(1) Barrels of oil equivalent have been calculated on the basis of six thousand cubic feet (Mcf) of natural gas equals one barrel of oil equivalent (BOE). 

NM – Not meaningful 

## Oil revenues 

For the year ended December 31, 2019, oil revenues increased by approximately $31.2 million or 22% relative to the comparable period in 2018. Of the increase, approximately $39.9 million was attributable to increased sales volumes, partially offset by a decrease of $8.7 million due to lower realized prices. Our average realized price per Bbl decreased from $59.40 for the year ended December 31, 2018 to $55.71 or 6% for the year ended December 31, 2019. We had a net increase in the volume of oil sold of 716 MBbls or 30%, primarily due to new wells brought online, partially offset by the impact of divestitures in the latter half of 2018. 

## Natural gas revenues 

For the year ended December 31, 2019, natural gas revenues decreased by $3.5 million or 47% relative to the comparable period in 2018. Of the decrease, approximately $4.4 million was attributable to lower realized prices, partially offset by an increase of $0.9 million attributable to increased sales volumes. Our average realized price per Mcf decreased 60% from $2.05 for the year ended December 31, 2018 to $0.82 for the year ended December 31, 2019. Approximately 96% of our natural gas sales volumes for the year was from the Midland Basin, which, since the fourth quarter of 2018, has been experiencing a lack of sufficient pipeline transportation that is connected to markets which are purchasing the gas. This has resulted in negative gas prices at times, whereby the seller is actually paying the purchaser to take the gas. The total volume of natural gas produced and sold increased 1,150 MMcf or 32% primarily due to new wells brought online, partially offset by the impact of 2018 gas well divestitures. 

## Natural gas liquids revenues 

For the year ended December 31, 2019, natural gas liquids revenues decreased by $1.8 million or 10% relative to the comparable period in 2018. Of the decrease, approximately $7.3 million was attributable to lower realized prices, partially offset by an increase of $5.5 million attributable to increased sales volumes. Approximately 94% of our natural gas liquids sales volumes for the period was from the Midland Basin. Since the fourth quarter of 2018, the price for fractionated natural gas liquids has decreased, and after also taking into account the cost to transport our natural gas liquids, has resulted in significant decreases in prices received. The volume of natural gas liquids produced and sold increased by 367 MBbls or 56%, primarily due to new wells brought online, partially offset by the impact of divestitures in the latter half of 2018. 

## Lease operating expense (“LOE”) 

LOE includes all costs incurred to operate wells and related facilities for both operated and non-operated properties. In addition to direct operating costs such as labor, repairs and maintenance, re-engineering and workovers, equipment rentals, materials and supplies, fuel and chemicals, LOE includes product marketing and transportation fees, insurance and overhead charges provided for in operating agreements. 

LOE increased by $9.9 million or 53% for the year ended December 31, 2019 relative to the comparable period in 2018, primarily due to additional producing wells brought online, which drove a 35% increase in production volume, in addition to a $3.6 million increase driven by a greater number of workover projects as compared to the prior year. 

## Production and ad valorem taxes 

Production and ad valorem taxes for the year ended December 31, 2019 increased by $2.0 million or 21% relative to the comparable period in 2018, as the impact of increased volume was largely offset by the impact of decreased commodity prices. As a percentage of revenues from oil, natural gas, and natural gas liquids, production taxes remained flat when compared to the prior year. 

## Impairment 

During the year ended December 31, 2018, we recognized $4.6 million of non-cash asset impairments to our unproved oil and natural gas properties resulting from certain acreage expirations related to our Eagle Ford Trend properties. See Note 7. Oil and Natural Gas Properties  in the Notes to Consolidated Financial Statements for a discussion of how impairments are measured. 

## Depreciation, depletion and amortization (“DD&A”) 

DD&A increased for the year ended December 31, 2019 by $21.7 million, or 46% relative to the comparable period in 2018, primarily due to development activity that resulted in increased costs subject to depletion and an increase in production primarily in the Midland Basin. 

