project is now part of the Shenandoah Unit, federally approved in 2014. We expect that the
operator of the Shenandoah Unit will conduct additional appraisal drilling operations in 2015 and
eventually file for approval of a Suspension of Production in order to perpetuate all of the acreage
associated with the Shenandoah Unit.
(2) The gross and net acreage numbers reflected in these columns include portions of the estimated
34,560 gross (20,736 net) acres covering U.S. Gulf of Mexico blocks associated with our North
Platte project, upon which an exploration well has discovered hydrocarbons, but a development
project has not yet been sanctioned. We plan to perpetuate this acreage by an eventual unitization
and sanctioned development plan and by applying for approval of a Suspension of Production.
(3) The gross and net acreage number reflected in these columns include portions of the estimated
20,160 gross (4,032 net) acres covering U.S. Gulf of Mexico blocks associated with our Anchor
project, upon which an exploration well has discovered hydrocarbons, but a development project
has not yet been sanctioned. The leasehold acreage in the Anchor project is now part of the
Anchor Unit, federally approved in 2014. We expect that the operator of the Anchor Unit will
conduct additional appraisal drilling operations in 2015 and eventually file for approval of a
Suspension of Production in order to perpetuate all of the acreage associated with the Anchor
Unit.
The acreage numbers in the table above do not reflect (i) 5,760 gross (1,152 net) acres covering
leases associated with our Shenandoah project whose primary term expired in 2014 but are being held
by continuous operations on the Shenandoah project, or (ii) 11,520 gross (2,304 net) acres covering
leases associated with our Anchor project whose primary term expired in 2014 but are being held by
continuous operations on the Anchor project. We expect that the operators of both Shenandoah and
Anchor will continue to conduct operations on these projects during 2015 and eventually file for
approval of a Suspension of Production in order to perpetuate this acreage. See ‘‘Risk Factors—Risks
Relating to Our Business—Under the terms of our various license agreements, we are required to drill
wells, declare any discoveries and conduct certain development activities in order to retain exploration
and production rights and failure to do so may result in substantial license renewal costs or loss of our
interests in the undeveloped parts of our license areas.’’
Drilling Rigs
On August 5, 2013, we executed a drilling contract with Rowan Reliance Limited, an affiliate of
Rowan Companies plc, for the Rowan Reliance, a new-build, ultra-deepwater dynamically positioned
drillship that is currently drilling our North Platte #2 appraisal well. The Rowan Reliance drillship is
capable of operating in water depths of up to 12,000 feet and drilling to measured depths of up to
40,000 feet. The drilling contract provides for a firm three-year commitment, which began in February
2015, at a day rate of approximately $602,000 (inclusive of mobilization fees) and two one-year
extension options at day rates to be mutually agreed.
Prior Drilling Results and Drilling Statistics
The following table sets forth information with respect to the gross and net oil and gas wells we
drilled in the deepwater U.S. Gulf of Mexico during the periods indicated. The information presented
is not necessarily indicative of future performance, and should not be interpreted to present any
correlation between the number of productive wells drilled and quantities or economic value of any
reserves found. Productive wells include wells that have been drilled to the targeted depth and prove,
in our opinion, to be capable of producing either oil or gas in sufficient quantities that will justify
completion as an oil or gas well. A dry well is an exploration, appraisal or development well that
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