1A. Restatement of Previously Issued Consolidated Financial Statements

Overview. In connection with the preparation of our financial statements for the quarter ended September 30, 2014, we determined that the ceiling test calculation we had prepared at December 31, 2013, March 31, 2009 and December 31, 2008, to determine whether the net book value of the Company's oil and gas properties exceed the ceiling, incorrectly included the deferred income tax effect of the Company's asset retirement obligations when computing the ceiling test limitation of its oil and natural gas properties under the full-cost method of accounting. The Company determined that the error caused a material overstatement of its full-cost ceiling test write-down of oil and gas properties in periods prior to 2014, more specifically in the fourth quarter of 2013, in the first quarter of 2009 and the fourth quarter of 2008, including associated depletion for all periods presented. As a result of this error, we are restating our audited consolidated financial statements for the years ended December 31, 2013, 2012 and 2011 and our unaudited condensed consolidated financial information for the quarters ended March 31, 2013, June 30, 2013, September 30, 2013, and December 31, 2013.

As of December 31, 2013, the correction of this error increased the Company's net oil and gas property balances by approximately $49 million, increased net deferred tax liabilities by approximately $18 million, and increased retained earnings by approximately $31 million. Approximately $15 million of the increase in retained earnings is related to periods prior to 2013, more specifically to the first quarter of 2009 and the fourth quarter of 2008. For the year ended December 31, 2013, the correction of the ceiling test error resulted in a decrease in our ceiling-test write-down for the year ended December 31, 2013 of approximately $27 million, which was partially offset by an increase in our depreciation, depletion and amortization expense for full year 2013 of approximately $1 million. These corrections increased net income for the year ended December 31, 2013 by approximately $16 million (net of an increase to the income tax benefit of approximately $9 million for the period).

Along with restating our financial statements to correct the error discussed above, we have recorded adjustments for certain previously identified immaterial accounting errors related to the periods covered by this Form 10-K/A. When these financial statements were originally issued, we assessed the impact of these errors and concluded that they were not material to our financial statements for the each of the years ended December 31, 2013, 2012, and 2011, and reported fiscal quarters within each of these years. However, in conjunction with our need to restate our financial statements as a result of the error noted above, we have determined that it would be appropriate to make adjustments for all such previously unrecorded adjustments in this Form 10-K/A.

The combined impacts of all adjustments to the applicable line items in our audited consolidated financial statements for the periods covered by this Form 10K-A are provided in the tables below.

Financial Statement Presentation. In addition to the restatement of our consolidated financial statements, we have also restated the following items to reflect certain changes noted above.


•	Note 1. Summary of Significant Accounting Policies


•	Note 2. Earnings Per Share


•	Note 3. Provision for Income Taxes


•	Note 6. Share-Based Compensation


•	Supplemental Information – Capitalized Costs


•	Supplemental Information – Selected Quarterly Financial Data (Unaudited)

The following tables present the effect of the correction of the ceiling test calculation error and other adjustments on selected line items of our previously reported consolidated financial statements for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	Consolidated Balance Sheet as of December 31, 2013
	(As Reported)			Adjustments			(As Restated)
Accounts Receivable	$	70,897		$	—		$	70,897
Deferred Tax Asset	4,974			5,741			10,715
Total Current Assets	86,748			5,741			92,489
Accumulated depreciation, depletion, and amortization	(3,174,453		)	49,171			(3,125,282		)
Property and Equipment, Net	2,539,646			49,171			2,588,817
Total Assets	2,643,593			54,912			2,698,505

Accounts payable and accrued liabilities	83,361			(1,043		)	82,318
Total Current Liabilities	177,076			(1,043		)	176,033
Deferred Tax Liabilities	217,384			23,821			241,205
Other Long-Term Liabilities	10,324			—			10,324
Additional paid-in capital	761,972			270			762,242
Retained earnings	283,380			31,864			315,244
Total Stockholders’ Equity	1,033,216			32,134			1,065,350
Total Liabilities and Stockholders’ Equity	2,643,593			54,912			2,698,505



	Consolidated Balance Sheet as of December 31, 2012
	(As Reported)			Adjustments		(As Restated)
Accounts Receivable (2)	$	67,318		$	3,885	$	71,203
Deferred Tax Asset (1)	5,679			2,583		8,262
Total Current Assets	80,537			6,468		87,005
Accumulated depreciation, depletion, and amortization (1)	(2,847,773		)	22,934		(2,824,839		)
Property and Equipment, Net	2,345,020			22,934		2,367,954
Total Assets	2,444,061			29,402		2,473,463

Accounts payable and accrued liabilities	75,378			1,932		77,310
Total Current Liabilities	177,480			1,932		179,412
Deferred Tax Liabilities (1)	223,243			11,250		234,493
Other Long-Term Liabilities	9,901			297		10,198
Additional paid-in capital	747,868			649		748,517
Retained earnings (1)	302,412			15,274		317,686
Total Stockholders’ Equity	1,036,860			15,923		1,052,783
Total Liabilities and Stockholders’ Equity	2,444,061			29,402		2,473,463

(1) The adjustments column includes the impact of correcting the error in the ceiling test write-down as of December 31, 2012. Included in these amounts are approximately $23 million related to Accumulated depreciation, depletion, and amortization, $9 million related to the net deferred tax liabilities and $15 million related to retained earnings.

(2) The adjustments column includes the impact of a $2.9 million revenue adjustment related to the 2012 finalization of a property unitization which was originally recorded in 2013.



	Consolidated Statement of Operations for the year ended December 31, 2013
	(As Reported)			Adjustments			(As Restated)
Oil and Gas Sales (2)	$	588,541		$	(3,312	)	$	585,229
Total Revenues	587,713			(3,312		)	584,401
General and Administrative, net	45,802			(379		)	45,423
Depreciation, depletion, and amortization	252,043			726			252,769
Lease operating cost	101,611			(1,880		)	99,731
Transportation and gas processing	22,336			(1,292		)	21,044
Severance and other taxes	42,252			473			42,725
Write-down of oil and gas properties	73,911			(26,963		)	46,948
Total Costs and Expenses	613,518			(29,315		)	584,203
Income (Loss) from Continuing Operations Before Income Taxes	(25,805		)	26,003			198
Provision (Benefit) for Income Taxes	(6,773		)	9,413			2,640
Income (Loss) from Continuing Operations	(19,032		)	16,590			(2,442		)
Net Income (Loss)	(19,032		)	16,590			(2,442		)

Basic EPS: Income (Loss) from Continuing Operations	$	(0.44	)	$	0.38		$	(0.06	)
Basic EPS: Net Income (Loss)	$	(0.44	)	$	0.38		$	(0.06	)

Diluted EPS: Income (Loss) from Continuing Operations	$	(0.44	)	$	0.38		$	(0.06	)
Diluted EPS: Net Income (Loss)	$	(0.44	)	$	0.38		$	(0.06	)

(2) The adjustments column includes the impact of a $2.9 million revenue adjustment related to the 2012 finalization of a property unitization which was originally recorded in 2013.



	Consolidated Statements of Operations for the year ended December 31, 2012
	(As Reported)		Adjustments			(As Restated)
Oil and Gas Sales (2)	$	554,194	$	4,196		$	558,390
Total Revenues	557,290		4,196			561,486
General and Administrative, net	46,778		319			47,097
Depreciation, depletion, and amortization	247,178		2,166			249,344
Lease operating cost	97,295		540			97,835
Transportation and gas processing	18,175		1,292			19,467
Severance and other taxes	48,862		(1,316		)	47,546
Total Costs and Expenses	520,712		3,001			523,713
Income (Loss) from Continuing Operations Before Income Taxes	36,578		1,195			37,773
Provision (Benefit) for Income Taxes	15,639		433			16,072
Income (Loss) from Continuing Operations	20,939		762			21,701
Net Income (Loss)	20,939		762			21,701

Basic EPS: Income (Loss) from Continuing Operations	$	0.49	$	0.02		$	0.51
Basic EPS: Net Income (Loss)	$	0.49	$	0.02		$	0.51

Diluted EPS: Income (Loss) from Continuing Operations	$	0.48	$	0.02		$	0.50
Diluted EPS: Net Income (Loss)	$	0.48	$	0.02		$	0.50

(2) The adjustments column includes the impact of a $2.9 million revenue adjustment related to the 2012 finalization of a property unitization which was originally recorded in 2013.



	Consolidated Statements of Operations for the year ended December 31, 2011
	(As Reported)		Adjustments			(As Restated)
Oil and Gas Sales	$	602,341	$	(1,322	)	$	601,019
Total Revenues	599,131		(1,322		)	597,809
General and Administrative, net	45,362		(37		)	45,325
Depreciation, depletion, and amortization	221,230		1,851			223,081
Severance and other taxes	52,508		843			53,351
Total Costs and Expenses	464,027		2,657			466,684
Income (Loss) from Continuing Operations Before Income Taxes	135,104		(3,979		)	131,125
Provision (Benefit) for Income Taxes	50,494		(1,440		)	49,054
Income (Loss) from Continuing Operations	84,610		(2,539		)	82,071
Net Income (Loss)	98,821		(2,539		)	96,282

Basic EPS: Income (Loss) from Continuing Operations	$	2.00	$	(0.06	)	$	1.94
Basic EPS: Net Income (Loss)	$	2.33	$	(0.06	)	$	2.27

Diluted EPS: Income (Loss) from Continuing Operations	$	1.97	$	(0.06	)	$	1.91
Diluted EPS: Net Income (Loss)	$	2.30	$	(0.06	)	$	2.24



	Consolidated Statements of Comprehensive Income for the year ended December 31,
	2013								2012						2011
	(As Reported)			Adjustments		(As Restated)			(As Reported)		Adjustments		(As Restated)		(As Reported)		Adjustments			(As Restated)
Net Income (Loss)	$	(19,032	)	$	16,590	$	(2,442	)	$	20,939	$	762	$	21,701	$	98,821	$	(2,539	)	$	96,282
Comprehensive Income (Loss)	(19,032		)	16,590		(2,442		)	20,939		762		21,701		98,959		(2,539		)	96,420



	Consolidated Statements of Cash Flows for the year ended December 31, 2013
	(As Reported)	Adjustments	(As Restated)
Net income (loss)	$(19,032)	$16,590	$(2,442)
Write-down of oil and gas properties	73,911	(26,963)	46,948
Depreciation, depletion, and amortization	252,043	726	252,769
Deferred income taxes	(6,766)	9,413	2,647
Share-based compensation expense	10,478	(379)	10,099
Other	(5,146)	(297)	(5,443)
(Increase) decrease in accounts receivable	(5,779)	3,885	(1,894)
Increase (decrease) in accounts payable and accrued liabilities	5,582	(2,975)	2,607
Cash provided by operating activities – continuing operations	311,447	—	311,447



	Consolidated Statements of Cash Flows for the year ended December 31, 2012
	(As Reported)			Adjustments			(As Restated)
Net income (loss)	$	20,939		$	762		$	21,701
Depreciation, depletion, and amortization	247,178			2,166			249,344
Deferred income taxes	16,798			433			17,231
Share-based compensation expense	13,476			319			13,795
(Increase) decrease in accounts receivable	3,235			(4,769		)	(1,534		)
Increase (decrease) in accounts payable and accrued liabilities	(2,102		)	1,089			(1,013		)
Cash provided by operating activities – continuing operations	314,606			—			314,606



	Consolidated Statements of Cash Flows for the year ended December 31, 2011
	(As Reported)			Adjustments			(As Restated)
Net income (loss)	$	98,821		$	(2,539	)	$	96,282
Depreciation, depletion, and amortization	221,230			1,851			223,081
Deferred income taxes	48,995			(1,440		)	47,555
Share-based compensation expense	12,625			330			12,955
(Increase) decrease in accounts receivable	(12,625		)	1,322			(11,303		)
Increase (decrease) in accounts payable and accrued liabilities	10,134			476			10,610
Cash provided by operating activities – continuing operations	373,058			—			373,058