Welcome to Black Hills Exploration & Production. 
The majority of our oil and gas reserves are in Rocky Mountain region basins including the San Juan Basin of northwestern New Mexico, the Powder River Basin of Wyoming, and the Piceance Basin of western Colorado.
We are focused on growing our oil and gas production through development of existing acreage and limited acquisitions depending on economic and industry conditions. However, because of low oil and gas prices, we have limited our development capital. The current economic conditions are challenging because low commodity prices make many of our development drilling sites uneconomical. The lower development capital expenditures will lead to lower production levels because of the natural production decline of existing wells.
In the first quarter of 2009, we recorded a $27.8 million after-tax ceiling test impairment charge to our oil and gas properties. For reporting periods ending on or after Dec. 31, 2009, the Securities and Exchange Commission adopted new reporting and accounting requirements for oil and gas companies, which changed the way we determine oil and gas reserves and test for potential impairments. One key revision includes using 12-month average oil and gas prices to determine reserves compared to the previous method which used spot oil and gas prices on the last day of the reporting period. This change does not alleviate the potential for future impairments, but currently none are anticipated.
Black Hills Exploration & Production has approximately 90 full-time employees, with more than half in Denver, where engineering, geology, land and accounting personnel reside. Production employees -- including roustabouts, rig workers, pumpers, clerical workers and supervisors -- are located at the Finn-Shurley Field office in Wyoming, at the East Blanco Field office in New Mexico, and in Grand Junction, Colo.
Black Hills Exploration & Production is a subsidiary of Black Hills Corporation, a diversified energy company headquartered in Rapid City, S.D. Click here