56868--4/6/2006--PRIMEENERGY

related topics

{gas, price, oil}

{loss, insurance, financial}

{operation, natural, condition}

{cost, regulation, environmental}

{competitive, industry, competition}

{personnel, key, retain}

Drilling natural gas and oil wells is a high-risk activity. Reserve estimates depend on many assumptions that may prove to be inaccurate. Any material inaccuracies in our reserve estimates or underlying assumptions could cause the quantities and net present value of our reserves to be overstated. Our future performance depends on our ability to find or acquire additional natural gas and oil reserves that are economically recoverable. We face a variety of hazards and risks that could cause substantial financial losses. We have limited control over the activities on properties we do not operate. Terrorist activities and the potential for military and other actions could adversely affect our business. Our ability to sell our natural gas and oil production could be materially harmed if we fail to obtain adequate services such as transportation and processing Competition in our industry is intense, and many of our competitors have substantially greater financial and technological resources than we do, which could adversely affect our competitive position. We may have hedging arrangements that expose us to risk of financial loss and limit the benefit to us of increases in prices for natural gas and oil. The loss of key personnel could adversely affect our ability to operate. We are subject to complex laws and regulations, including environmental regulations, which can adversely affect the cost, manner or feasibility of doing business.

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56868--4/6/2006--PRIMEENERGY_CORP