Our goal from the beginning has been to create value for our investors by building one of the largest onshore natural gas resource bases in the U.S. by focusing our technical and land acquisition skills on developing unconventional resource plays onshore in the U.S. From 2000 through 2008, our focus was on finding and developing natural gas resource plays. In the past two years, our focus has shifted to finding and developing plays with oil and natural gas liquids (NGL) since oil and NGLs are more highly valued in the U.S. than natural gas and technological and knowledge advances have enabled us to pursue
these new plays more economically.
In building our industry-leading unconventional natural gas and liquids resource base from 1998-2010, we integrated an aggressive and technologically advanced drilling program with an active property consolidation program at first focused on small to medium-sized corporate and property acquisitions and during the last few years leasehold acquisitions. During the past three years, we have shifted our strategy from drilling inventory capture to drilling inventory conversion. In doing so, we have de-emphasized acquisitions of proved properties while further emphasizing our industry-leading drilling program and converting our substantial backlog of drilling opportunities into proved developed producing reserves.
Due to recent low natural gas prices and positive results in the company’s liquids-rich plays, our goal is to reach a balanced mix of natural gas and liquids revenue as quickly as possible through organic drilling, rather than through acquisitions. This transition is already apparent in the mix of natural gas and oil and natural gas liquids wells we are drilling. In 2010, approximately 30% of our drilling and completion capital expenditures were allocated to liquids-rich plays, compared to 10% in 2009, and we are projecting that these expenditures will reach 75% in 2012. Our production of oil and natural gas liquids has been increasing since 2010 as we develop our new unconventional oil plays, particularly in the Granite Wash, Tonkawa, Cleveland, Mississippi Lime plays of the Anadarko Basin; the Eagle Ford Shale in South Texas; the Niobrara Shale, Frontier and Codell plays in the Powder River and DJ Basins and the Avalon, Bone Spring, Wolfcamp and Wolfberry plays of the Permian Basin; the Three Forks/Bakken in the Williston Basin; and the Utica Shale of the Appalachian Basin. The company now owns approximately 6.2 million net leasehold acres in liquids-rich plays.
Below we’ve detailed several key elements of our business strategy which include: