St. Mary has conducted operations in the Williston Basin in eastern Montana and western North Dakota since 1991. The region is managed by our office in Billings, Montana. In recent years, we have expanded our operations into the Greater Green River, Powder River, Big Horn, and Wind River basins of Wyoming through a series of acquisitions. The largest growth in the region came in late 2002 and early 2003 with significant property acquisitions from Choctaw, Burlington Resources, and Flying J. These transactions brought with them a tremendous acreage position that has precipitated additional growth in this region.

Our capital budget for the Rocky Mountain region is $130 million for 2008, with roughly $24 million budgeted for activities for Hanging Woman Basin coalbed methane. We will operate roughly 65 percent of our planned regional investment in 2008. In the conventional Rockies program, several vertical wells and two recompletions in the Red River are planned for the year. We also plan to drill a small number of horizontal Bakken wells in and around our historic Bakken development areas in Montana. Workover and recompletion operations are planned in our Wind River Basin and Big Horn Basin oil properties. At the outside operated Atlantic Rim coalbed methane play in the Green River Basin, we expect to see activity ramp up since regulatory and environmental delays appear to have been resolved. At Hanging Woman Basin, we plan to moderate our drilling activity in 2008 and monitor and evaluate the results of the shallow and intermediate pods and deep horizontal programs.