## Index to Financial Statements 

Subsequent to December 31, 2018, we agreed to purchase firm transportation with pipelines in the Appalachian Basin starting in 2021 and running through 2032 totaling $357 million in total contractual commitments of which the seller has agreed to reimburse us for $133 million. 

We refer you to Note 9 – “Commitments and Contingencies”  to the consolidated financial statements included in this Annual Report for further details on our demand charges and the risk factor “We have entered into long-term gathering and transportation contracts and have made significant investments in oilfield services businesses, including our drilling rigs, pressure pumping equipment and sand mine operations, to lower costs and secure inputs for our operations and transportation for our production. If our exploration and production activities are curtailed or disrupted, we may not recover our investment in these activities, which could adversely impact our results of operations. In addition, our continued expansion of these operations may adversely impact our relationships with third-party providers”  in Item 1A of Part I of this Annual Report. 

## Competition 

Our marketing activities compete with numerous other companies offering the same services, many of which possess larger financial and other resources than we have. Some of these competitors are other producers and affiliates of companies with extensive pipeline systems that are used for transportation from producers to end users. Other factors affecting competition are the cost and availability of alternative fuels, the level of consumer demand and the cost of and proximity to pipelines and other transportation facilities. We believe that our ability to compete effectively within the marketing segment in the future depends upon establishing and maintaining strong relationships with customers. 

## Customers 

Our marketing customers include major energy companies, utilities and industrial purchasers of natural gas. For the years ended December 31, 2018 and 2017, two subsidiaries of Royal Dutch Shell Plc in aggregate accounted for approximately 10.4% and 10.3%, respectively, of total natural gas, oil and NGL sales. During the year ended December 31, 2016, no single third-party purchaser accounted for 10% or more of our consolidated revenues. We believe that the loss of any one customer would not have an adverse effect on our ability to sell our natural gas, oil and NGL production. 

## Regulation 

The transportation of natural gas, oil and NGLs is heavily regulated. Interstate pipelines must obtain authorization from the FERC to operate in interstate commerce, and state governments typically must authorize the construction of pipelines for intrastate service. The FERC currently allows interstate pipelines to adopt market-based rates; however, in the past the FERC has regulated pipeline tariffs and could do so again in the future. State tariff regulations vary. Currently, all pipelines we own are intrastate and immaterial to our operations. 

State and local permitting, zoning and land use regulations can affect the location, construction and operation of gathering and other pipelines needed to transport production to market, and the lack of new pipeline capacity can limit our ability to reach relevant markets for the sale of the commodities we produce. 

The transportation of natural gas and oil is also subject to extensive environmental regulation. We refer you to “Other – Environmental Regulation”  in Item 1 of Part I of this Annual Report and the risk factor “We are subject to complex federal, state and local laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities” in Item 1A of Part I of this Annual Report for a discussion of the impact of environmental regulation on our business. 

## Other 

Our other operations have historically consisted of limited real estate development activities and a natural gas vehicles (“NGV”) fueling station in Damascus, Arkansas, which was sold in May 2016. We currently have no significant business activity outside of our E&P and Midstream segments. 

## Environmental Regulation 

General. Our operations are subject to environmental regulation in the jurisdictions in which we operate. These laws and regulations require permits for drilling wells and the maintenance of bonding requirements to drill or operate wells and also regulate the spacing and location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, the plugging and abandoning of wells and the prevention and cleanup of pollutants and other matters. We maintain insurance for costs of clean-up operations in limited instances arising out of sudden and 

