Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2014


The Company is engaged in proceedings incidental to the normal course of business.  Due to their nature, such legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations between affected parties and governmental intervention.  Based upon the information available to the Company and discussions with legal counsel, it is the Company’s opinion that the outcome of the various legal actions and claims that are incidental to its business will not have a material impact on the financial position, results of operations or cash flows.  Such matters, however, are subject to many uncertainties, and the outcome of any matter is not predictable with assurance.  For the year ended December 31, 2014, the Company’s general and administrative expense included $0.6 million in dispute settlement expenses.

The Company is party to a quiet title action in North Dakota that relates to its interest in certain crude oil and natural gas leases.  In the event the action results in a final judgment that is adverse to the Company, the Company would be required to reverse approximately $1.7 million in revenue (net of accrued taxes) that has been accrued since the second quarter of 2008 based on the Company’s purported interest in the crude oil and natural gas leases at issue, $0.2, $0.3 million and $0.2 million of which relates to the years ended December 31, 2014, 2013 and 2012, respectively.  The Company fully maintains the validity of its interest in the crude oil and natural gas leases, and is vigorously defending such interest.