MHR exploration strategy is predicated upon the two core tenets of the oil and natural gas industry.  First, that the only competitive advantage in the commodity-based oil and natural gas business is to be among the lowest cost producers. Second, that virtually all the exploration and production industry’s value creation occurs through the drilling of successful exploratory wells. To this end, our business strategy includes the following elements:  

Participation in exploration prospects as a non-operator.  For the foreseeable future, MHR intends to pursue prospects in partnership with other companies with exploration, development and production expertise.  MHR will participate as a non-operator and will evaluate each prospect based on its geological and geophysical merits and, in part, on the operator’s track record and resources.

Leasing of Prospective Acreage.  In the course of our business, MHR may identify drilling opportunities that have not yet been leased.  As such, MHR may take the initiative to lease prospective acreage and, in turn, sell all or any portion of the leased acreage to other companies that may want to participate in drilling and development of the prospect acreage.

Negotiated acquisitions of properties.  MHR may acquire producing properties based on our view of the pricing cycles of oil and natural gas and available exploitation opportunities of proved, probable and possible reserves.

Controlling general and administrative and geological and geophysical costs.  MHR's goal is to be among the highest in the industry in revenue and profit per employee and among the lowest in general and administrative costs.  MHR intend to maximize returns on capital by minimizing our executive salaries and up-front costs in seismic data, hardware, software, geological and geophysical overhead and prospect generation.  MHR also intend to outsource our geological, geophysical, reservoir engineering and land functions, and partner with cost efficient operators whenever possible