Supplemental Oil and Gas Reserve Information — Unaudited

The reserve estimates at December 31, 2015, 2014 and 2013 presented in the table below are based on reports prepared by DeGolyer and MacNaughton, the Company’s independent reserve engineers, in accordance with the FASB’s authoritative guidance on oil and gas reserve estimation and disclosures. At December 31, 2015, 2014 and 2013, all of the Company’s oil and natural gas producing activities were conducted within the continental United States.

The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries and undeveloped locations are more imprecise than estimates of established proved producing oil and natural gas properties. Accordingly, these estimates are expected to change as future information becomes available.

Proved oil and natural gas reserves are the estimated quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e., prices and costs) existing at the time the estimate is made. Proved developed oil and natural gas reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made.

Estimated Quantities of Proved Oil and Natural Gas Reserves — Unaudited

The following table sets forth the Company’s estimated net proved, proved developed and proved undeveloped reserves at December 31, 2015, 2014 and 2013:



	Oil (MBbl)		Gas (MMcf)		MBoe
2013
Proved reserves
Beginning balance	128,090		91,530		143,345
Revisions of previous estimates	3,390		10,412		5,125
Extensions, discoveries and other additions	40,784		31,856		46,094
Sales of reserves in place	—		—		—
Purchases of reserves in place	37,459		49,631		45,731
Production	(11,133	)	(7,450	)	(12,375	)
Net proved reserves at December 31, 2013	198,590		175,979		227,920
Proved developed reserves, December 31, 2013	106,774		92,170		122,136
Proved undeveloped reserves, December 31, 2013	91,816		83,809		105,784
2014
Proved reserves
Beginning balance	198,590		175,979		227,920
Revisions of previous estimates	(23,069	)	(12,290	)	(25,117	)
Extensions, discoveries and other additions	80,855		70,449		92,596
Sales of reserves in place	(7,640	)	(4,850	)	(8,448	)
Purchases of reserves in place	1,546		1,523		1,799
Production	(14,883	)	(10,691	)	(16,664	)
Net proved reserves at December 31, 2014	235,399		220,120		272,086
Proved developed reserves, December 31, 2014	127,340		114,016		146,343
Proved undeveloped reserves, December 31, 2014	108,059		106,104		125,743
2015
Proved reserves
Beginning balance	235,399		220,120		272,086
Revisions of previous estimates	(75,458	)	(55,065	)	(84,635	)
Extensions, discoveries and other additions	38,962		46,072		46,640
Sales of reserves in place	—		—		—
Purchases of reserves in place	2,115		2,702		2,565
Production	(16,090	)	(14,001	)	(18,423	)
Net proved reserves at December 31, 2015	184,928		199,828		218,233
Proved developed reserves, December 31, 2015	127,445		120,789		147,577
Proved undeveloped reserves, December 31, 2015	57,483		79,039		70,656

Revisions of Previous Estimates

In 2015, the Company had a net negative revision of 84,635 MBoe, or 31% of the beginning of the year estimated net proved reserves balance. This net negative revision was primarily due to the removal of proved undeveloped reserves that are not economic at the lower oil price or are no longer aligned with the Company’s anticipated five-year drilling plan. This resulted in 259 gross (190.8 net) proved undeveloped locations with 71,945 MBoe of reserves being removed from the December 31, 2015 estimated net proved reserves balance, most significantly, removing proved undeveloped reserves outside of the Company’s core acreage within the Williston Basin that were uneconomic as of December 31, 2015 due to the lower oil price. The remaining negative revision is primarily attributable to the impact of price on producing life, partially offset by positive revisions due to performance and operating costs.

In 2014, the Company had a net negative revision of 25,117 MBoe, or 11% of the beginning of the year estimated net proved reserves balance. This net negative revision was primarily due to the removal of proved undeveloped reserves not aligned with the Company’s anticipated five-year drilling plan, which was adjusted to allocate a greater focus on higher rates-of-return areas of the Bakken and Three Forks formations. This resulted in 80 gross (56.2 net) proved undeveloped locations with 21,411 MBoe of reserves being removed from the December 31, 2014 estimated net proved reserves balance.

In 2013, the Company had a net positive revision of 5,125 MBoe, or 4% of the beginning of the year estimated net proved reserves balance. This net positive revision was the result of several immaterial changes, including well performances, working interests, operating costs and realized prices.

Extensions, Discoveries and Other Additions

In 2015, the Company had a total of 46,640 MBoe of additions due to extensions and discoveries. An estimated 20,362 MBoe of these extensions and discoveries were associated with new producing wells at December 31, 2015, with 100% of these reserves from wells producing in the Bakken or Three Forks formations. An additional 26,278 MBoe of proved undeveloped reserves were added in the Williston Basin associated with the Company’s 2015 operated and non-operated drilling program and anticipated five-year drilling plan, with 100% of these proved undeveloped reserves in the Bakken or Three Forks formations.

In 2014, the Company had a total of 92,596 MBoe of additions due to extensions and discoveries. An estimated 34,404 MBoe of these extensions and discoveries were associated with new producing wells at December 31, 2014, with 100% of these reserves from wells producing in the Bakken or Three Forks formations. An additional 58,192 MBoe of proved undeveloped reserves were added in the Williston Basin associated with the Company’s 2014 operated and non-operated drilling program and anticipated five-year drilling plan, with 100% of these proved undeveloped reserves in the Bakken or Three Forks formations.

In 2013, the Company had a total of 46,094 MBoe of additions due to extensions and discoveries. An estimated 22,190 MBoe of these extensions and discoveries were associated with new producing wells at December 31, 2013, with 100% of these reserves from wells producing in the Bakken or Three Forks formations. An additional 23,904 MBoe of proved undeveloped reserves were added in the Williston Basin associated with the Company’s 2013 operated and non-operated drilling program, with 100% of these proved undeveloped reserves in the Bakken or Three Forks formations.

Sales of Reserves in Place

In March 2014, the Company divested 8,448 MBoe of reserves associated with its non-operated properties sold in the Sanish Divestiture. In 2015 and 2013, the Company did not have any sales of reserves.

Purchases of Reserves in Place

In 2015 and 2014, the Company purchased estimated net proved reserves of 2,565 MBoe and 1,799 MBoe, respectively, from acquisitions of additional working interests in its existing properties in the Williston Basin. In 2013, the Company purchased 45,731 MBoe of estimated net proved reserves from properties acquired in the 2013 Acquisitions (see Note 6 — Acquisitions and Divestitures).

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves — Unaudited

The Standardized Measure represents the present value of estimated future net cash flows from estimated net proved oil and natural gas reserves, less future development, production, plugging and abandonment costs and income tax expenses, discounted at 10% per annum to reflect timing of future cash flows. Production costs do not include DD&A of capitalized acquisition, exploration and development costs.

The Company’s estimated net proved reserves and related future net revenues and Standardized Measure were determined using index prices for oil and natural gas, without giving effect to derivative transactions, and were held constant throughout the life of the properties. The unweighted arithmetic average first-day-of-the-month prices for the prior twelve months were $50.16/Bbl for oil and $2.63/MMBtu for natural gas, $95.28/Bbl for oil and $4.35/MMBtu for natural gas and $96.96/Bbl for oil and $3.66/MMBtu for natural gas for the years ended December 31, 2015, 2014 and 2013, respectively. These prices were adjusted by lease for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead. Future operating costs, production taxes and capital costs were based on current costs as of each year-end.

The following table sets forth the Standardized Measure of discounted future net cash flows from projected production of the Company’s estimated net proved reserves at December 31, 2015, 2014 and 2013:



	At December 31,
	2015			2014			2013
	(In thousands)
Future cash inflows	$	8,582,831		$	21,656,832		$	19,063,500
Future production costs	(3,842,517		)	(7,094,426		)	(5,473,767		)
Future development costs	(909,562		)	(2,563,062		)	(1,904,095		)
Future income tax expense	(225,662		)	(3,188,389		)	(3,628,977		)
Future net cash flows	3,605,090			8,810,955			8,056,661
10% annual discount for estimated timing of cash flows	(1,690,760		)	(4,829,294		)	(4,329,102		)
Standardized measure of discounted future net cash flows	$	1,914,330		$	3,981,661		$	3,727,559

The following table sets forth the changes in the Standardized Measure of discounted future net cash flows applicable to estimated net proved reserves for the periods presented:



	2015			2014			2013
	(In thousands)
January 1	$	3,981,661		$	3,727,559		$	2,259,897
Net changes in prices and production costs	(3,201,195		)	(588,212		)	254,979
Net changes in future development costs	150,333			(61,760		)	57,566
Sales of oil and natural gas, net	(477,755		)	(979,938		)	(857,540		)
Extensions	409,838			1,751,007			1,111,202
Discoveries	—			—			—
Purchases of reserves in place	14,378			38,035			858,382
Sales of reserves in place	—			(251,002		)	—
Revisions of previous quantity estimates	(946,729		)	(604,651		)	99,954
Previously estimated development costs incurred	216,981			249,926			373,912
Accretion of discount	548,141			548,690			346,068
Net change in income taxes	1,391,358			259,592			(774,910		)
Changes in timing and other	(172,681		)	(107,585		)	(1,951		)
December 31	$	1,914,330		$	3,981,661		$	3,727,559