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   &lt;div style="font-family: 'Times New Roman',Times,serif"&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;b&gt;Note D. &lt;/b&gt;&lt;b&gt;&lt;i&gt;Business Combinations&lt;/i&gt;&lt;/b&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&lt;b&gt;&lt;i&gt;Wolfberry acquisitions. &lt;/i&gt;&lt;/b&gt;In December&amp;#160;2009, together with the acquisition of related additional
   interests that closed in 2010, the Company closed two acquisitions (the &amp;#8220;Wolfberry Acquisitions&amp;#8221;)
   of interests in producing and non-producing assets in the Wolfberry play in the Permian Basin for
   approximately $270.7&amp;#160;million. The Wolfberry Acquisitions were primarily funded with borrowings
   under the Company&amp;#8217;s credit facility. See Note J. The Company&amp;#8217;s 2009 results of operations do not
   include any production, revenues or costs from the Wolfberry Acquisitions.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The following table represents the allocation of the total purchase price of the Wolfberry
   Acquisitions to the acquired assets and liabilities. The allocation represents the fair values
   assigned to each of the assets acquired and liabilities assumed:
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   &lt;div style="margin-left:15px; text-indent:-15px"&gt;&lt;b&gt;Fair value of the Wolfberry Acquisitions&amp;#8217; net assets:&lt;/b&gt;
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   &lt;div style="margin-left:30px; text-indent:-15px"&gt;Proved oil and natural gas properties
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   &lt;div style="margin-left:60px; text-indent:-15px"&gt;Net purchase price
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      <ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 141
 -Paragraph 51, 52

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Emerging Issues Task Force (EITF)
 -Number 88-16

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 141R
 -Paragraph 67-73

Reference 4: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 141R
 -Paragraph F4
 -Subparagraph e
 -Appendix F

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