On October 2, 2006, our wholly-owned
subsidiary, Winchester Acquisition, LLC, or Winchester Acquisition, acquired
Winchester and its affiliated entities from Progress Fuels Corporation, or PFC,
for approximately $1.1 billion in cash. The acquisition consisted of
producing and undeveloped oil and natural gas properties located in East Texas
and North Louisiana, six gathering systems with approximately 300 miles of
pipe and a 53 mile pipeline system. The average acquired working interest
was 76% with an average 58% net revenue interest. The properties are located in
the Cotton Valley, Hosston and Travis Peak trends in East Texas and North
Louisiana. As...
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