Rental and lease expenses which were included in "General
and administrative, net" on our accompanying consolidated statements of
income were $3.7 million in 2007, $2.7 million in 2006, and $2.5 million in
2005. Rental and lease expenses which were included in "Lease operating
cost" on our accompanying consolidated statements of income were $6.7
million in 2007, $3.6 million in 2006, and $1.9 million in 2005. Our
remaining minimum annual obligations under non-cancelable operating lease
commitments are $7.7 million for 2008, $4.9 million for 2009 and $3.4
million for 2010, $3.2 million for both 2011 and 2012, and $7.0 million
thereafter or $29.3 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, 2007 for
these services and materials totaled $34.2 million for 2008.
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.
