319156--9/28/2010--CUBIC_ENERGY

related topics

{gas, price, oil}

{cost, regulation, environmental}

{stock, price, share}

{regulation, change, law}

{interest, director, officer}

{loss, insurance, financial}

{control, financial, internal}

{cost, contract, operation}

{stock, price, operating}

{provision, law, control}

{personnel, key, retain}

{competitive, industry, competition}

{acquisition, growth, future}

{loan, real, estate}

Fluctuations in oil and natural gas prices, which have been volatile at times, may adversely affect our revenues as well as our ability to maintain or increase our borrowing capacity, repay current or future indebtedness and obtain additional capital. We face significant competition, and many of our competitors have resources in excess of our available resources. Exploratory drilling is a speculative activity that may not result in commercially productive reserves and may require expenditures in excess of budgeted amounts. We may not identify all risks associated with the acquisition of oil and natural gas properties, and any indemnifications we receive from sellers may be insufficient to protect us from such risks, which may result in unexpected liabilities and costs to us. We have a history of operating losses and may not be profitable. If we are not able to achieve and maintain profitability in the future, we might not be able to access funds through debt or equity financings. We have substantial capital requirements necessary for undeveloped properties for which we may not be able to obtain adequate financing. We are subject to uncertainties in reserve estimates and future net cash flows. We are subject to various operating and other casualty risks that could result in liability exposure or the loss of production and revenues. We cannot control the development of the properties we own but do not operate, which may adversely affect our production, revenues and results of operations. New SEC and GAAP reserve reporting requirements may affect the results of our reserve estimates and could change our relative positioning in the industry with regard to reserve estimates. Our business may suffer if we lose key personnel. Certain of our affiliates control a majority of our outstanding common stock, which may affect other shareholders ability to influence matters submitted to a vote of shareholders. Certain of our affiliates have engaged in business transactions with the Company, which may result in conflicts of interest. The liquidity, market price and volume of our stock are volatile, and our stock is subject to certain penny stock rules. We may experience adverse consequences because of required indemnification of officers and directors. Certain anti-takeover provisions may discourage a change in control. We do not intend to declare cash dividends on Common Stock in the foreseeable future. Our internal controls over financial reporting may not be effective, which could have a significant and adverse effect on our business. We may not have satisfactory title or rights to our properties. Governmental regulations could adversely affect our business. Environmental liabilities could adversely affect our business. Climate change legislation, regulation and litigation could materially adversely affect us. Horizontal drilling activities could be subject to increased regulation and could expose us to environmental risks that could adversely affect us. We may be responsible for additional costs in connection with abandonment of properties.

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319156--9/28/2010--CUBIC_ENERGY_INC