The following information about the Company's oil and natural gas producing activities is presented in accordance with FASB ASC Topic 932, Oil and Gas Reserve Estimation and Disclosures:

On January 6, 2010, the FASB issued an ASU updating oil and gas reserve estimation and disclosure requirements. The ASU amends FASB ASC 932 to align the reserve calculation and disclosure requirements with the requirements in SEC Release No. 33-8995. SEC Release No. 33-8995, amends oil and gas reporting requirements under Rule 4-10 of Regulation S-X and Industry Guide 2 in Regulation S-K revising oil and gas reserves estimation and disclosure requirements. The rules include changes to pricing used to estimate reserves, the ability to include non-traditional resources in reserves, the use of new technology for determining reserves and permitting disclosure of probable and possible reserves. The primary objectives of the revisions are to increase the transparency and information value of reserve disclosures and improve comparability among oil and gas companies.

Our policies and practices regarding internal controls over the recording of reserves is structured to objectively and accurately estimate our oil and gas reserves quantities and present values in compliance with the SEC's regulations and GAAP. The Vice President – Reservoir Engineering & Development is primarily responsible for overseeing the preparation of the Company's reserve estimates by our independent engineers, Netherland, Sewell & Associates, Inc. The Vice President – Reservoir Engineering & Development has a Bachelor and Master of Science degree in Petroleum Engineering and is a licensed Professional Engineer with over 17 years of experience. The Company's internal controls over reserve estimates include reconciliation and review controls, including an independent internal review of assumptions used in the estimation.

All of the information regarding reserves in this annual report is derived from the report of Netherland, Sewell & Associates, Inc. The report of Netherland, Sewell & Associates, Inc. is included as an Exhibit to this annual report. The principal engineer at Netherland, Sewell & Associates, Inc. responsible for preparing our reserve estimates has a Bachelor of Science degree in Mechanical Engineering and is a licensed Professional Engineer with over 25 years of experience, including significant experience throughout the Rocky Mountain basins.

The Company's proved undeveloped reserves are limited to economic locations that are scheduled in accordance with the Company's current planning and budgeting process. The inventory of bookable locations available to the Company is substantially larger than the amount ultimately included in the Company's year-end reserves. From time to time, the Company may adjust the inventory and schedule of its proved undeveloped locations in response to changes in capital budget, economics, new opportunities in the portfolio or resource availability. The Company has not scheduled any proved undeveloped reserves beyond five years nor does it have any proved undeveloped locations that have been part of its inventory of proved undeveloped locations for over five years.

The determination of oil and natural gas reserves is complex and highly interpretive. Assumptions used to estimate reserve information may significantly increase or decrease such reserves in future periods. The estimates of reserves are subject to continuing changes and, therefore, an accurate determination of reserves may not be possible for many years because of the time needed for development, drilling, testing, and studies of reservoirs.

In estimating proved reserves and future revenue as of December 31, 2011, the Company's independent reserve engineer, Netherland, Sewell & Associates, Inc., used technical and economic data including, but not limited to, well logs, geologic maps, seismic data, well test data, production data, historical price and cost information and property ownership interests. The reserves were estimated using deterministic methods; these estimates were prepared in accordance with generally accepted petroleum engineering and evaluation principles. Standard engineering and geoscience methods, such as performance analysis, volumetric analysis and analogy, that were considered to be appropriate and necessary to establish reserve quantities and reserve categorization that conform to SEC definitions and guidelines, were also used. In evaluating the information at their disposal, Netherland, Sewell & Associates, Inc. excluded from their consideration all matters as to which the controlling interpretation may be legal or accounting, rather than engineering and geoscience. As in all aspects of oil and natural gas evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, Netherland, Sewell & Associates, Inc.'s conclusions necessarily represent only informed professional judgment.

The following unaudited tables as of December 31, 2011, 2010, and 2009 are based upon estimates prepared by Netherland, Sewell & Associates, Inc. in reports dated February 1, 2012, January 31, 2011, and January 27, 2010, respectively. These are estimated quantities of proved oil and natural gas reserves for the Company and the changes in total proved reserves as of December 31, 2011, 2010 and 2009. All such reserves are located in the Green River Basin in Wyoming and the Appalachian Basin of Pennsylvania.

Since January 1, 2011, no crude oil or natural gas reserve information has been filed with, or included in any report to, any federal authority or agency other than the SEC and the Energy Information Administration (“EIA”) of the U.S. Department of Energy. We file Form 23, including reserve and other information, with the EIA.

	United States
	Oil	Natural Gas
	(MBbls)	(MMcf)
Reserves, December 31, 2008	27,007	3,355,788
Extensions, discoveries and additions	5,902	758,659
Production	(1,320)	(172,189)
Revisions	(2,404)	(205,657)
Reserves, December 31, 2009	29,185	3,736,601
Extensions, discoveries and additions	7,369	1,055,047
Production	(1,334)	(205,613)
Revisions	(3,536)	(385,880)
Reserves, December 31, 2010	31,684	4,200,155
Extensions, discoveries and additions	4,592	1,112,147
Production	(1,408)	(236,832)
Revisions	(1,787)	(296,916)

Reserves, December 31, 2011	33,081	4,778,554

	United States
	Oil	Natural Gas
	(MBbls)	(MMcf)
Proved:
Developed	11,462	1,412,562
Undeveloped	15,546	1,943,225
Total Proved - 2008	27,007	3,355,788

Developed	11,627	1,541,813
Undeveloped	17,558	2,194,788
Total Proved - 2009	29,185	3,736,601

Developed	11,013	1,678,697
Undeveloped	20,671	2,521,458
Total Proved - 2010	31,684	4,200,155

Developed	11,794	1,973,391
Undeveloped	21,287	2,805,163
Total Proved - 2011	33,081	4,778,554

During 2011, substantially all of our extensions and discoveries in the proved developed category were attributable to wells drilled in 2011, and substantially all of our extensions and discoveries in the proved undeveloped category were attributable to our ongoing drilling activities and its associated effect on our proved undeveloped reserves estimates.

The following table sets forth a standardized measure of the estimated discounted future net cash flows attributable to the Company's proved natural gas reserves. Natural gas prices have fluctuated widely in recent years. The calculated weighted average sales prices utilized for the purposes of estimating the Company's proved reserves and future net revenues at December 31, 2011, 2010 and 2009 was $4.035, $4.05 and $3.04 per Mcf, respectively, for natural gas and $88.19, $68.93 and $52.18 per barrel, respectively, for condensate, based upon the average of the price in effect on the first day of the month for the preceding twelve month period.

The future production and development costs represent the estimated future expenditures to be incurred in developing and producing the proved reserves, assuming continuation of existing economic conditions. Future income tax expense was computed by applying statutory income tax rates to the difference between pretax net cash flows relating to the Company's proved reserves and the tax basis of proved properties and available operating loss carryovers.

		As of December 31,
		2011		2010		2009
Future cash inflows	$	22,196,913	$	19,186,072	$	12,870,816
Future production costs		(6,113,282)		(5,253,509)		(3,916,222)
Future development costs		(4,294,375)		(3,052,843)		(2,249,993)
Future income taxes		(3,340,516)		(3,198,413)		(1,998,114)
Future net cash flows		8,448,740		7,681,307		4,706,487
Discount at 10%		(4,652,684)		(4,155,739)		(2,679,787)
Standardized measure of discounted
future net cash flows	$	3,796,056	$	3,525,568	$	2,026,700

The estimate of future income taxes is based on the future net cash flows from proved reserves adjusted for the tax basis of the oil and gas properties but without consideration of general and administrative and interest expenses.

D. SUMMARY OF CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS:

		December 31,
		2011		2010		2009
Standardized measure, beginning	$	3,525,568	$	2,026,700	$	3,017,686
Net revisions of previous quantity estimates		(446,677)		(592,919)		(216,946)
Extensions, discoveries and other changes		1,654,793		1,601,154		782,763
Changes in future development costs		(741,658)		(606,449)		(103,056)
Sales of oil and gas, net of production costs		(896,434)		(787,409)		(513,958)
Net change in prices and production costs		108,108		1,501,002		(1,772,644)
Development costs incurred during the
period that reduce future development costs		464,880		404,402		395,092
Accretion of discount		499,358		288,713		444,387
Net changes in production rates and other		(338,982)		297,957		(572,380)
Net change in income taxes		(32,900)		(607,583)		565,756
Aggregate changes		270,488		1,498,868		(990,986)
Standardized measure, ending	$	3,796,056	$	3,525,568	$	2,026,700

There are numerous uncertainties inherent in estimating quantities of proved reserves and projected future rates of production and timing of development expenditures, including many factors beyond the control of the Company. The reserve data and standardized measures set forth herein represent only estimates. Reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates of different engineers often vary. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of such estimates. Accordingly, reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered. Further, the estimated future net revenues from proved reserves and the present value thereof are based upon certain assumptions, including geologic success, prices, future production levels and costs that may not prove correct over time. Predictions of future production levels are subject to great uncertainty, and the meaningfulness of such estimates is highly dependent upon the accuracy of the assumptions upon which they are based. Historically, oil and natural gas prices have fluctuated widely.


			Years Ended December 31,
			2011		2010		2009
	United States

	Acquisition costs - unproved properties, net	$	91,983	$	472,339	$	33,176
	Exploration		48,998		249,029		102,217
	Development		1,372,805		855,110		605,958
	Total	$	1,513,786	$	1,576,478	$	741,351


F. RESULTS OF OPERATIONS FOR OIL AND GAS PRODUCING ACTIVITIES:

			Years Ended December 31,
			2011		2010		2009
	United States

	Oil and gas revenue	$	1,101,796	$	979,386	$	666,762
	Production expenses		(205,363)		(191,978)		(152,804)
	Depletion and depreciation		(346,394)		(241,796)		(201,826)
	Write-down of proved oil and gas properties		-		-		(1,037,000)
	Income taxes		(197,464)		(193,692)		254,429
	Total	$	352,575	$	351,920	$	(470,439)


G. CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES:

			December 31,
			2011		2010
	Developed Properties:

	Acquisition, equipment, exploration, drilling and
	environmental costs	$	5,974,604	$	4,575,222
	Less: accumulated depletion, depreciation and amortization		(2,322,982)		(1,985,799)
			3,651,622		2,589,423
	Unproven Properties:

	Acquisition and exploration costs not being amortized		537,526		486,247
		$	4,189,148	$	3,075,670