Riata Energy, Inc. is a vertically integrated energy company with oil and natural gas reserves and production; drilling and related oil field services; gas gathering, marketing and processing facilities; and CO2 treating and transportation facilities and tertiary oil recovery operations. Riata's vertical integration complements its core exploration and production business and provides operational flexibility and an advantageous cost structure. Since 1986, Riata has expanded from limited acreage and production in West Texas to a large, focused asset base in West Texas, acreage and production in the Anadarko and Arkoma Basins in Oklahoma and a largely undeveloped acreage position in the Piceance Basin in northwestern Colorado. We continually seek to optimize our asset base and believe that our control of all of the components of oil and natural gas exploration and production - acreage, drilling, gathering, transportation and treating - provides us with significant competitive advantages. Proforma proved reserves at December 31, 2005 were 309 Bcfe. We have interests in more than 350 wells, substantially all of which we operate. More importantly, we have interests in more than 700,000 gross acres which provides us with an extensive drilling inventory. Lariat Services, Inc., our drilling and oil field services subsidiary, is the largest privately owned drilling contractor in the United States based on a footage drilled basis. We currently own, or have a joint venture interest in, 22 drilling rigs and we have 24 new built rigs on order which we expect to take delivery of throughout 2006 and the first quarter of 2007. Our gas marketing and midstream services division owns an interest in four gas treatment plants and 280 miles of gas pipeline in West Texas and Colorado. Also, our CO2 gathering and tertiary oil recover operations are conducted through PetroSource Energy Company. PetroSource gathers CO2 from four gas treatment plants located in the Delaware and Val Verde Basins of West Texas. We own 231 miles of pipeline and we operate tertiary oil recovery projects in the Permian Basin in West Texas.
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