Table of Contents Index to Financial Statements In recent years, we have faced a challenging commodity price environment that has impacted our revenues and margins. As a result, we implemented a series of strategic initiatives, which were designed to reposition our portfolio to increase operational and financial flexibility, stabilize the Company financially and improve operational performance.  · The Hydrocarbon Value Chain. We believe that our vertical integration enhances our margins and provides us competitive advantages. For example, we own and operate drilling rigs and well stimulation equipment and are investing in a water transportation project in West Virginia, a portion of which is already in service and providing approximately $0.5 million in savings per well. These activities provide operational flexibility, help protect our margin, lower our well costs, minimize the risk of unavailability of these resources from third parties and capture additional value. · Technological Innovation. Our people constantly search for the next revolutionary technology and other operational advancements to capture greater value in unconventional hydrocarbon resource development. These developments – whether single, step-changing technologies or a combination of several incremental ones – can reduce finding and development costs and thus increase our margins. · Environmental Solutions and Policy Formation. We are a leader in identifying and implementing innovative solutions to unconventional hydrocarbon development to minimize the environmental and community impacts of our activities. We work extensively with governmental, non-governmental and industry stakeholders to develop responsible and cost-effective programs. We demonstrate that a company can operate responsibly and profitably, putting us in a better position to comply with new regulations as they evolve. Repositioning of Our Portfolio During 2018, we completed the next phase of strategic steps, designed to reposition our portfolio, which allowed us to sharpen our focus on our assets with the highest return. We believe that, in doing so, we will further strengthen our balance sheet and enhance our financial performance. These initiatives included: · Completing the sale of 100% of the equity in certain of our subsidiaries that conducted our operations in Arkansas, which were primarily focused on the Fayetteville Shale (the “Fayetteville Shale sale”); · Responding to commodity price changes by shifting focus to our liquids-rich portfolio in Southwest Appalachia; and · Utilizing a portion of funds realized from the Fayetteville Shale sale to reduce debt and return capital to shareholders. We intend to use the remaining funds to further develop our Appalachian Basin assets in order to accelerate the path to self-funding and for general corporate purposes. Financial Stability During 2018, we focused on enhancing our financial stability by: · Continuing to invest only in those projects that meet our rigorous economic hurdles at strip pricing, adjusting for basis differentials; · Demonstrating financial discipline by investing within our announced plan of cash flow; · Identifying and implementing structural, process and organizational changes to further reduce general and administrative costs; and · Simplifying our capital structure by consolidating the components of our previous credit arrangements into a single senior secured revolving credit facility while increasing liquidity, extending our maturity profile and reducing interest expense. Operational Improvement We improved the performance of our large asset portfolio with a primary focus on enhancing margins and investment returns. During 2018, we executed on this part of our business strategy by: · Lowering our costs through drilling, completions and operational efficiencies and optimizing gathering and transportation costs; · Focusing on delivering operational excellence with improved well productivity and economics from enhanced completion techniques, initiation of water infrastructure projects, optimization of surface equipment and managing reservoir drawdown; and 5