Strategy

Our primary business objective is to increase reserves, production and cash flows at an attractive return on invested capital. Our business strategy is currently focused on exploiting long-life, unconventional oil, condensate, NGL and natural gas reserves from the Eagle Ford Shale and the TMS, as well as a diversification into the midstream elements of the market that adds value to our operations. Key elements of our business strategy include:

1.  Actively Develop Our Eagle Ford Positions

Our 2016 capital budget is estimated to be approximately  $200 to $250 million, which is focused predominately on the development of our Eagle Ford Shale acreage. As of December 31, 2015, we were producing from 621 wells and have identified over 2,900 net locations for potential future drilling in our Eagle Ford Shale area that will be our primary targets in the near term. In 2016, we plan to invest between $180 and $220 million on development drilling and completion in the Eagle Ford Shale to spud 52 net wells and complete approximately 55 net wells. This represents approximately 100% of our 2016 drilling and completion budget and 89% of our total 2016 capital budget.

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2.  Enhance Returns by Focusing on Operational and Cost Efficiencies

We are focused on continuous improvement of our operating measures and have significant experience in successfully converting early-stage resource opportunities into cost-efficient development projects. We believe the magnitude and concentration of our acreage within our core project areas provide us with the opportunity to capture economies of scale, including the ability to drill multiple wells from a single drilling pad, utilizing centralized production and fluid handling facilities and reducing the time and cost of rig mobilization.

3.   Add Value Through Owning Midstream Functions

The Company’s Marketing & Midstream Group (the “Marketing and Midstream Group”) was formed in 2014 to more effectively manage our expanding midstream business segment. Our goal is to participate in the midstream function in order to capture more of the hydrocarbon value chain. The Marketing and Midstream Group focuses on projects that serve our production and add optionality to end markets which improves our netback price. As a secondary focus, the Marketing and Midstream Group also evaluates midstream projects that are accretive to the Company and add scale and diversification to our midstream portfolio.

4.   Adopt and Employ Leading Drilling and Completion Techniques

We are focused on enhancing our drilling and completion techniques to maximize recovery of reserves. Industry techniques with respect to drilling and completion have significantly evolved over the last several years, resulting in increased initial production rates and recoverable hydrocarbons per well through the implementation of longer laterals and more tightly spaced fracture stimulation stages. We continuously evaluate industry drilling results and monitor the results of other operators to improve our operating practices, and we expect our drilling and completion techniques will continue to evolve.

5.   Maintain Substantial Financial Liquidity and Flexibility

As of December 31, 2015, we had approximately $435 million of cash. We believe that this strong liquidity position combined with our cash flow from operations will allow us to maintain our total production of hydrocarbons at the approximate levels we reported for 2015. We plan to continuously evaluate our level of operating activity in light of both actual commodity prices and changes we are able to make to our costs of operations and make further adjustments to our capital spending program as appropriate. In addition, we expect to continue to regularly review acquisition opportunities from third parties.