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Upstream

Eagle Rock's Upstream Segment has long-lived, high working interest properties located primarily in Southern Alabama, East Texas, South Texas and West Texas.

As of December 31, 2009, our working interest properties included the following:

• 260 operated productive wells and 147 non-operated wells with net production of approximately 5,300 Boe/d
• Proved reserves of approximately 33.8 Bcf of natural gas, 7.5 MMBbls of crude oil, and 6.1 MMBbls of natural gas liquids
  • 88% proved developed
  • Reserve life index is approximately 10 years

Our Alabama assets, located predominately in Escambia County, Alabama, produce from the Smackover and Norphlet formations from 35 wells. Net production from these properties averaged 3.5 MMcfd, 1,558 Bopd, 559 Blpd and 196 LT/d of sulfur during 2009. The production from these formations contains significant percentages of hydrogen sulfide and carbon dioxide which must be extracted prior to sales. As a result, Eagle Rock’s Upstream operating arm, Escambia Operating Company, LLC owns and operates, two treating plants to facilitate the extraction of these contaminants and elemental sulfur, and one cryogenic processing plant to process and sell the natural gas liquids.

Eagle Rock’s East Texas, South Texas and West Texas properties are operated by Eagle Operating Company, LLC. The East Texas assets include 34 producing wells from multiple fields located mostly in Rains, Van Zandt, and Henderson Counties. Our East Texas fields produce from the Smackover formation and during 2009 averaged 2.6 MMcfd, 309 Bopd, 616 Blpd and 132 LT/d of sulfur. The production from these assets are gathered, compressed, treated, and processed by Regency Gas Services at its Eustace plant. Our South Texas properties consist of 11 producing wells in the Jourdanton field located in Atascosa County. These wells produce from the Edwards formation and averaged 2.5 MMcfd, 23 Bopd during 2009.

Our Permian assets, acquired in May 2008, are located predominately in Ward, Crane and Pecos Counties, Texas and are characterized by long life oil and gas reserves. Production from 186 wells is derived from multiple pay horizons extending from the shallow Yates formation to the deeper Pennsylvanian formations. The net production from these assets averaged 1.4 MMcfd, 382 Bopd, 190 Blpd in 2009. Since acquiring these assets, we have drilled and completed six wells on these assets in addition to numerous recompletions and workovers that have enhanced our base production. Additional drilling locations exist on these assets providing an ongoing source of organic growth opportunities for Eagle Rock.