreciation and amortization


48,685



41,137



32,993Impairments


1,711



407,295



415,843Results of operations

$
93,726


$
(335,070
)

$
(377,650
)Amortization rate per bcfe

$
3.32


$
(15.66
)

$
(32.00
)   Oil and
    Natural Gas Reserves and Related Financial Data
      first-day-of-the-month
 29




---



##### 



SUPPLEMENTAL
    OIL AND GAS DISCLOSURE
    (UNAUDITED)  (Continued)
    Natural








Natural GasGas


NGLS


Oil


EquivalentsEstimated Proved Reserves

(Bcf)


(BBLS)


(BBLS)


(Bcfe)December 31, 2007


270.1



6.3



2.5



323.1Revisions  Performance


4.3







(0.4
)


1.9Revisions  Pricing


(82.9
)


(2.0
)


(0.8
)


(99.9
)Extensions, Additions and Discoveries


121.3



0.9



0.8



131.1Production


(10.2
)


(0.2
)


(0.1
)


(11.6
)Purchases in Place


73.2



0.3



0.7



79.2Sales in Place














December 31, 2008


375.8



5.3



2.7



423.8Revisions  Performance


14.1



0.3



0.2



17.0Revisions  Pricing


(86.2
)


(1.3
)


(0.5
)


(96.9
)Extensions, Additions and Discoveries (Old SEC Rules)


192.7



0.6



1.7



207.1Extensions, Additions and Discoveries (New SEC Rules)(1)


460.9



1.3



0.6



472.4Production


(18.9
)


(0.3
)


(0.1
)


(21.4
)Purchases in Place














Sales in Place














December 31, 2009


938.4



5.9



4.6



1,002.0Revisions  Performance(2)


(248.2
)


3.9



(0.9
)


(230.3
)Revisions  Pricing


8.8



0.1







9.4Extensions, Additions and Discoveries


218.1



0.8



0.5



226.2Production


(24.8
)


(0.4
)


(0.1
)


(28.2
)Purchases in Place(3)


220.8



0.9



0.8



230.3Sales in Place


(2.1
)






(0.1
)


(2.7
)December 31, 2010


1,111.0



11.2



4.8



1,206.7Estimated Proved Developed ReservesDecember 31, 2008


164.0



2.2



1.1



183.8December 31, 2009


214.5



2.3



1.3



236.0December 31, 2010


295.6



4.6



1.5



332.6     (1)
    
    Primarily due to the application of revised definitions
    contained in the SECs new rules, particularly the
    definition of proved oil and natural gas reserves, which now
    permits the addition of undrilled locations beyond immediate
    offsets of producing wells that are supported by a
    determination, with reasonable certainty, of reservoir
    continuity. 30




---



##### 



SUPPLEMENTAL
    OIL AND GAS DISCLOSURE
    (UNAUDITED)  (Continued)
   (2)
    
    The decrease in the quantity of reserves due to the change in
    estimate is primarily attributable to reserve quantities
    associated with proved undeveloped locations included as proved
    in 2009 that were not included in the 2010 report as they could
    not be developed with a five year time horizon as prescribed
    under ASC 932.(3)
    
    Attributable to the purchase of oil and gas properties in East
    Texas as described in Note 4 in the Notes to
    Consolidated Financial Statements.  Standardized
    Measure of Discounted Future Net Cash Flows Relating to Proved
    Oil and Gas Reserves
  Disclosures about Oil and Gas
    Producing Activities.
    
    future costs and sales prices will probably differ from those
    required to be used in these calculations;
    actual production rates for future periods may vary
    significantly from the rates assumed in the calculations;
    a 10% discount rate may not be reasonable relative to risk
    inherent in realizing future net oil and natural gas revenues.  first-day-of-the-month
   31




---



##### 



SUPPLEMENTAL
    OIL AND GAS DISCLOSURE
    (UNAUDITED)  (Continued)
    For the Year Ended December 31,2010


2009


2008(In thousands)Future cash inflows

$
5,807,655


$
3,915,847


$
2,311,193Less related future:Production costs


(1,513,149
)


(1,257,905
)


(760,534
)Development costs


(1,708,651
)


(1,307,147
)


(581,600
)Future net cash inflows


2,585,855



1,350,795



969,05910% annual discount for estimated timing of cash flows(1)


(2,000,181
)


(1,244,380
)


(688,632
)Standardized measure of discounted future net cash flows

$
585,674


$
106,415


$
280,427     (1)
    
    The high effective discount factor is attributable to the
    negative present value factor, which is due to the addition of
    proved undeveloped properties that require a large amount of
    development costs. Additionally, these costs are weighted
    heavily in the first five years.    For the Year Ended December 31,2010


2009


2008(In thousands)Beginning Balance


106,415



280,427



326,481Revisions of previous estimatesChanges in prices and costs


296,445



(147,028
)


(253,529
)Changes in quantities


154,218



1,803



1,278Additions to proved reserves(1)


40,663



(52,953
)


26,513Purchases of reserves


10,960







145,855Sales of reserves


(2,907
)






Accretion of discount


10,642



28,043



32,648Sales of oil and gas, net


(93,018
)


(52,302
)


(72,550
)Change in estimated future development costs


(113,582
)


27,954



74,659Previously estimated development costs incurred


139,109



12,279



23,068Changes in rate of production and other, net


36,729



8,192



(23,996
)Net change


479,259



(174,012
)


(46,054
)Ending Balance


585,674



106,415



280,427     (1)
    
    The negative value of additions in 2009 is attributable to a
    large number of wells that were proved as a result of the new
    SEC rules. Consistent with the new SEC rules, the Company only
    adds proved undeveloped reserves that will be developed within a
    five year time horizon. As a result, a large amount of future
    development costs are included in the present value calculation.
    Additionally, these costs are not discounted as heavily as costs
    in the later years, thus causing the total present value to be
    negative. 32