A healthy balance involves a portfolio of investments whose specific mix varies as circumstances change. Our tandem approach to reserves growth through drilling and/or acquisitions is one such example. While we maintain a balance between the two over the long term, during some years we’ve grown 100% through drilling and in other years 100% through acquisitions, depending on product prices and strategic opportunities. Using inherent industry cycles to our advantage, we generally focused on organic growth through drilling when prices were high and on strategic growth through acquisitions when prices were low. From 2005 through 2007, however, our emphasis on acquisitions and drilling has been more evenly split on an annual basis as the pricing environment has remained strong and U.S. oil and gas resources have matured. In this environment, we focused on drilling while simultaneously seeking strategic acquisitions of producing properties that would benefit from economies of scale and that take advantage of our technological skills honed in specific types of formations.

The composition of our reserves is another area where we create value by building a balanced portfolio. As oil prices have risen over the past few years, we’ve shifted our emphasis to hydrocarbon liquids, with crude oil and natural gas liquids comprising 57% of our year-end domestic reserves in 2007 and natural gas comprising 43%. In 1998 when the average price we received for a barrel of oil was $11.86—far below the lofty heights of today—our domestic reserves were 81% natural gas.

Our balance between proved developed, proved undeveloped, probable, and possible reserves represent the balance struck between immediate rewards and building for the future. At year-end 2007, our domestic proved reserves were 48% developed and 52% undeveloped, demonstrating our commitment to maintaining cash flow while laying the foundation for long-term growth.

For 2008, our strategic goals for strengthening shareholder value include increasing production from continuing operations by 10% to 15% and proved reserves from continuing operations by 5% to 9% over 2007 levels. Additionally, we aim to improve our margins by controlling both finding and development costs and operating costs relative to oil and gas prices. We expect the increased concentration of our operations in anchor fields in Louisiana and Texas to enable us to better leverage our technical skills while more efficiently controlling costs.

Our level of operational control will also help us in this regard. As 2008 began, we had operational control of 96% of our proved oil and natural gas reserves base, which will allow us to more effectively manage production, allocate capital, pursue field development, and ultimately create value for our shareholders.

Since inception, no cash dividends have been declared on our common stock. Cash dividends are restricted under the terms of our credit agreements, as discussed in Note 4 to the consolidated financial statements, and we presently intend to continue a policy of using retained earnings for expansion of our business.

We had approximately 231 stockholders of record as of December 31, 2007.