goodrich petroleum corporation - RR DONNELLEY FINANCIAL

While our internal, mid-year reserve reports were prepared in accordance with existing SEC guidelines, they
should not be construed as a fully independent reserve report similar to what we have used in the past and what
we used at year end.
Impairment
We recorded impairment expense of $8.1 million on four fields for the year ended December 31, 2011, the
majority is related to our non-core Beckville field due to falling natural gas prices.
We recorded impairment expense of $234.9 million on several fields for the year ended December 31, 2010,
related primarily to a decreasing projected natural gas price environment resulting in the write down of the
carrying values of certain non-core assets. In addition to lower commodity prices, the impairment was a result of
our change in forward looking development plans, which will focus on the Eagle Ford Shale Trend, core
Haynesville Shale in Northwest Louisiana and the Angelina River Trend of the Shelby Trough.
We recorded an impairment of $208.9 million in 2009 related to the Bethany Longstreet, Bethune/East
Gates, Loco Bayou, Cotton South/Raintree and a collection of other fields as a result of the decrease in natural
gas prices in 2009 from 2008 which lowered economical proved reserves. Proved and probable reserves were
also lowered due to our strategic decision to decrease using vertical wellbores to develop our existing properties
because this method was deemed no longer the most economic avenue to pursue. The impairment charge in 2009
was also driven by the removal of the previously scheduled vertical proved and probable drilling locations and
was partially offset by the addition of horizontal undeveloped locations in fields where such locations were
deemed appropriate.
General and Administrative Expense
General and administrative (“G&A”) expense decreased in 2011 compared to 2010. The decrease relates
primarily to the partial refund and final settlement of a Louisiana State franchise tax payment made under protest
in 2007, decreases in stock based compensation and consulting cost. Share based compensation expense, which is
a non-cash item, amounted to $6.5 million in 2011 compared to $7.6 million in 2010. G&A on a per unit basis
decreased to $0.74 per Mcfe from $0.92 per Mcfe as a result of the 19% increase in production volume in 2011
compared to 2010.
G&A expense increased in 2010 compared to 2009. G&A expense in 2010 included compensation costs
related to the resignation of an officer of the company. See Note 14—“Resignation of Executive Officer” in the
Notes to Consolidated Financial Statements in Part II Item 8 of this Annual Report on Form 10-K for more
information. G&A expense for the year 2010 also includes certain 2009 bonuses approved and paid out in March
2010. Share based compensation expense, which is a non-cash item, amounted to $7.6 million in 2010 compared
to $6.8 million in 2009. G&A on a per unit basis decreased to $0.92 per Mcfe from $0.94 per Mcfe as a result of
the 13% increase in production volume in 2010 compared to 2009.
Gain on Sale of Assets
We recorded a gain of $0.2 million on the sale on non-core oil and natural gas properties in the year ended
December 31, 2011. We recorded a loss of $2.8 million on the sale of assets in the year ended December, 31,
2010 and a $0.3 million gain on the sale of assets in the year ended December 31, 2009.
Other
Hoover Tree Farm, LLC v. Goodrich Petroleum Company, LLC et al. On April 29, 2010 a state court in
Caddo Parish, Louisiana, granted a judgment holding us solely responsible for the payment of $8.5 million in
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