Restatement of Previously Issued Condensed 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, in this Form 10-Q/A we are restating our unaudited condensed consolidated financial information for the quarters ended March 31, 2014 and 2013.

As of March 31, 2014, the correction of this error principally 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. The correction of the error also resulted in an increase in our depreciation, depletion and amortization expense for the three months ended March 31, 2014 and 2013 of approximately $0.7 million and $0.3 million, respectively, and decreases net income for the three months ended March 31, 2014 and 2013 by approximately $0.4 million and $0.2 million, respectively (net of a decrease to the income tax provision for the three months ended March 31, 2014 and 2013, of approximately $0.3 million and $0.1 million, respectively).

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-Q/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 three months ended March 31, 2014 or 2013. 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 within this Form 10-Q/A for all such previously unrecorded adjustments.

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

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


•	Note 2. Summary of Significant Accounting Policies


•	Note 3. Share-Based Compensation


•	Note 4. Earnings Per Share

The following tables present the effect of the correction of the error and other adjustments on selected line items of our previously reported unaudited condensed consolidated financial statements for the three months ended March 31, 2014 and 2013 (in thousands):



	Consolidated Balance Sheet as of March 31, 2014
	(As Reported)			Adjustments			(As Restated)
Accounts Receivable	$	73,082		$	499		$	73,581
Deferred tax asset	5,572			5,280			10,852
Other Current Assets	10,081			(355		)	9,726
Total Current Assets	88,826			5,424			94,250
Accumulated depreciation, depletion, and amortization (1)	(3,236,443		)	48,205			(3,188,238		)
Property and Equipment, Net	2,576,862			48,205			2,625,067
Total Assets	2,681,273			53,629			2,734,902

Accounts payable and accrued liabilities	81,182			(1,640		)	79,542
Total Current Liabilities	164,025			(1,640		)	162,385
Deferred Tax Liabilities (1)	224,230			23,376			247,606
Retained earnings (1)	288,793			31,893			320,686
Total Stockholders’ Equity	1,043,648			31,893			1,075,541
Total Liabilities and Stockholders’ Equity	2,681,273			53,629			2,734,902

(1) The adjustments column includes the impact of correcting the error in the ceiling test write-down as of March 31, 2014. Included in these amounts are approximately $49 million related to Accumulated depreciation, depletion, and amortization, $18 million related to the net deferred tax liabilities and $31 million related to retained earnings.



	Condensed Consolidated Statements of Operations For the Three Months Ended March 31,
	2014							2013
	(As Reported)		Adjustments			(As Restated)		(As Reported)		Adjustments			(As Restated)
Oil and Gas Sales	$	148,558	$	499		$	149,057	$	146,477	$	54		$	146,531
Total Revenues	143,681		499			144,180		146,237		54			146,291
General and Administrative, net	10,739		(213		)	10,526		12,725		—			12,725
Depreciation, depletion, and amortization	61,685		966			62,651		60,120		336			60,456
Lease operating cost	25,267		(300		)	24,967		27,424		(540		)	26,884
Transportation and gas processing	5,292		—			5,292		6,030		(1,292		)	4,738
Severance and other taxes	9,202		—			9,202		9,775		250			10,025
Total Costs and Expenses	132,020		453			132,473		134,651		(1,246		)	133,405
Income (Loss) from Continuing Operations Before Income Taxes	11,661		46			11,707		11,586		1,300			12,886
Provision (Benefit) for Income Taxes	6,248		17			6,265		4,377		471			4,848
Net Income (Loss)	5,413		29			5,442		7,209		829			8,038

Basic EPS: Net Income (Loss)	$	0.12	$	—		$	0.12	$	0.17	$	0.02		$	0.19
Diluted EPS: Net Income (Loss)	$	0.12	$	—		$	0.12	$	0.17	$	0.01		$	0.18



	Consolidated Statements of Cash Flows For the Year Ended March 31,
	2014									2013
	(As Reported)			Adjustments			(As Restated)			(As Reported)			Adjustments			(As Restated)
Net income (loss)	$	5,413		$	29		$	5,442		$	7,209		$	829		$	8,038
Depreciation, depletion, and amortization	61,685			966			62,651			60,120			336			60,456
Deferred income taxes	6,248			17			6,265			4,377			471			4,848
Share-based compensation expense	2,054			(270		)	1,784			3,015			—			3,015
Other	(3,216		)	354			(2,862		)	(3,864		)	(297		)	(4,161		)
(Increase) decrease in accounts receivable	(2,335		)	(499		)	(2,834		)	(5,191		)	(54		)	(5,245		)
Increase (decrease) in accounts payable and accrued liabilities	6,885			(597		)	6,288			3,085			(1,285		)	1,800
Net Cash Provided by Operating Activities	69,699			—			69,699			62,223			—			62,223