Denver Basin: Redtail Niobrara Prospect. The Redtail prospect targets the Niobrara formation in the Denver Basin, in Weld County, Colorado. In the second quarter, we added approximately 4,500 net acres to our acreage position at Redtail, bringing our total acreage to 106,889 gross (79,256 net) acres in the play. We resumed drilling operations at Redtail in June 2012. We currently have one well waiting on completion and one well drilling.

Operated Drilling and Workover Rig Count

As of June 30, 2012, 25 operated drilling rigs and 75 operated workover rigs were active on our properties.

The breakdown of our operated rigs as of June 30, 2012 was as follows:

Region
     

Drilling
     

Workover

Northern Rockies
20 26
Permian Basin 1 10
Central Rockies 2 -
EOR Projects
Postle 2 4
North Ward Estes -       35
Totals 25       75
 

We have 29 drilling rigs under contract. Four of these contracts commence subsequent to June 30, 2012, which explains the difference between our second quarter operated rig count of 25 and our 29 contracted rig count. Thirteen of the total 29 contracted rigs have contracts that can be terminated without penalty by December 31, 2012 and another seven rigs have contracts that can be terminated without penalty by December 31, 2013.

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