Note 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 unaudited condensed consolidated financial statements for the periods impacted.

The table below sets forth the balances affected from the unaudited condensed consolidated statements of operations, including the balances originally reported, corrections and the as restated balances for each period:

	March 31, 2018									March 31, 2017
(In thousands except per share data)	As Previously Reported			Correction			As Restated			As Previously Reported			Correction			As Restated
Depreciation, depletion and amortization	$	15,563		$	(138	)	$	15,425		$	12,142		$	(168	)	$	11,974
Total expenses		27,290			(138	)		27,152			18,947			(168	)		18,779
Income (loss) from operations		9,402			138			9,540			(1,331	)		168			(1,163	)
Loss before income taxes		(19,783	)		138			(19,645	)		4,653			168			4,821
Income tax benefit (expense)		3,131			(22	)		3,109			(1,587	)		(116	)		(1,703	)
Net (loss) income attributable to common stockholders		(18,541	)		116			(18,425	)		3,066			52			3,118
Net loss per common share
Basic	$	(0.75	)	$	(0.00	)	$	(0.75	)	$	0.14		$	0.00		$	0.14
Diluted	$	(0.75	)	$	(0.00	)	$	(0.75	)	$	0.13		$	0.01		$	0.14

The table below sets forth the unaudited condensed consolidated balance sheet, including the balances originally reported, corrections and the as restated balances for the restated period:

	March 31, 2018
(In thousands)	As Previously Reported			Correction			As Restated
Assets
Accumulated depreciation, depletion and amortization	$	(274,630	)	$	(14,854	)	$	(289,484	)
Net property and equipment		604,485			(14,854	)		589,631
Total assets		624,518			(14,854	)		609,664
Liabilities and Stockholders' equity
Deferred tax liabilities, net		4,891			(3,314	)		1,577
Total long-term liabilities		351,446			(3,314	)		348,132
Accumulated deficit		(118,832	)		(11,540	)		(130,372	)
Total stockholders' equity		198,300			(11,540	)		186,760

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

	Three Months Ended
	March 31, 2018									March 31, 2017
(In thousands)	As Previously Reported			Correction			As Restated			As Previously Reported		Correction			As Restated
Cash flows from operating activities:
Net (loss) income	$	(16,652	)	$	116		$	(16,536	)	$	3,066	$	52		$	3,118
Depreciation, depletion and amortization		15,520			(138	)		15,382			12,122		(168	)		11,954
Deferred taxes		(3,213	)		22			(3,191	)		1,591		116			1,707
Net cash provided by operating activities		9,847			—			9,847			12,968		—			12,968

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

The table below sets forth the unaudited condensed consolidated statement of stockholders’ equity, including the balances originally reported, corrections and the as restated balances for the period:

				Total
	Accumulated			Stockholders'
(In thousands)	Deficit			Equity
Balance at March 31, 2018, as previously reported	$	(118,832	)	$	198,300
Correction		(11,540	)		(11,540	)
Balance at March 31, 2018, as restated		(130,372	)		186,760

In addition to the restated consolidated financial statements, the information contained in the Note 3 has been restated.