Oil and Gas Reserve Information

There are numerous uncertainties inherent in estimating quantities of proved crude oil and natural gas reserves. Crude oil and natural gas reserve engineering is a subjective process of estimating underground accumulations of crude oil and natural gas that cannot be precisely measured. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing and production subsequent to the date of the estimate may justify revision of such estimate. Accordingly, reserve estimates are often different from the quantities of crude oil and natural gas that are ultimately recovered.

Estimates of our crude oil and natural gas reserves and present values as of December 31, 2016, 2015 and 2014, were prepared by Netherland, Sewell & Associates, Inc., independent reserve engineers.

A summary of changes in estimated quantities of proved reserves for the years ended December 31, 2016, 2015 and 2014 is as follows:



	Gas		Oil		NGLS		Total
	(MMcf)		(Mbbl)		(Mbbl)		(MMcfe) (1)
Company:
Balance at January 1, 2014	662		236		—		2,078
Revisions of quantity estimate	65		(67	)	21		(211	)
Extensions and discoveries	8		1		—		14
Production	(134	)	(93	)	(4	)	(716	)
Balance at December 31, 2014 (2)	601		77		17		1,165
Revisions of quantity estimate	(330	)	(35	)	(15	)	(630	)
Extensions and discoveries	—		—		—		—
Production	(83	)	(36	)	(2	)	(311	)
Balance at December 31, 2015 (3)	188		6		—		224
Revisions of quantity estimate	196		3		8		262
Extensions and discoveries	—		—		—		—
Production	(54	)	(2	)	—		(66	)
Balance at December 31, 2016 (4)	330		7		8		420

Company’s share of Laramie Energy:
Balance at January 1, 2014	186,597		584		7,401		234,509
Revisions of quantity estimate	8,876		34		(1,689	)	(1,054	)
Extensions and discoveries	21,108		128		489		24,808
Production	(4,831	)	(18	)	(125	)	(5,689	)
Balance at December 31, 2014 (2)	211,750		728		6,076		252,574
Revisions of quantity estimate	(99,548	)	(316	)	(2,718	)	(117,752	)
Extensions and discoveries	32,041		131		1,007		38,869
Acquisitions and divestures	(5,945	)	(20	)	(171	)	(7,091	)
Production	(4,745	)	(20	)	(149	)	(5,759	)
Balance at December 31, 2015 (3)	133,553		503		4,045		160,841
Revisions of quantity estimate	38,022		87		808		43,392
Extensions and discoveries	638		1		19		758
Acquisitions and divestures	168,887		492		4,701		200,045
Production	(15,192	)	(59	)	(552	)	(18,858	)
Balance at December 31, 2016 (4)	325,908		1,024		9,021		386,178

Total at December 31, 2016	326,238		1,031		9,029		386,598

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(1)	MMcfe is based on a ratio of 6 Mcf to 1 barrel.

(2)

During 2014, the Company's estimated proved reserves, inclusive of the Company's share of Laramie Energy's estimated proved reserves, increased by 17,152 MMcfe or approximately 7%. Extensions and discoveries related to our share of Laramie Energy's estimated proved reserves resulted in an increase of 24,808 MMcfe from the beginning of year reserves. These extensions and discoveries are primarily associated with successful completions by Laramie Energy.

(3)

During 2015, the Company's estimated proved reserves, inclusive of the Company's share of Laramie Energy's estimated proved reserves, decreased by 92,674 MMcfe or approximately 36.5%. Revisions of quantity estimate related to our share of Laramie Energy's estimated proved reserves resulted in a decrease of 117,752 MMcfe from the beginning of year reserves. These revisions of quantity estimate are primarily associated with wells becoming uneconomic during 2015.

(4)

During 2016, the Company's estimated proved reserves, inclusive of the Company's share of Laramie Energy's estimated proved reserves, increased by 225,533 MMcfe or approximately 140.0%. Acquisitions and divestitures related to our share of Laramie Energy's estimated proved reserves resulted in an increase of 200,045 MMcfe from the beginning of year reserves. This increase was primarily due to Laramie Energy's acquisition of properties in the Piceance Basin for $157.5 million in March 2016. Please read Note 3—Investment in Laramie Energy, LLC for more information. The increase of 43,392 MMcfe in Revisions of quantity estimate related to our share of Laramie Energy's estimated proved reserves is primarily due to wells that have become economic as a result of increased operator efficiency and cost reductions.



	Gas	Oil	NGLS	Total
	(MMcf)	(Mbbl)	(Mbbl)	(MMcfe) (1)
December 31, 2014
Proved developed reserves
Company	601	77	17	1,165
Company's share of Laramie Energy	48,855	195	1,226	57,381
Total	49,456	272	1,243	58,546
Proved undeveloped reserves
Company	—	—	—	—
Company's share of Laramie Energy	162,895	533	4,850	195,193
Total	162,895	533	4,850	195,193

December 31, 2015
Proved developed reserves
Company	188	6	—	224
Company's share of Laramie Energy	65,499	248	1,931	78,573
Total	65,687	254	1,931	78,797
Proved undeveloped reserves
Company	—	—	—	—
Company's share of Laramie Energy	68,054	255	2,114	82,268
Total	68,054	255	2,114	82,268

December 31, 2016
Proved developed reserves
Company	330	7	8	420
Company's share of Laramie Energy	159,500	516	4,349	188,690
Total	159,830	523	4,357	189,110
Proved undeveloped reserves
Company	—	—	—	—
Company's share of Laramie Energy	166,408	508	4,672	197,488
Total	166,408	508	4,672	197,488

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(1)	MMcfe is based on a ratio of 6 Mcf to 1 barrel.



	Price per MMbtu (2)		WTI per Bbl
Base pricing, before adjustments for contractual differentials (Company and Laramie Energy): (1)
December 31, 2014	$	4.36	$	94.99
December 31, 2015	2.39		50.28
December 31, 2016	2.29		42.75

______________________________________________


(1)	Proved reserves are required to be calculated based on the 12-month, first day of the month historical average price in accordance with SEC rules. The prices shown above are base index prices to which adjustments are made for contractual deducts and other factors.


(2)	The CIG index was used for pricing during 2014 and 2015. In 2016, pricing is based on the Northwest spot price index.

Future net cash flows presented below are computed using applicable prices (as summarized above) and costs and are net of all overriding royalty revenue interests.



	December 31,
	2016			2015			2014
	(in thousands)
Company:
Future net cash flows	$	1,154		$	690		$	10,452
Future costs
Production	713			345			7,760
Development and abandonment	2			25			37
Income taxes (1)	—			—			—
Future net cash flows	439			320			2,655
10% discount factor	(154		)	(128		)	(889		)
Discounted future net cash flows	$	285		$	192		$	1,766

Company’s share of Laramie Energy:
Future net cash flows	$	955,090		$	425,596		$	1,268,704
Future costs
Production	488,977			249,831			539,796
Development and abandonment	148,708			72,462			236,027
Income taxes (1)	—			—			—
Future net cash flows	317,405			103,303			492,881
10% discount factor	(174,512		)	(63,302		)	(322,282		)
Discounted future net cash flows	$	142,893		$	40,001		$	170,599

Total discounted future net cash flows	$	143,178		$	40,193		$	172,365

_______________________________________________

(1)

No income tax provision is included in the standardized measure of discounted future net cash flows calculation shown above as we do not project to be taxable or pay cash income taxes based on its available tax assets and additional tax assets generated in the development of its reserves because the tax basis of its oil and gas properties and NOL carryforwards exceeds the amount of discounted future net earnings.

The principal sources of changes in the standardized measure of discounted net cash flows for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):



	Company			Company's Share of Laramie Energy			Total

Balance at January 1, 2014	$	3,537		$	89,325		$	92,862
Sales of oil and gas production during the period, net of production costs	(1,288		)	(3,763		)	(5,051		)
Net change in prices and production costs	(31		)	35,837			35,806
Changes in estimated future development costs	118			(6,292		)	(6,174		)
Extensions, discoveries and improved recovery	85			4,914			4,999
Revisions of previous quantity estimates, estimated timing of development and other	(1,111		)	27,632			26,521
Previously estimated development and abandonment costs incurred during the period	102			14,013			14,115
Accretion of discount	354			8,933			9,287
Balance at December 31, 2014	1,766			170,599			172,365
Sales of oil and gas production during the period, net of production costs	(479		)	(5,753		)	(6,232		)
Acquisitions and divestitures	—			(4,789		)	(4,789		)
Net change in prices and production costs	(679		)	(153,564		)	(154,243		)
Changes in estimated future development costs	8			788			796
Extensions, discoveries and improved recovery	—			9,273			9,273
Revisions of previous quantity estimates, estimated timing of development and other	(601		)	(8,621		)	(9,222		)
Previously estimated development and abandonment costs incurred during the period	—			15,008			15,008
Accretion of discount	177			17,060			17,237
Balance at December 31, 2015	192			40,001			40,193
Sales of oil and gas production during the period, net of production costs	(62		)	(7,979		)	(8,041		)
Acquisitions and divestitures	—			81,066			81,066
Net change in prices and production costs	(20		)	2,994			2,974
Changes in estimated future development costs	14			(8,575		)	(8,561		)
Extensions, discoveries and improved recovery	—			231			231
Revisions of previous quantity estimates, estimated timing of development and other	142			18,350			18,492
Previously estimated development and abandonment costs incurred during the period	—			12,805			12,805
Other	—			—			—
Accretion of discount	19			4,000			4,019
Balance at December 31, 2016	$	285		$	142,893		$	143,178