1034755--3/1/2010--BRIGHAM_EXPLORATION

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{loss, insurance, financial}

{stock, price, share}

{stock, price, operating}

{cost, contract, operation}

{cost, regulation, environmental}

{interest, director, officer}

{regulation, change, law}

{personnel, key, retain}

{competitive, industry, competition}

{provision, law, control}

{acquisition, growth, future}

The ongoing financial uncertainty could negatively impact the prices for oil and natural gas, limit access to the credit and equity markets, increase the cost of capital, and may have other negative consequences that we cannot predict. Our level of indebtedness may adversely affect our cash available for operations, which would limit our growth, our ability to make interest and principal payments on our indebtedness as they become due and our flexibility to respond to market changes. The indenture governing the Senior Notes and the documents governing our Senior Credit Facility impose significant operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some actions. Availability under our Senior Credit Facility is based on a borrowing base which is subject to redetermination by our lenders. If our borrowing base is reduced, we may be required to repay amounts outstanding under our Senior Credit Facility. We may incur additional indebtedness. This could further exacerbate the risks associated with our substantial leverage. To service our indebtedness we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. Failure to generate sufficient cash to service our indebtedness could adversely affect our business, financial condition and results of operations. Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks. The results of our planned drilling in the Bakken and Three Forks objectives, an emerging play with limited drilling and production history, are subject to more uncertainties than our drilling program in the more established formations and may not meet our expectations for reserves or production. The proposed United States federal budget for fiscal year 2010 and other pending legislation contain certain provisions that, if passed as originally submitted, will have an adverse effect on our financial position, results of operations, and cash flows. We depend on our key management personnel and technical experts and the loss any of these individuals could adversely affect our business. Lower oil and natural gas prices may cause us to record ceiling limitation writedowns, which would reduce our stockholders equity. We may have difficulty financing our planned capital expenditures, which could adversely affect our business. Certain of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are extended. Our exploration, development and drilling efforts and the operation of our wells may not be profitable or achieve our targeted returns. Exploratory drilling is a speculative activity that may not result in commercially productive reserves and may require expenditures in excess of budgeted amounts. Although our oil and natural gas reserve data is independently estimated, these estimates may still prove to be inaccurate. We need to replace our reserves at a faster rate than companies whose reserves have longer production periods. Our failure to replace our reserves would result in decreasing reserves and production over time. Our reserves in the Gulf Coast have high initial production rates followed by steep declines in production, resulting in a reserve life for wells in this area that is shorter than the industry average. This production volatility has impacted and, in the future, may continue to impact our quarterly and annual production levels. Drilling locations that we decide to drill may not yield oil or natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return. The lack of availability or high cost of drilling rigs, equipment, supplies, insurance, personnel and oil field services could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budget. The marketability of our oil and natural gas production depends on services and facilities that we typically do not own or control. The failure or inaccessibility of any such services or facilities could affect market based prices or result in a curtailment of production and revenues. We are subject to various operating and other casualty risks that could result in liability exposure or the loss of production and revenues. We may not have enough insurance to cover all of the risks we face, which could result in significant financial exposure. We cannot control activities on properties we do not operate. Failure to fund capital expenditure requirements may result in reduction or forfeiture of our interests in some of our non-operated projects. Our future operating results may fluctuate and significant declines in them would limit our ability to invest in projects. We face significant competition and many of our competitors have resources in excess of our available resources. We are subject to various governmental regulations and environmental risks that may cause us to incur substantial costs. The adoption of climate change legislation by Congress could result in increased operating costs and reduced demand for the oil and natural gas we produce. The market price of our stock is volatile. Our stock price may decline when our financial results decline or when events occur that are adverse to us or our industry. We are prohibited from paying dividends on our common stock. Certain anti-takeover provisions may adversely affect your rights as a stockholder.

Full 10-K form ▸

1034755--3/1/2010--BRIGHAM_EXPLORATION_CO