1034755--3/9/2007--BRIGHAM_EXPLORATION

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{stock, price, share}

{stock, price, operating}

{loss, insurance, financial}

{cost, contract, operation}

{cost, regulation, environmental}

{personnel, key, retain}

{competitive, industry, competition}

{provision, law, control}

{acquisition, growth, future}

Oil and natural gas prices are volatile and a substantial reduction in these prices could adversely affect our results and the price of our common stock. We may have difficulty financing our planned capital expenditures, which could adversely affect our business. 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. 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 unavailability 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 result in a curtailment of production and revenues. 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. Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt, including secured debt. 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. The indenture governing the Senior Notes imposes, and our senior credit agreement imposes, significant operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some actions. We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the Senior Notes. Lower oil and natural gas prices may cause us to record ceiling limitation write-downs, which would reduce our stockholders equity. 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. Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks. 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. We depend on our key management personnel and technical experts and the loss any of these individuals could adversely affect our business. 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 do not intend to pay any dividends on our common stock. Our shares that are eligible for future sale may have an adverse effect on the price of our common stock. Certain of our affiliates control a substantial portion of our outstanding common stock, which may affect your vote as a stockholder. Certain anti-takeover provisions may adversely affect your rights as a stockholder.

Full 10-K form ▸

1034755--3/9/2007--BRIGHAM_EXPLORATION_CO