2. Restatement of Previously Issued Financial Statements

As previously disclosed, we determined that instead of using updated oil and natural gas reserve estimates to calculate depreciation, depletion and amortization (“DD&A”) expense calculations looking back to the beginning of the applicable fiscal year, we instead should have used the updated oil and natural gas reserve estimates to calculate DD&A looking back to the beginning of the applicable current quarter. This methodology resulted in the understatement of DD&A expense and the overstatement of oil and gas properties, as well as the related income tax effects.

We concluded that the impact of applying the correct oil and natural gas reserve revision methodology to the DD&A calculation was materially different from our previously reported results under our historical practice. As a result, we are restating our consolidated financial statements for the periods impacted.

The table below sets forth the consolidated statements of operations, including the balances originally reported, corrections and the as restated balances for each fiscal year:

	Year Ended
	December 31, 2017									December 31, 2016
(In thousands except per share data)	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Depreciation, depletion and amortization	$	52,718		$	4,100		$	56,818		$	46,888		$	5,107		$	51,995
Impairment of oil and gas properties		33,413			—			33,413			33,893			1,677			35,570
Total expenses		125,409			4,100			129,509			115,695			6,784			122,479
Loss from operations		(31,341	)		(4,100	)		(35,441	)		(57,723	)		(6,784	)		(64,507	)
Loss before income taxes		(68,404	)		(4,100	)		(72,504	)		(66,930	)		(6,784	)		(73,714	)
Income tax benefit (expense)		29,741			(722	)		29,019			(27,405	)		2,419			(24,986	)
Net loss attributable to common stockholders		(42,631	)		(4,822	)		(47,453	)		(94,335	)		(4,365	)		(98,700	)
Net loss per common share
Basic	$	(1.92	)	$	(0.21	)	$	(2.13	)	$	(11.64	)	$	(0.53	)	$	(12.17	)
Diluted	$	(1.92	)	$	(0.21	)	$	(2.13	)	$	(11.64	)	$	(0.53	)	$	(12.17	)

The table below sets forth the consolidated balance sheets, including the balances originally reported, corrections and the as restated balances for each fiscal year:

	December 31, 2017									December 31, 2016
(In thousands)	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Assets
Oil and gas properties, net	$	571,163		$	(14,992	)	$	556,171		$	439,228		$	(10,892	)	$	428,336
Total assets		606,800			(14,992	)		591,808			459,109			(10,892	)		448,217
Liabilities and Stockholders' equity
Deferred tax liability	$	8,105		$	(3,336	)	$	4,769		$	38,020		$	(4,060	)	$	33,960
Total liabilities		391,454			(3,336	)		388,118			292,716			(4,060	)		288,656
Accumulated deficit		(102,180	)		(11,656	)		(113,836	)		(63,517	)		(6,834	)		(70,351	)
Total stockholders' equity		215,346			(11,656	)		203,690			166,395			(6,834	)		159,561

The table below sets forth the consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances for each fiscal year:

	Year Ended
	December 31, 2017									December 31, 2016
(In thousands)	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Cash flows from operating activities:
Net loss	$	(38,663	)	$	(4,822	)	$	(43,485	)	$	(94,335	)	$	(4,365	)	$	(98,700	)
Depreciation, depletion and amortization		52,718			4,100			56,818			46,888			5,107			51,995
Deferred taxes		(29,913	)		722			(29,191	)		22,007			(2,419	)		19,588
Impairment of oil and gas properties		33,413			—			33,413			33,893			1,677			35,570
Net cash provided by operating activities		43,446			—			43,446			24,269			—			24,269

The restatement had no impact on cash flows from investing activities or financing activities.

The table below sets forth the consolidated statements of shareholders' equity, including the balances originally reported, corrections and the as restated balances for each fiscal year:

				Total
	Accumulated			Stockholders'
(In thousands)	Deficit			Equity
Balance at December 31, 2015, as reported	$	30,818		$	182,966
Correction		(2,469	)		(2,469	)
Balance at December 31, 2015, as restated		28,349			180,497

Balance at December 31, 2016, as reported	$	(63,517	)	$	166,395
Correction		(6,834	)		(6,834	)
Balance at December 31, 2016, as restated		(70,351	)		159,561

Balance at December 31, 2017, as reported	$	(102,180	)	$	215,346
Correction		(11,656	)		(11,656	)
Balance at December 31, 2017, as restated		(113,836	)		203,690

In addition to the restated consolidated financial statements, the information contained in Notes 3,6,10 and 13 has been restated.