1340282--4/20/2006--Rosetta_Resources

related topics

{gas, price, oil}

{stock, price, share}

{loss, insurance, financial}

{debt, indebtedness, cash}

{acquisition, growth, future}

{interest, director, officer}

{operation, natural, condition}

{financial, litigation, operation}

{cost, regulation, environmental}

{loan, real, estate}

{control, financial, internal}

{provision, law, control}

{personnel, key, retain}

{competitive, industry, competition}

{regulation, change, law}

Calpine s recent bankruptcy filing may adversely affect us in several respects. Oil and natural gas prices are volatile, and a decline in oil and natural gas prices would significantly affect our financial results and impede our growth. Development and exploration drilling activities do not ensure reserve replacement and thus our ability to produce revenue. Counterparty credit default could have an adverse effect on us. We sell a significant amount of our production to one customer. Unless we replace our oil and natural gas reserves, our reserves and production will decline. We will require additional capital to fund our future activities. If we fail to obtain additional capital, we may not be able to implement fully our business plan, which could lead to a decline in reserves. The terms of our credit facilities contain a number of restrictive and financial covenants that limit our ability to pay dividends. If we are unable to comply with these covenants, our lenders could accelerate the repayment of our indebtedness. Properties we acquire may not produce as expected, and we may be unable to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against such liabilities. Our exploration and development activities may not be commercially successful. Numerous uncertainties are inherent in our estimates of oil and natural gas reserves and our estimated reserve quantities and present value calculations may not be accurate. Any material inaccuracies in these reserve estimates or underlying assumptions will affect materially the estimated quantities and present value of our reserves. We are subject to complex government regulation that could adversely affect our operations. Our business requires technical expertise, specialized knowledge and training and a high degree of management experience. Our results are subject to commodity price fluctuations related to seasonal and market conditions and reservoir and production risks. The ultimate outcome of the legal proceedings relating to our activities cannot be predicted. Any adverse determination could have a material adverse effect on our financial condition, results of operations or cash flows. Market conditions or transportation impediments may hinder our access to oil and natural gas markets or delay our production. Competition in the oil and natural gas industry is intense, and many of our competitors have resources that are greater than ours. Operating hazards, natural disasters or other interruptions of our operations could result in potential liabilities, which may not be fully covered by our insurance. Environmental liabilities could adversely affect our financial condition. Our acquisition strategy could fail or present unanticipated problems for our business in the future, which could adversely affect our ability to make acquisitions or realize anticipated benefits of those acquisitions. We are vulnerable to risks associated with operating in the Gulf of Mexico. Hedging transactions may limit our potential gains. The historical financial results of the domestic oil and natural gas business of Calpine may not be representative of our results as a separate company. Failure to achieve and maintain effective internal control over financial reporting in accordance with the rules of the SEC could harm our business. Our prior and continuing relationship with Calpine exposes us to risks attributable to Calpine s businesses and credit worthiness. If we are unable to obtain governmental approvals arising from the acquisition, we may not acquire all of Calpine s domestic oil and gas business. The ongoing SEC informal inquiry relating to the downward revision of the estimate of continuing proved reserves, while owned by Calpine, could have a material adverse effect on the presentation of our predecessor financial statements. Future sales of our common stock may cause our stock price to decline. Stock sales and purchases by institutional investors or stockholders with significant holdings could have significant influence over our stock volatility and our corresponding ability to raise capital through debt or equity offerings. You may experience dilution of your ownership interests because of the future issuance of additional shares of our common and preferred stock. Provisions under Delaware law, our certificate of incorporation and bylaws could delay or prevent a change in control of our company, which could adversely affect the price of our common stock.

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1340282--4/20/2006--Rosetta_Resources_Inc.