750561--2/28/2007--PARALLEL_PETROLEUM

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{loss, insurance, financial}

{stock, price, share}

{operation, natural, condition}

{acquisition, growth, future}

{loan, real, estate}

{control, financial, internal}

{personnel, key, retain}

{provision, law, control}

{competitive, industry, competition}

{regulation, change, law}

{condition, economic, financial}

{cost, contract, operation}

We must replace oil and natural gas reserves that we produce. Failure to replace reserves may negatively affect our business. We are subject to uncertainties in reserve estimates and future net cash flows. Competition in the oil and natural gas industry is intense, and many of our competitors have greater financial, technological and other resources than we do. We do not control all of our operations and development projects. Our business involves many operating risks, which may result in substantial losses, and insurance may be unavailable or inadequate to protect us against these risks. The oil and natural gas industry is capital intensive. There are risks in acquiring producing properties, including difficulties in integrating acquired properties into our business, additional liabilities and expenses associated with acquired properties, diversion of management attention, increasing the scope, geographic diversity and complexity of our operations and incurrence of additional debt. The marketability of our natural gas production depends on facilities that we typically do not own or control. If we default under either our revolving credit facility or our term loan facility, the lenders could foreclose on, and acquire control of, substantially all of our assets. We are subject to many restrictions under our two credit facilities. Our producing properties are geographically concentrated. Our derivative activities create a risk of financial loss. We are subject to complex federal, state and local laws and regulations that could adversely affect our business. Declining oil and natural gas prices may cause us to record ceiling test write-downs. Terrorist activities may adversely affect our business. We are highly dependent upon key personnel. Part of our business is seasonal in nature. Our oil and natural gas operations are subject to many inherent risks. Failure to maintain effective internal controls could have a material adverse effect on our operations. Restrictive debt covenants could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. We do not pay dividends on our common stock. Our stockholders rights plan, provisions in our corporate governance documents and Delaware law may delay or prevent an acquisition of Parallel, which could decrease the value of our common stock. Future sales of our common stock could adversely affect our stock prices. Our business can be adversely impacted by downward changes in oil and natural gas prices, and most significantly by declines in oil prices.

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750561--2/28/2007--PARALLEL_PETROLEUM_CORP