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Lobo

Lobo Trend. We are a significant producer in the South Texas Lobo Trend, with 320 square miles of 3-D seismic and 255 operated producing wells. Our working interests range from 50% - 100%, but most of our acreage is 100% owned and operated. In 2008, we added additional acres adjacent to our existing acreage, adding additional drilling inventory. For the year ended December 31, 2008, our average net daily production from the Lobo trend was 46.1 MMcfe/d. We have identified approximately 170 potential drilling locations on our acreage. In 2008, we drilled 58 gross wells of which 48 were successful.

Discovered in 1973, the Lobo trend of South Texas is a complex, highly faulted sand that has produced over 8 Tcf of natural gas. The Lobo trend produces from tight sands with low permeabilities and high pressures at depths from 7,500 to 10,000 feet.


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