b'We may be subject to risks in connection with acquisitions and the integration of significant acquisitions maybe difficult.We periodically evaluate acquisitions of prospects and licenses, reserves and other strategictransactions that appear to fit within our overall business strategy. The successful acquisition of theseassets or businesses requires an assessment of several factors, including:\x7f recoverable reserves;\x7f future oil and natural gas prices and their appropriate differentials;\x7f development and operating costs; and\x7f potential environmental and other liabilities.The accuracy of these assessments is inherently uncertain. In connection with these assessments,we perform a review of the subject assets that we believe to be generally consistent with industrypractices. Our review will not reveal all existing or potential problems nor will it permit us to becomesufficiently familiar with the assets to fully assess their deficiencies and potential recoverable reserves.Inspections may not always be performed on every well, and environmental problems are notnecessarily observable even when an inspection is undertaken. Even when problems are identified, theseller may be unwilling or unable to provide effective contractual protection against all or part of theproblems. We may not be entitled to contractual indemnification for environmental liabilities and couldacquire assets on an as is basis. Significant acquisitions and other strategic transactions may involveother risks, including:\x7f diversion of our managements attention to evaluating, negotiating and integrating significantacquisitions and strategic transactions;\x7f the challenge and cost of integrating acquired operations, information management and othertechnology systems and business cultures with those of ours while carrying on our ongoingbusiness;\x7f difficulty associated with coordinating geographically separate organizations; and\x7f the challenge of attracting and retaining personnel associated with acquired operations.The process of integrating operations could cause an interruption of, or loss of momentum in, theactivities of our business. Members of our senior management may be required to devote considerableamounts of time to this integration process, which will decrease the time they will have to manage ourbusiness. If our senior management is not able to effectively manage the integration process, or if anysignificant business activities are interrupted as a result of the integration process, our business couldsuffer.If we fail to realize the anticipated benefits of a significant acquisition, our results of operations may beadversely affected.The success of a significant acquisition (e.g., our acquisition of DGE) will depend, in part, on ourability to realize anticipated growth opportunities from combining the acquired assets or operationswith those of ours. Even if a combination is successful, it may not be possible to realize the fullbenefits we may expect in estimated proved reserves, production volume, cost savings from operatingsynergies or other benefits anticipated from an acquisition or realize these benefits within the expectedtime frame. Anticipated benefits of an acquisition may be offset by operating losses relating to changesin commodity prices, increased interest expense associated with debt incurred or assumed in connectionwith the transaction, adverse changes in oil and gas industry conditions, or by risks and uncertaintiesrelating to the exploratory prospects of the combined assets or operations, or an increase in operatingor other costs or other difficulties, including the assumption of health, safety, and environmental or65'