goodrich petroleum corporation - RR DONNELLEY FINANCIAL

locations. Our Haynesville Shale acreage currently includes approximately 1,165 gross unrisked,
non-proved drilling locations based on anticipated well spacing.
• Increase our oil production. During the past year, we have concentrated on increasing our crude oil
production and reserves by investing and drilling in the Eagle Ford Shale Trend. We intend to take
advantage of the current favorable sales price of oil compared to the relative sales price of natural gas.
We increased our oil production as a percentage of total production from 3% in 2010 to 10% in 2011.
• Expand acreage position in shale plays. As of December 31, 2011, we have acquired approximately
80,200 net acres in the Tuscaloosa Marine Shale Trend in Southeastern Louisiana and Southwestern
Mississippi. We continue to concentrate our efforts in areas where we can apply our technical expertise
and where we have significant operational control or experience. To leverage our extensive regional
knowledge base, we seek to acquire leasehold acreage with significant drilling potential in areas that
exhibit similar characteristics to our existing properties. We continually strive to rationalize our
portfolio of properties by selling marginal non-core properties in an effort to redeploy capital to
exploitation, development and exploration projects that offer a potentially higher overall return.
• Focus on maximizing cash flow margins. We intend to maximize operating cash flow by focusing on
higher-margin oil development in the Eagle Ford Shale Trend and lowering our overall operating costs
in our natural gas properties. In the current commodity price environment, our Eagle Ford Shale Trend
assets offer more attractive cash flow margins than our natural gas assets. From 2009 to 2011, we
lowered our lease operating costs on a consolidated basis from $1.01 per Mcfe to $0.54 per Mcfe by
focusing on lower cost Haynesville Shale wells and divesting higher cost mature assets. We expect this
trend to continue as it relates to our natural gas properties.
• Maintain financial flexibility. As of December 31, 2011, we had a borrowing base of $275 million
under our $600 million Senior Credit Facility, of which $102.5 million was outstanding. We have
historically funded growth through cash flow from operations, debt, equity and equity-linked security
issuances, divestments of non-core assets and strategic joint ventures. We actively manage our exposure
to commodity price fluctuations by hedging meaningful portions of our expected production through the
use of derivatives, including fixed price swaps, swaptions and costless collars. The level of our hedging
activity and the duration of the instruments employed depend upon our view of market conditions,
available hedge prices and our operating strategy.
2011 Overview
• We achieved annual production volume growth of 19% with production volume growing from 33.7
Bcfe in 2010 to 40.0 Bcfe in 2011.
• We increased our proved reserves by 8% compared to 2010, ending the year with estimated proved
reserves of approximately 501.0 Bcfe (approximately 463.5 Bcf of natural gas, 0.5 MMBbls of NGL
and 5.8 MMBbls of oil and condensate), with a PV-10 of $454 million and a standardized measure of
$450 million, approximately 42% of which is proved developed.
• We drilled 20 gross (14 net wells), in the Eagle Ford Shale Trend and added 18 wells to production in
2011.
• We drilled 19 gross (five net) wells in the Haynesville Shale Trend and added 22 gross (six net) wells to
production in 2011. As of December 31, 2011, we had four gross (two net) drilling wells in progress and
six (two net) wells drilled but awaiting completion in the Haynesville Shale Trend.
• We reduced our lease operating expense per Mcfe by 31% from $0.78 in 2010 to $0.54 per Mcfe in
2011.
• We acquired approximately 80,200 net acres in the Tuscaloosa Marine Shale Trend in Southeastern
Louisiana and Southwestern Mississippi as of December 31, 2011.
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