Maintain Flexible Capital Expenditure Budget. The timing of most of our capital expenditures is discretionary because we have not made any significant long-term capital expenditure commitments except for contracted drilling and completion services. We operate most of the drilling projects in which we participate. Consequently, we have a significant degree of flexibility to adjust the level of such expenditures according to market conditions. We have budgeted to spend approximately $450.0 million in 2014 on our development and exploration projects and $28.0 million for lease acquisition activity. Acquire High Quality Properties at Attractive Costs. Historically, we have had a successful track record of increasing our oil and natural gas reserves through opportunistic acquisitions. Over the last twenty years, we have added 1.1 Tcfe of proved oil and natural gas reserves from 38 acquisitions of producing oil and gas properties at a total cost of $1.3 billion, or $1.17 per Mcfe. The acquisitions were acquired at an average of 67% of their PV 10 Value in the year the acquisitions were completed. In evaluating acquisitions, we apply strict economic and reserve risk criteria. We target properties in our core operating areas with established production and low operating costs that also have potential opportunities to increase production and reserves through exploration and exploitation activities. We also evaluate our existing properties and consider divesting of non-strategic assets when market conditions are favorable. The following table summarizes the estimated proved oil and natural gas reserves for our fifteen largest field areas as of December 31, 2013: (1) Oil is converted to natural gas equivalents by using a conversion factor of one barrel of oil for six Mcf of natural gas based upon the approximate relative energy content of oil to natural gas, which is not indicative of oil and natural gas prices. (2) The PV 10 Value represents the discounted future net cash flows attributable to our proved oil and gas reserves before income tax, discounted at 10%. Although it is a non-GAAP measure, we believe that the presentation of the PV 10 Value is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account corporate future income taxes and our current tax structure. We use this measure when assessing the potential return on investment related to our oil and gas properties. The standardized measure of discounted future net cash flows represents the present value of future cash flows attributable to our proved oil and natural gas reserves after income tax, discounted at 10%. Oil (MBbls) Natural Gas (MMcf) Total (MMcfe) (1) % PV 10 Value (2) (000’s) % East Texas / North Louisiana: Logansport ..................................... 28 232,642 232,811 39.8% $ 169,649 16.1% Toledo Bend .................................... — 31,071 31,071 5.3% 31,503 3.0% Beckville ...................................... 142 29,762 30,616 5.2% 30,663 2.9% Waskom ....................................... 66 12,285 12,678 2.2% 13,435 1.3% Blocker ........................................ 47 11,864 12,146 2.1% 12,513 1.2% Mansfield ...................................... — 7,092 7,092 1.2% 4,934 0.5% Douglass ...................................... — 3,584 3,584 0.6% 2,007 0.2% Darco ......................................... 8 2,724 2,772 0.5% 2,403 0.2% Other ......................................... 114 10,301 10,988 1.9% 11,433 1.0% 405 341,325 343,758 58.8% 278,540 26.4% South Texas: Eagleville ...................................... 21,324 18,669 146,613 25.1% 688,227 65.3% Fandango ...................................... — 45,405 45,405 7.8% 32,520 3.1% Rosita ......................................... — 16,283 16,283 2.8% 10,315 1.0% Javelina ....................................... 34 7,552 7,757 1.3% 10,497 1.0% Las Hermanitas ................................. — 5,736 5,736 1.0% 5,124 0.5% Lopeno ........................................ 31 2,298 2,483 0.4% 4,624 0.4% Other ......................................... 113 2,622 3,299 0.5% 7,874 0.7% 21,502 98,565 227,576 38.9% 759,181 72.0% Other: San Juan Basin .................................. 8 2,796 2,846 0.5% 3,720 0.4% Other ......................................... 61 9,967 10,331 1.8% 12,554 1.2% 69 12,763 13,177 2.3% 16,274 1.6% Total ...................................... 21,976 452,653 584,511 100.0% 1,053,995 100.0% Discounted Future Income Taxes .................................................. (246,778) Standardized Measure of Discounted Future Cash Flows ............................... $ 807,217 Primary Operating Areas 8