From time to time, the Company receives notice from other operators of their intent to drill and operate a well in which the Company will own a working interest.  The Company has the option to participate in the well and assume the obligation for its pro-rata share of the costs.  As of February 28, 2014 the Company was participating in 12 horizontal and 5 directional wells that were in various stages of drilling or completion.  Costs accrued for these 17 wells in progress totaled $5.3 million.

Effective December 18, 2013, the Company amended its turn-key drilling contract with Ensign United States Drilling, Inc. (Ensign).  Under the contract, the Company secured the use of one automated drilling rig for one year.  Drilling operations under the contract commenced in early January 2014.  Total payments due to Ensign will depend upon a number of variables, including the depth of wells drilled, the target formation, and other technical details.  The Company estimates that during the remaining term of this contract, the rig will drill 20 horizontal wells with total drilling costs of approximately of $19 million.