869369--4/15/2010--MERIDIAN_RESOURCE

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{loss, insurance, financial}

{cost, regulation, environmental}

{interest, director, officer}

{personnel, key, retain}

{operation, natural, condition}

{capital, credit, financial}

{stock, price, share}

As a result of our current lack of financial liquidity, we have received a going concern modification to our independent registered public accounting firm s opinion on our consolidated financial statements. If the merger with Alta Mesa is not completed, we may be forced to liquidate or to otherwise seek protection under federal bankruptcy laws. Our efforts to cure the deficiency under the Credit Facility may not be successful and we may be required to seek bankruptcy protection under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code ). Even if our efforts are successful, we may still be required to seek protection under the Bankruptcy Code to consummate a corporate transaction such as a merger or sale of the Company. Our common stock could be delisted from the New York Stock Exchange. Our Credit Facility has substantial restrictions and financial covenants. We are currently in default under, and it is unlikely that we will be able to return to compliance with, certain of the covenants in our Credit Facility, including our covenant to maintain a ratio of current assets to current liabilities of not less than 1.0 to 1.0, and our covenant to deliver to our Lenders audited financial statements for each fiscal year that do not have a going concern or like qualification or exception. Our Credit Facility has periodic borrowing base redeterminations and we will have difficulty maintaining our total borrowing base at the current level of $60 million at future redeterminations, or maintaining or obtaining additional credit at similar terms, which could adversely affect our operations. Because of the recent deterioration of the credit and capital markets, we may be unable to obtain financing from sources other than our Credit Facility on acceptable terms or at all. We have significant near-term contractual obligations, which we may not be able to meet; our working capital is currently a net deficit. If oil or natural gas prices decrease or exploration and development efforts are unsuccessful, we may be required to take further write-downs. The oil and natural gas markets are volatile and expose us to financial risks. Our hedging transactions may not adequately prevent losses. Our reserve estimates may prove to be inaccurate and future net cash flows are uncertain. We depend on key personnel to execute our business plans. We compete against significant players in the oil and natural gas industry, and our failure in the long-term to complete future property acquisitions successfully and generate commercial exploration and development drilling opportunities could reduce our earnings and cause revenues to decline. The oil and natural gas markets are heavily regulated. The nature of our operations exposes us to environmental liabilities. Our operations entail inherent casualty risks for which we may not have adequate insurance. Our operations also entail significant operating risks. We may not be able to effectively market our oil and natural gas production. We are dependent on other operators who influence our productivity. Our working interest owners may face cash flow and liquidity concerns. Our drilling projects are based in part on seismic data, which is costly and cannot ensure the commercial success of the project. Our inability to develop new exploration prospects will inhibit our growth. Terrorist attacks and threats or actual war may negatively affect our business, financial condition and results of operations.

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869369--4/15/2010--MERIDIAN_RESOURCE_CORP