5. Commitments and Contingencies

Total rental and lease expenses which were included in "General and administrative, net" on our accompanying consolidated statements of income were $3.2 million in 2006, $3.0 million in 2005, and $2.4 million in 2004. Rental and lease expenses which were included in "Lease operating cost" on our accompanying consolidated statements of income were $3.6 million in 2006, $1.9 million in 2005, and $2.2 million in 2004. Our remaining minimum annual obligations under non-cancelable operating lease commitments are $5.3 million for both 2007 and 2008, $3.3 million for both 2009 and 2010, $3.2 million for 2011, and $10.1 million thereafter or $30.6 million in the aggregate. The rental and lease expenses and remaining minimum annual obligations under non-cancelable operating lease commitments primarily relate to the lease of our office space in Houston, Texas which is a ten year lease and expires in 2015.

In the ordinary course of business, we have entered into agreements with drilling contractors for such services and tubing and pipe inventory commitments. The remaining commitments at December 31, 2006 for these services and materials totaled $28.9 million for 2007.

Through December 2006, we were the managing general partner of two private limited partnerships. Because we served as the general partner of these entities, under state partnership law we were contingently liable for the liabilities of these partnerships. These liabilities are not material for any of the periods presented in relation to the partnerships’ respective assets. As of December 31, 2006, these partnerships were dissolved.

In the ordinary course of business, we have been party to various legal actions, which arise primarily from our activities as operator of oil and natural gas wells. In management’s opinion, the outcome of any such currently pending legal actions will not have a material adverse effect on our financial position or results of operations.