goodrich petroleum corporation - RR DONNELLEY FINANCIAL

Additionally, as management’s views related to future prices change, the change will affect the estimate of future
net cash flows and the fair value estimates. Changes in either of these amounts will directly impact the
calculation of impairment.
A majority of our production, revenue and cash flow from operating activities are derived from assets that
are concentrated in a single geographic area, making us vulnerable to risks associated with operating in one
geographic area.
Essentially all of our estimated proved reserves at December 31, 2011, and all our production during 2011
were associated with our Northwest Louisiana, East Texas and South Texas properties which include the
Haynesville Shale, Cotton Valley Taylor Sand and Eagle Ford Shale, respectfully. Accordingly, if the level of
production from these properties substantially declines or is otherwise subject to a disruption in our operations
resulting from operational problems, government intervention (including potential regulation or limitation of the
use of high pressure fracture stimulation techniques in these formations) or natural disasters, it could have a
material adverse effect on our overall production level and our revenue.
We have limited control over the activities on properties we do not operate.
Other companies operate some of the properties in which we have an interest. For example, Chesapeake
operates certain properties in the Haynesville Shale. We have less ability to influence or control the operation or
future development of these non-operated properties or the amount of capital expenditures that we are required to
fund with respect to them versus those fields in which we are the operator. Our dependence on the operator and
other working interest owners for these projects and our reduced influence or ability to control the operation and
future development of these properties could materially adversely affect the realization of our targeted returns on
capital and lead to unexpected future costs.
Our ability to sell natural gas and receive market prices for our natural gas may be adversely affected by
pipeline and gathering system capacity constraints and various transportation interruptions.
We operate primarily in the Northwest Louisiana, East Texas and South Texas areas. Our Haynesville Shale
acreage is located in Northwest Louisiana and East Texas. A number of companies are currently operating in the
Haynesville Shale. If drilling in the Haynesville Shale and Eagle Ford Shale continues to be successful, the
amount of natural gas being produced could exceed the capacity of the various gathering and intrastate or
interstate transportation pipelines currently available in this region. If this occurs, it will be necessary for new
pipelines and gathering systems to be built. Because of the current economic climate, certain pipeline projects
that are planned for Northwest Louisiana and East Texas may not occur or may be substantially delayed for lack
of financing. In addition, capital constraints could limit our ability to build intrastate gathering systems necessary
to transport our natural gas to interstate pipelines. In such an event, we might have to shut in our wells awaiting a
pipeline connection or capacity or sell natural gas production at significantly lower prices than those quoted on
New York Mercantile Exchange (NYMEX) or that we currently project, which would adversely affect our results
of operations.
A portion of our oil and natural gas production in any region may be interrupted, or shut in, from time to
time for numerous reasons, including as a result of weather conditions, accidents, loss of pipeline or gathering
system access, field labor issues or strikes, or we might voluntarily curtail production in response to market
conditions. If a substantial amount of our production is interrupted at the same time, it could temporarily
adversely affect our cash flow.
Our debt instruments impose restrictions on us that may affect our ability to successfully operate our
business.
Our Senior Credit Facility contains customary restrictions, including covenants limiting our ability to incur
additional debt, grant liens, make investments, consolidate, merge or acquire other businesses, sell assets, pay
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