Under our Third Amended and Restated Certificate of Incorporation, any action required to be taken at any annual or special meeting of our stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Thus, consents of this type can be effected without the participation or input of minority stockholders. 

## Item 1B. Unresolved Staff Comments 

None. 

## Item 2. Properties 

## Summary of Oil and Gas Properties 

## Midland Basin 

We have an operated position of approximately 23,000 net acres in the core of the Midland Basin of west Texas across Reagan, Upton, and Midland counties with an average working interest of approximately 94%. As of December 31, 2019, we had 13 gross vertical and 67 gross horizontal operated producing wells. Current internal estimates indicate 269 potential gross, largely de-risked, operated drilling locations, the vast majority of which are in various benches of the Wolfcamp and the Spraberry formations, which are expected to have an average working interest of 82%. 

We also have a non-operated position of approximately 6,100 net acres in the Midland Basin of west Texas, located in Howard, Glasscock, Martin and Midland counties, Texas. As of December 31, 2019, we had an interest in 92 gross vertical and 40 gross horizontal non-operated producing wells with an average working interest of approximately 36%. 

We have identified 176 potential gross horizontal non-operated drilling locations in various benches of the Wolfcamp and Spraberry formations with an estimated average working interest of approximately 29%. 

## Eagle Ford Trend 

As of December 31, 2019, we held approximately 28,500 gross (14,100 net) operated leasehold acres in Fayette, Gonzales and Karnes counties, Texas. The acreage is located in the crude oil window of the Eagle Ford shale trend of south Texas and is prospective for the Eagle Ford, Austin Chalk and Upper Eagle Ford formations. We serve as the operator with working interests ranging from approximately 12% to 67%. 

As of December 31, 2019, we operated 103 gross Eagle Ford wells and 13 gross Austin Chalk wells and had non-operated interests in five gross producing Eagle Ford wells and one gross producing Austin Chalk well. We have identified a total of 62 potential gross Eagle Ford drilling locations in this acreage. In addition, because our acreage position is prospective for the Austin Chalk and Upper Eagle Ford formations, we may have additional future economic locations. The majority of our acreage is covered by an approximately 173 square mile 3-D seismic survey. 

## Oil and Natural Gas Reserves 

As of December 31, 2019, all of our oil and natural gas reserves were located in the state of Texas. We expect to further develop these properties through additional drilling and completion operations. Our reserve estimates have been prepared by Cawley, Gillespie & Associates, Inc. (“CG&A”), an independent petroleum engineering firm. The scope and results of CG&A’s procedures are summarized in a letter which is included as an exhibit to this report. For further information on estimated reserves, including information on estimated future net cash flows and the standardized measure of discounted future net cash flows, please refer to the Supplemental Information on Oil and Gas Exploration and Production Activities (Unaudited)  in Part II, Item 8 of the Notes to Consolidated Financial Statements of this report. 

As of December 31, 2019, our estimated proved reserves totaled 94,336 MBOE and had a PV-10 value of approximately $820.0 million (reconciled in “Non-GAAP Measures” below) and a Standardized Measure of Discounted Future Net Cash Flows of approximately $789.6 million, all of which relate to our properties in Texas. We incurred approximately $210.4 million in capital expenditures, primarily drilling and completion costs, during 2019. We expect to further develop our properties through additional drilling. 

