The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in our
Annual Report on Form 10-K for the year ended December 31, 2019, as well as the
unaudited condensed consolidated financial statements and notes thereto included
in this Quarterly Report on Form 10-Q.
Executive Summary
We are an independent Denver-based exploration and production company focused on
the acquisition, development, and extraction of oil and associated liquids-rich
natural gas in the United States. Our oil and liquids-weighted assets and
operations are concentrated in the rural portions of the Wattenberg Field in
Colorado. Our development and extraction activities are primarily directed at
the horizontal development of the Niobrara and Codell formations in the
Denver-Julesburg ("DJ") Basin. The majority of our revenues are generated
through the sale of oil, natural gas, and natural gas liquids production.
The Company's primary objective is to maximize shareholder returns by
responsibly developing our oil and gas resources. We seek to balance production
growth with maintaining a conservative balance sheet. Key aspects of our
strategy include multi-well pad development across our leasehold, enhanced
completions through continuous design evaluation, utilization of scaled
infrastructure, continuous safety improvement, strict adherence to health and
safety regulations, and environmental stewardship.
Financial and Operating Results
Our financial and operational results include:
•General and administrative expense per Boe decreased by 24% during the three
months ended March 31, 2020 when compared to the same period in 2019 and is
expected to further decrease throughout 2020;
•Lease operating expense per Boe decreased by 13% for the three months ended
March 31, 2020 when compared to the same period in 2019 and is expected to
further decrease throughout 2020;
•Crude oil equivalent sales volumes increased 21% for the three months ended
March 31, 2020 when compared to the same period in 2019 despite the significant
curtailment of our drilling and completion program in response to the drop in
commodity prices;
•Borrowings under our Credit Facility were reduced by $21.0 million to $59.0
million during the three months ended March 31, 2020 from the $80.0 million
outstanding at December 31, 2019;
•Total liquidity of $302.1 million at March 31, 2020, consisting of cash on hand
plus funds available under our Credit Facility. Please refer to Liquidity and
Capital Resources below for additional discussion;
•Cash flows provided by operating activities for the three months ended March
31, 2020 were $48.0 million, as compared to cash flows provided by operating
activities of $41.7 million during the three months ended March 31, 2019. Please
refer to Liquidity and Capital Resources below for additional discussion; and
•Incurred capital expenditures, inclusive of accruals, of $41.1 million during
the three months ended March 31, 2020.
Rocky Mountain Infrastructure
The Company's gathering, treating, and production facilities, maintained under
its Rocky Mountain Infrastructure, LLC ("RMI") subsidiary, provide many
operational benefits to the Company and provide cost economies of a centralized
system. The RMI facilities reduce gathering system pressures at the wellhead,
thereby improving hydrocarbon recovery. Additionally, with eleven interconnects
to four different natural gas processors, RMI helps ensure that the Company's
production is not constrained by any single midstream service provider.
Furthermore, in 2019, the Company installed a new oil gathering line to
Riverside Terminal, which resulted in a corresponding $1.50 per barrel reduction
to our oil differentials for barrels transported on such gathering line.
Finally, the system reduces facility site footprints, leading to more
cost-efficient operations and reduced surface disturbance. The net book value of
the Company's RMI assets was $152.8 million as of March 31, 2020.
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Outlook for 2020
The recent worldwide outbreak of COVID-19, the uncertainty regarding the impact
of COVID-19, and various governmental actions taken to mitigate the impact of
COVID-19, have resulted in an unprecedented decline in demand for oil and
natural gas. At the same time, the decision by Saudi Arabia in March 2020 to
drastically reduce export prices and increase oil production further increased
the excess supply of oil and natural gas. Due to the decline in crude oil prices
and ongoing uncertainty regarding the oil supply-demand macro environment as a
result of these events, we have recently suspended all drilling and
significantly reduced completion and infrastructure activities.
The COVID-19 outbreak and its development into a pandemic in March 2020 have
also required that we take precautionary measures intended to help minimize the
risk to our business, employees, customers, suppliers, and the communities in
which we operate. Our operational employees are currently still able to work on
site. However, we have taken various precautionary measures with respect to our
operational employees such as requiring them to verify they have not experienced
any symptoms consistent with COVID-19, or been in close contact with someone
showing such symptoms, before reporting to the work site, quarantining any
operational employees who have shown signs of COVID-19 (regardless of whether
such employee has been confirmed to be infected), and imposing social distancing
requirements on work sites, all in accordance with the guidelines released by
the Center for Disease Control. In addition, most of our non-operational
employees are now working remotely. We have not yet experienced any material
operational disruptions (including disruptions from our suppliers and service
providers) as a result of the COVID-19 outbreak, nor had any confirmed cases of
COVID-19 on any of our work sites.
The Company's initial 2020 capital budget of $215.0 million to $235.0 million
assumed the continuation of a one-rig operated program in the Company's legacy
acreage and the startup of a one-rig non-operated program in the Company's
French Lake area in late 2020. However, due to the unprecedented drop in
commodity prices that commenced in early March 2020, the Company updated its
2020 operating plan to reflect an anticipated 2020 capital budget of
$80.0 million to $100.0 million. The Company's reduced planned development
activity included limited drilling and completion activity that concluded in
March 2020. We now estimate our capital budget will be between $60.0 million and
$70.0 million as our non-operated capital estimate has been reduced and we
continue to receive cost concessions from capital service providers.
Should commodity prices recover, and the economic returns justify resuming
limited development activity, we will do so. Actual capital expenditures could
vary significantly based on, among other things, changes in the operator's
development pace in French Lake, market conditions, commodity prices, drilling
and completion costs, well results, and changes in the borrowing base under our
Credit Facility.
In further response to the recent drop in commodity prices, both our named
executive officers and our independent directors have voluntarily reduced their
compensation. Effective in early April 2020, our Chief Executive Officer's
salary was reduced by 12.5%, the other named executive officers' salaries were
each reduced by 10%, and our independent directors' base annual cash retainers
were reduced by 15%. In addition, the Company completed a 12% reduction in its
workforce during the first quarter, which helped allow the Company to lower its
2020 recurring cash G&A guidance to a range of $27 million to $29 million, down
13% from $32 million in 2019. The Company has also identified, and is
implementing, approximately $8 million in LOE and RMI operating expense savings
compared to the Company's original 2020 plan.


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Results of Operations
The following table summarizes our product revenues, sales volumes, and average
sales prices for the periods indicated:
                                                         Three Months Ended 

March 31,


                                                            2020                 2019              Change           Percent Change
Revenues (in thousands):
Crude oil sales(1)                                    $      50,589           $ 60,211          $  (9,622)                   (16) %
Natural gas sales(2)                                          4,962              6,772             (1,810)                   (27) %
Natural gas liquids sales                                     3,241              4,348             (1,107)                   (25) %
Product revenue                                       $      58,792           $ 71,331          $ (12,539)                   (18) %

Sales Volumes:
Crude oil (MBbls)                                           1,229.4            1,208.2               21.2                      2  %
Natural gas (MMcf)                                          3,562.7            2,198.4            1,364.3                     62  %
Natural gas liquids (MBbls)                                   436.9              291.6              145.3                     50  %
Crude oil equivalent (MBoe)(3)                              2,260.1            1,866.2              393.9                     21  %

Average Sales Prices (before derivatives)(4):
Crude oil (per Bbl)                                   $       41.15           $  49.83          $   (8.68)                   (17) %
Natural gas (per Mcf)                                 $        1.39           $   3.08          $   (1.69)                   (55) %
Natural gas liquids (per Bbl)                         $        7.42           $  14.91          $   (7.49)                   (50) %
Crude oil equivalent (per Boe)(3)                     $       26.01           $  38.22          $  (12.21)                   (32) %

Average Sales Prices (after derivatives)(4):
Crude oil (per Bbl)                                   $       49.64           $  51.55          $   (1.91)                    (4) %
Natural gas (per Mcf)                                 $        1.62           $   2.56          $   (0.94)                   (37) %
Natural gas liquids (per Bbl)                         $        7.42           $  14.91          $   (7.49)                   (50) %
Crude oil equivalent (per Boe)(3)                     $       30.99           $  38.72          $   (7.73)                   (20) %


_____________________________


(1)Crude oil sales excludes $0.6 million of oil transportation revenues from
third parties, which do not have associated sales volumes, for each of the three
months ended March 31, 2020 and 2019.
(2)Natural gas sales excludes $1.0 million and $0.7 million of gas gathering
revenues from third parties, which do not have associated sales volumes, for the
three months ended March 31, 2020 and 2019, respectively.
(3)Determined using the ratio of 6 Mcf of natural gas to 1 Bbl of crude oil.
(4)Derivatives economically hedge the price we receive for crude oil and natural
gas. For the three months ended March 31, 2020, the derivative cash settlement
gain for oil contracts was approximately $10.4 million, and the derivative cash
settlement gain for natural gas contracts was approximately $0.8 million. For
the three months ended March 31, 2019, the derivative cash settlement gain for
oil contracts was $2.1 million, and the derivative cash settlement loss for gas
contracts was $1.1 million. Please refer to Note 10 - Derivatives of Part I,
Item 1 of this report for additional disclosures.
Product revenues decreased by 18% to $58.8 million for the three months ended
March 31, 2020 compared to $71.3 million for the three months ended March 31,
2019. The primary driver of the decrease in revenue is the $12.21 or 32%
decrease in oil equivalent pricing offset by a 21% increase in sales volumes.
The increase in sales volumes is due to turning 38 gross wells to sales during
the twelve-month period ending March 31, 2020.

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The following table summarizes our operating expenses for the periods indicated:
                                                        Three Months Ended March 31,
                                                           2020                 2019             Change           Percent Change
Expenses (in thousands):
Lease operating expense                              $       5,699           $  5,426          $    273                      5  %
Midstream operating expense                                  4,014              2,321             1,693                     73  %
Gathering, transportation, and processing                    3,481              4,022              (541)                   (13) %
Severance and ad valorem taxes                               5,173              4,248               925                     22  %
Exploration                                                    373                 97               276                    285  %
Depreciation, depletion, and amortization                   21,584             15,759             5,825                     37  %
Abandonment and impairment of unproved properties           30,057                879            29,178                  3,319  %
Bad debt expense                                               576                  -               576                    100  %
General and administrative expense                           9,429             10,278              (849)                    (8) %
Operating Expenses                                   $      80,386           $ 43,030          $ 37,356                     87  %

Selected Costs ($ per Boe):
Lease operating expense                              $        2.52           $   2.91          $  (0.39)                   (13) %
Midstream operating expense                                   1.78               1.24              0.54                     44  %
Gathering, transportation, and processing                     1.54               2.16             (0.62)                   (29) %
Severance and ad valorem taxes                                2.29               2.28              0.01                      -  %
Exploration                                                   0.17               0.05              0.12                    240  %
Depreciation, depletion, and amortization                     9.55               8.44              1.11                     13  %
Abandonment and impairment of unproved properties            13.30               0.47             12.83                  2,730  %
Bad debt expense                                              0.25                  -              0.25                    100  %
General and administrative expense                            4.17               5.51             (1.34)                   (24) %
Operating Expenses                                   $       35.57           $  23.06          $  12.51                     54  %


Lease operating expense.  Our lease operating expense increased $0.3 million, or
5%, to $5.7 million for the three months ended March 31, 2020, from $5.4 million
for the three months ended March 31, 2019, and decreased on an equivalent basis
per Boe by 13%. The overall increase was primarily due to higher salt water
disposal costs, and the lease operating expense per unit decreased due to oil
equivalent sales volumes being 21% higher in the later period.
Midstream operating expense.  Our midstream operating expense increased
$1.7 million to $4.0 million for the three months ended March 31, 2020, from
$2.3 million for the three months ended March 31, 2019, and increased 44% on a
per Boe basis during the comparable periods. The increase was primarily due to
costs associated with the Company's new and expanded oil gathering line
connected to the Riverside Terminal that came online in July 2019.
Gathering, transportation, and processing.  Gathering, transportation, and
processing expense decreased by $0.5 million to $3.5 million for the three
months ended March 31, 2020, from $4.0 million for the three months ended March
31, 2019. Sales volumes have a direct correlation to gathering, transportation,
and processing expense. Although sales volumes increased 21% during the three
months ended March 31, 2020 as compared to the three months ended March 31,
2019, a decrease in fees on sales contracts contributed to the overall decrease
in gathering, transportation, and processing expense.
Severance and ad valorem taxes.  Our severance and ad valorem taxes increased
22% to $5.2 million for the three months ended March 31, 2020, from $4.2 million
for the three months ended March 31, 2019. The increase was primarily due to
additional property value associated with ad valorem taxes between the
comparable periods.
Depreciation, depletion, and amortization.  Our depreciation, depletion, and
amortization expense increased 37% to $21.6 million for the three months ended
March 31, 2020, from $15.8 million for the three months ended March 31, 2019,
and increased 13% on a per Boe basis during the comparable periods. The increase
in depreciation, depletion, and amortization expense during the three months
ended March 31, 2020 when compared to the three months ended March 31, 2019 is
the result of (i) a $201.3 million increase in the depletable property base and
(ii) an increase in the depletion rate driven by a substantial increase in
production between the comparable periods.
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Abandonment and impairment of unproved properties.  During the three months
ended March 31, 2020, the Company incurred a $30.1 million abandonment and
impairment of unproved properties due to the reassessment of estimated probable
and possible reserve locations based primarily upon economic viability. In
addition, during the three months ended March 31, 2019, the Company incurred
$0.9 million in abandonment and impairment of unproved properties costs due to
the expiration of non-core leases.
Bad debt expense. Our bad debt expense increased 100% to $0.6 million for the
three months ended March 31, 2020, compared to the three months ended March 31,
2019. The increase is due to the establishment of an allowance against our joint
interest receivable, which have greater recoverability risk due to the
deterioration of commodity prices.
General and administrative. Our general and administrative expense decreased by
$0.8 million or 8% for the three months ended March 31, 2020, compared to the
three months ended March 31, 2019, and decreased by 24% on a per Boe basis
between the comparable periods. The decrease in general and administrative
expense between the comparable periods is primarily due to a decrease in
salaries, benefits, and stock compensation expense. General and administrative
expense per Boe decreased on a higher percentage basis due to oil equivalent
sales volumes being 21% higher during the three months ended March 31, 2020 as
compared to the same period in 2019.
Derivative gain (loss).  Our derivative gain for the three months ended March
31, 2020 was $100.4 million, as compared to a derivative loss of $36.5 million
for the three months ended March 31, 2019. Our derivative gain is due to
settlements and fair market value adjustments caused by market prices being
lower than our contracted hedge prices. Please refer to Note 10 - Derivatives of
Part I, Item 1 of this report for additional discussion.
Interest expense.  Our interest expense for the three months ended March 31,
2020 and 2019 was $0.2 million and $1.2 million, respectively. Average debt
outstanding for the three months ended March 31, 2020 and 2019 was $84.8 million
and $64.7 million, respectively. The components of interest expense for the
periods presented are as follows (in thousands):
                                                              Three Months Ended March 31,
                                                              2020                     2019
Credit Facility                                        $           810     

$ 758 Commitment fees on available borrowing base under the Credit Facility

                                                    251                      268
Amortization of deferred financing costs                           123                      125
Capitalized interest                                              (967)                       -
Total interest expense, net                            $           217           $        1,151



Liquidity and Capital Resources
The Company's anticipated sources of liquidity include cash from operating
activities, borrowings under the Credit Facility, proceeds from sales of assets,
and potential proceeds from capital and/or debt markets. Our cash flows from
operating activities are subject to significant volatility due to changes in
commodity prices, as well as variations in our production. The prices for these
commodities are driven by a number of factors beyond our control, including
global and regional product supply and demand, weather, product distribution,
refining and processing capacity, regulatory constraints, and other supply chain
dynamics, among other factors. To mitigate pricing risk, we have approximately
100% of our average 2020 guided oil production hedged as of March 31, 2020 and
as of the filing date of this report. Consequently, the value of our commodity
contracts as of March 31, 2020 was a net asset of $89.1 million. Additionally,
in light of the recent suspension of drilling activities, we intend to pay down
our Credit Facility to an undrawn balance by December 31, 2020 using net cash
provided by operating activities.
As of March 31, 2020, our liquidity was $302.1 million, consisting of
$11.1 million of cash on hand and $291.0 million of available borrowing capacity
on the Credit Facility. The next scheduled redetermination is set to occur in
May 2020, but was not completed prior to the date of this filing. The Company
does not expect that any reduction resulting from the May 2020 redetermination
will result in a substantial impact to our future operations or liquidity.

We anticipate investing approximately $60.0 million to $70.0 million during
2020, which will allow us to preserve our reserve value while maintaining almost
flat production.
Our weighted-average interest rate on borrowings from the Credit Facility was
3.78% for the three months ended March 31, 2020. As of both March 31, 2020 and
the date of this filing, we had $59.0 million outstanding on our Credit
Facility.
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The following table summarizes our cash flows and other financial measures for
the periods indicated (in thousands):
                                                                            

Three Months Ended March 31,


                                                                               2020                 2019
Net cash provided by operating activities                                $      47,994           $ 41,721
Net cash used in investing activities                                          (26,871)           (36,788)
Net cash provided by (used in) financing activities                            (21,071)            14,847
Cash, cash equivalents, and restricted cash                                     11,147             32,782
Acquisition of oil and gas properties                                             (284)            (1,362)
Exploration and development of oil and gas properties                          (26,225)           (36,503)


Cash flows provided by operating activities
Our cash flows for the three months ended March 31, 2020 and 2019 include cash
receipts and disbursements attributable to our normal operating cycle. See
Results of Operations above for more information on the factors driving these
changes.
Cash flows used in investing activities
Expenditures for development of oil and natural gas properties are the primary
use of our capital resources. The Company spent $26.2 million and $36.5 million
on the exploration and development of oil and gas properties during the three
months ended March 31, 2020 and 2019, respectively. The decrease in capital
expenditures among the periods is primarily due to the reduced drilling and
completion activity in response to the unprecedented drop in commodity prices in
March 2020. The Company also spent $1.1 million less on acquisitions of oil and
gas properties during the three months ended March 31, 2020 when compared to the
same period in 2019.
Cash flows provided by financing activities
Net cash used in financing activities for the three months ended March 31, 2020
was $21.1 million, compared to cash provided by financing activities for the
three months ended March 31, 2019 of $14.8 million. The change was primarily due
to net payments on our Credit Facility during the three months ended March 31,
2020.
Non-GAAP Financial Measures
Adjusted EBITDAX represents earnings before interest, income taxes,
depreciation, depletion, and amortization, exploration expense, and other
non-cash and non-recurring charges. Adjusted EBITDAX excludes certain items that
we believe affect the comparability of operating results and can exclude items
that are generally non-recurring in nature or whose timing and/or amount cannot
be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present
because we believe it provides useful additional information to investors and
analysts, as a performance measure, for analysis of our ability to internally
generate funds for exploration, development, acquisitions, and to service debt.
We are also subject to financial covenants under our Credit Facility based on
adjusted EBITDAX ratios as further described Note 5 - Long-Term Debt in Part I,
Item I of this document. In addition, adjusted EBITDAX is widely used by
professional research analysts and others in the valuation, comparison, and
investment recommendations of companies in the oil and gas exploration and
production industry. Adjusted EBITDAX should not be considered in isolation or
as a substitute for net income, income from operations, net cash provided by
operating activities, or other profitability or liquidity measures prepared
under GAAP. Because adjusted EBITDAX excludes some, but not all, items that
affect net income (loss) and may vary among companies, the adjusted EBITDAX
amounts presented may not be comparable to similar metrics of other companies.

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The following table presents a reconciliation of the GAAP financial measure of
net income to the non-GAAP financial measure of Adjusted EBITDAX (in thousands):

                                                                            

Three Months Ended March 31,


                                                                                       2020                   2019
Net income (loss)                                                                $      78,551           $    (6,993)
Exploration                                                                                373                    97
Depreciation, depletion, and amortization                                               21,584                15,759
Amortization of deferred financing costs                                                     -                   125
Abandonment and impairment of unproved properties                                       30,057                   879
Stock-based compensation (1)                                                             1,239                 1,380
Severance costs (1)                                                                        413                   418
Gain on sale of properties, net                                                              -                (1,126)
Interest expense, net                                                                      217                 1,151
Derivative (gain) loss                                                                (100,419)               36,544
Derivative cash settlements                                                             11,254                   936

Adjusted EBITDAX                                                                 $      43,269           $    49,170

_______________________________

(1) Included as a portion of general and administrative expense in the accompanying statements of operations.

New Accounting Pronouncements Please refer to Note 2 - Basis of Presentation under Part I, Item 1 of this report for any recently issued or adopted accounting standards.

Critical Accounting Policies and Estimates Information regarding our critical accounting policies and estimates is contained in Part II, Item 7 of our 2019 Form 10-K.

Off-Balance Sheet Arrangements Currently, we do not have any off-balance sheet arrangements that are not disclosed within this report.



Contractual Obligations
There have been no significant changes from our 2019 Form 10-K in our
obligations and commitments, other than what is disclosed within Note 3 - Leases
and Note 6 - Commitments and Contingencies under Part I, Item 1 of this report.

Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains various statements, including those
that express belief, expectation, or intention, as well as those that are not
statements of historic fact, that are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"). When used in this Quarterly Report on Form 10-Q, the words
"could," "believe," "anticipate," "intend," "estimate," "expect," "may,"
"continue," "predict," "potential," "project," "plan," "will," and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words. These
forward-looking statements are based on management's current belief, based on
currently available information, as to the outcome and timing of future events.
Forward-looking statements include statements related to, among other things:
•the Company's business strategies;
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•reserves estimates;
•estimated sales volumes;
•amount and allocation of forecasted capital expenditures and plans for funding
capital expenditures and operating expenses;
•ability to modify future capital expenditures;
•anticipated costs;
•compliance with debt covenants;
•ability to fund and satisfy obligations related to ongoing operations;
•compliance with government regulations, including environmental, health, and
safety regulations and liabilities thereunder;
•adequacy of gathering systems and continuous improvement of such gathering
systems;
•impact from the lack of available gathering systems and processing facilities
in certain areas;
•impact of any pandemic or other public health epidemic, including the ongoing
COVID-19 pandemic;
•natural gas, oil, and natural gas liquid prices and factors affecting the
volatility of such prices;
•impact of lower commodity prices;
•sufficiency of impairments;
•the ability to use derivative instruments to manage commodity price risk and
ability to use such instruments in the future;
•our drilling inventory and drilling intentions;
•impact of potentially disruptive technologies;
•our estimated revenue gains and losses;
•the timing and success of specific projects;
•our implementation of standard and long reach laterals;
•our use of multi-well pads to develop the Niobrara and Codell formations;
•intention to continue to optimize enhanced completion techniques and well
design changes;
•stated working interest percentages;
•management and technical team;
•outcomes and effects of litigation, claims, and disputes;
•primary sources of future production growth;
•full delineation of the Niobrara B, C and Codell benches in our legacy, French
Lake, and northern acreage;
•our ability to replace oil and natural gas reserves;
•our ability to convert PUDs to producing properties within five years of their
initial proved booking;
•impact of recently issued accounting pronouncements;
•impact of the loss a single customer or any purchaser of our products;
•timing and ability to meet certain volume commitments related to purchase and
transportation agreements;
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•the impact of customary royalty interests, overriding royalty interests,
obligations incident to operating agreements, liens for current taxes, and other
industry-related constraints;
•our financial position;
•our cash flow and liquidity;
•the adequacy of our insurance; and
•other statements concerning our operations, economic performance, and financial
condition.
We have based these forward-looking statements on certain assumptions and
analyses we have made in light of our experience and our perception of
historical trends, current conditions, and expected future developments as well
as other factors we believe are appropriate under the circumstances. They can be
affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Many such factors will be important in determining actual future
results. The actual results or developments anticipated by these forward-looking
statements are subject to a number of risks and uncertainties, many of which are
beyond our control, and may not be realized or, even if substantially realized,
may not have the expected consequences. Actual results could differ materially
from those expressed or implied in the forward-looking statements.
Factors that could cause actual results to differ materially include, but are
not limited to, the following:
•the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2019 and in Part II, Item 1A of this report;
•further declines or volatility in the prices we receive for our oil, natural
gas liquids, and natural gas;
•general economic conditions, whether internationally, nationally or in the
regional and local market areas in which we do business;
•the effects of disruption of our operations or excess supply of oil and natural
gas due to the COVID-19 pandemic and the actions by certain oil and natural gas
producing countries;
•ability of our customers to meet their obligations to us;
•our access to capital;
•our ability to generate sufficient cash flow from operations, borrowings, or
other sources to enable us to fully develop our undeveloped acreage positions;
•the presence or recoverability of estimated oil and natural gas reserves and
the actual future sales volume rates and associated costs;
•uncertainties associated with estimates of proved oil and gas reserves;
•the possibility that the industry may be subject to future local, state, and
federal regulatory or legislative actions (including additional taxes and
changes in environmental regulation);
•environmental risks;
•seasonal weather conditions;
•lease stipulations;
•drilling and operating risks, including the risks associated with the
employment of horizontal drilling and completion techniques;
•our ability to acquire adequate supplies of water for drilling and completion
operations;
•availability of oilfield equipment, services, and personnel;
•exploration and development risks;
•operational interruption of centralized gas and oil processing facilities;
•competition in the oil and natural gas industry;
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•management's ability to execute our plans to meet our goals;
•our ability to attract and retain key members of our senior management and key
technical employees;
•our ability to maintain effective internal controls;
•access to adequate gathering systems and pipeline take-away capacity;
•our ability to secure adequate processing capacity for natural gas we produce,
to secure adequate transportation for oil, natural gas, and natural gas liquids
we produce, and to sell the oil, natural gas, and natural gas liquids at market
prices;
•costs and other risks associated with perfecting title for mineral rights in
some of our properties;
•continued hostilities in the Middle East, South America, and other sustained
military campaigns or acts of terrorism or sabotage; and
•other economic, competitive, governmental, legislative, regulatory,
geopolitical, and technological factors that may negatively impact our
businesses, operations, or pricing.
All forward-looking statements speak only as of the date of this report. We
disclaim any obligation to update or revise these statements unless required by
law, and you should not place undue reliance on these forward-looking
statements. Although we believe that our plans, intentions, and expectations
reflected in or suggested by the forward-looking statements we make in this
report are reasonable, we can give no assurance that these plans, intentions, or
expectations will be achieved. We disclose important factors that could cause
our actual results to differ materially from our expectations under Part II,
Item 1A. Risk Factors and Part I, Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations and elsewhere in this report.
These cautionary statements qualify all forward-looking statements attributable
to us or persons acting on our behalf.

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