Our focus is to increase stockholder value by pursuing our corporate strategy, as follows:

Pursue concurrent development of our core areas

We plan to spend $350.0-$370.0 million on our drilling program during 2008. We expect that approximately 88% of the 2008 drilling capital expenditures will be incurred in our Rocky Mountain development and exploration projects. Many of our targeted development drilling locations are in reservoirs that demonstrate predictable geologic attributes and consistent reservoir characteristics, which typically lead to reliable drilling results.

Achieve consistent reserve growth through repeatable development

We have experienced significant reserve growth over the past four years through a combination of acquisitions and drilling successes. Although prior to 2006 the majority of our reserve and production growth came through acquisitions, in 2007 we achieved significant reserve and production increases as a result of our drilling program. We anticipate that the majority of our 2008 and future reserve and production growth will come through the execution of our drilling program on our large inventory of proved and unproved locations. Our development drilling inventory generally consists of locations in fields that demonstrate low variance in well performance, which leads to predictable and repeatable field development.

Our reserve estimates change continuously and we evaluate such reserve estimates on a quarterly basis, with independent engineering evaluation on an annual basis. Deviations in the market prices of both crude oil and natural gas and the effects of acquisitions, dispositions and exploratory development activities may have a significant effect on the quantities and future values of our reserves. Our reserves in the Rocky Mountain Region, where we plan to increasingly focus our drilling efforts and capital expenditures, are generally characterized as long-lived with low decline rates. We believe the balance of high-return Gulf Coast drilling and long-lived Rockies reserves will allow us to increase near term production rates and cash flow while building our reserve base and lengthening our average reserve life, which was 21.2 years as of December 31, 2007, based on 2007 production.

Maintain high percentage ownership and operational control over our asset base

As of December 31, 2007, we controlled approximately 871,000 net undeveloped acres, representing approximately 98% of our total net acreage position. We retain a high degree of operational control over our asset base, through a high average working interest or acting as the operator in our areas of significant activity. This provides us with controlling interests in a multi-year inventory of drilling locations, positioning us for continued reserve and production growth through our drilling operations. We plan to maintain this advantage to allow us to control the timing, level and allocation of our drilling capital expenditures and the technology and methods utilized in the planning, drilling and completion process. We believe this flexibility to opportunistically pursue exploration and development projects relating to our properties provides us with a meaningful competitive advantage. We also have a 50.0% interest in DHS Drilling Company (“DHS”), as well as a contractual right of priority access to DHS’ fifteen drilling rigs, which are deployed primarily in the Rocky Mountains.

Acquire and maintain acreage positions in high potential resource plays

We believe that our ongoing development of reserves in our core areas should be supplemented with exploratory efforts that may lead to new discoveries in the future. We continually evaluate our opportunities and pursue attractive potential opportunities that take advantage of our strengths. At December 31, 2007, we had significant undeveloped, unproved acreage positions in both the Columbia River Basin and the Central Utah Hingeline plays, each of which has gained substantial interest within the exploration and production sector due to their relatively unexplored nature and the potential for meaningful hydrocarbon recoveries. There are other mid-size and large independent exploration and production companies conducting drilling activities in these plays. We anticipate that meaningful drilling and completion results will become known in both areas during 2008.

Pursue a disciplined acquisition strategy in our core areas of operation

Historically we have been successful at growing through targeted acquisitions. Although our multi-year drilling inventory provides us with the opportunity to grow reserves and production organically without acquisitions, we continue to evaluate acquisition opportunities, primarily in our core areas of operation. In addition, we will continue to look to divest assets located in fully developed or non-core areas.

Maintain an active hedging program

We manage our exposure to commodity price fluctuations by hedging meaningful portions of our expected production through the use of derivatives, typically costless collars. The level of our hedging activity and the duration of the instruments employed depend upon our view of market conditions, available hedge prices and our operating strategy. We use hedges to limit the risk of fluctuating cash flows used to fund our capital expenditure program. We also typically use hedges in conjunction with acquisitions to achieve expected economic returns during the payout period. As of February 26, 2008 approximately 12.2 Bcfe of our anticipated production is hedged for 2008.

Experienced management and operational team with advanced exploration and development technology

Our senior management team has over 25 years of experience in the oil and gas industry, and has a proven track record of creating value both organically and through strategic acquisitions. Our management team is supported by an active board of directors with extensive experience in the oil and gas industry. Our experienced technical staff utilizes sophisticated geologic and 3-D seismic models to enhance predictability and reproducibility over significantly larger areas than historically possible. We also utilize multi-zone, multi-stage artificial stimulation (“frac”) technology in completing our wells to substantially increase near-term production, resulting in faster payback periods and higher rates of return and present values. Our team has successfully applied these techniques, normally associated with completions in the most advanced Rocky Mountain natural gas fields, to our largest Gulf Coast field to improve initial and ultimate production and returns.