EAGLE FORD SHALE TREND

Our primary operational focus is on our Eagle Ford Shale position, which as of December 31, 2013, after giving effect to the Acquisition, is comprised of 25,864 gross (23,079 net) acres in seven Texas counties.  The Eagle Ford Shale is an oil and natural gas producing stratigraphic horizon of sedimentary rock that extends across portions of south Texas from the Mexican border into east Texas forming a band roughly 50 to 100 miles wide and 400 miles long. The Eagle Ford Shale is organically rich and calcareous, in places transitioning to an organic, argillaceous lime-mudstone. The formation lies between the deeper Buda limestone and the shallower Austin Chalk formation. Its thickness averages 200 feet, is found at depths ranging from as shallow as 4,000 feet to as deep as 13,000 feet, and in much of the deeper portions of the horizon is overpressured. Along the entire length of the Eagle Ford Shale the structural dip of the formation is consistently down to the south with relatively few, modestly-sized structural perturbations. As a result, depth of the horizon increases consistently southwards along with the thermal maturity of the formation. Where the formation is shallow, it is less thermally mature and therefore more oil prone, and as it gets deeper and becomes more thermally mature, the Eagle Ford Shale is more natural gas. The transition between being more oil prone and more natural gas prone includes an interval that typically produces wet gas and NGLs.

The first horizontal wells drilled specifically for the Eagle Ford Shale were drilled in 2008, leading to a discovery in La Salle County. Since then, the play has expanded significantly across a large portion of south Texas and then into east Texas.  We view our properties in the Eagle Ford Shale as being divided into three distinct regions within this play: Western Eagle Ford (comprised of Dimmit, La Salle and Frio Counties), Central Eagle Ford (comprised of Gonzales and Wilson Counties) and Eastern Eagle Ford (comprised of Brazos and Robertson Counties).  As of December 31, 2013, after giving effect to the Acquisition, 22,284 net acres were operated by us and 14,331 net acres were held by production, or HBP. Our Eagle Ford Shale net production for the year ended December 31, 2013, after giving effect to the Acquisition, was 2,871 Boe/d, comprised of 2,247 Bbls/d of oil, 288 Bbls/d of NGLs and 2,017 Mcf/d of natural gas, from 28 gross (26 net) producing wells.

As of December 31, 2013, after giving effect to the Acquisition, our Eagle Ford position had proved reserves of 22.1 MMBoe, of which 88% is crude oil and NGLs and 29% is proved developed producing, or PDP. The pro-forma PV-10 of our Eagle Ford proved reserves is $490.6 million, and 44% of such PV-10 is

PDP. Our total pro forma proved and probable Eagle Ford reserves are 32.6 MMBoe, of which 90% is crude oil and NGLs. The pro forma PV-10 of our proved and probable Eagle Ford reserves is $605.3 million.

We had a total of 136 gross (123 net) engineered horizontal Eagle Ford drilling locations on 17,571 of our 23,079 net Eagle Ford Shale acres as of December 31, 2013, after giving effect to the Acquisition, based on reserves assigned to such locations from the proved, probable and possible reserves reflected in our independent Reserve Reports. Approximately 94% of these pro forma locations are on leases operated by us, and 61 gross (54 net) locations are currently categorized as proved undeveloped, or PUD. We plan to drill 21 gross (21 net) wells in the Eagle Ford Shale trend during 2014, which pace would provide for 6.5 years of drilling inventory. As of the date hereof, four of these wells have been drilled, completed and fracture stimulated, with one additional well being drilled. We have 5,508 additional net acres in the Eagle Ford Shale trend with surrounding industry activity to which we have not assigned locations. We plan to continue evaluating this acreage and monitoring industry activity and believe the acreage may be prospective for additional locations.