Year-End 2007
Proved Reserves
201.3 Bcfe
Proved Developed Reserves
88%
Percentage of Total Reserves
19%
Proved Reserve Gas/Oil Mix
96%-4%
3P Reserves
971 Bcfe
Total Net Leased Acres
156,000
Undeveloped % of Net Leasehold
38%
2008
2007 Budgeted Capital Expenditures
$135 MM
 

St. Mary has been active in the Mid-Continent region since 1973. Operations for the region are managed by our office in Tulsa, Oklahoma. We have been active in the Anadarko Basin of western Oklahoma since our entry into the region and our primary focus in the region is currently on the Atoka and Granite Wash formations. In recent years we have begun operating in the Arkoma Basin in eastern Oklahoma where the current focus is on horizontal development of the Woodford shale, although the Wapanucka limestone and Cromwell sandstone also appear to have commercial potential. The Mid-Continent region oversees our assets in Constitution South Field in Jefferson County, Texas. Our long history of operations and proprietary geologic knowledge in the region enables us to sustain economic development and exploration programs despite periods of adverse industry conditions. We apply current technology through the use of hydraulic fracturing, innovative well completion techniques, and horizontal drilling to accelerate production and associated cash flow from the region’s tight gas reservoirs and developing plays.

The 2008 capital expenditure budget for the Mid-Continent region is $135.0 million, 69 percent of which we will operate. The largest component of the budget is our program targeting the Woodford shale using horizontal wells in the Arkoma basin, where roughly 30 percent of the region's budget will be invested. After mixed results in the horizontal Woodford shale program in the first half of 2007, we had a series of successful wells in the latter part of the year which we believe validates our understanding the well and completion design being used currently in this program. We currently plan to drill ten horizontal Woodford wells with two operated rigs in the first half of 2008, as well as continue to participate with our partners in outside operated wells. With continued success in the play, we have the ability to increase activity and our capital investment in the program in the latter part of 2008. In 2008, we plan to continue with an exploration program in the Anadarko Basin that yielded encouraging results in 2007. This exploration program targets deeper formations of the basin. We also plan to deploy approximately 27 percent of the region's 2008 capital budget to drill six exploratory test wells in this program. In the Western Oklahoma Washes program in the Anadarko Basin, which we have referred to previously as the Mayfield development area, we plan to invest roughly 17 percent of the year's budget in this program that targets the Atoka and Granite Wash formations. The area is a known hydrocarbon province, and efforts in 2008 will be concerned with improving the geotechnical effort applied to the program and revising drilling and completion techniques.