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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes   x No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes   x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards* provided pursuant to Section 13(a) of the Exchange Act. o

*The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17   o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes   x No

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EXPLANATORY NOTES

Unless otherwise indicated or the context implies otherwise:

·                  “we,” “us,” “our” or “Sundance” refers to Sundance Energy Australia Limited, an Australian corporation, and its subsidiaries;

·      “ADSs” refers to our American Depositary Shares, each of which represents 100 ordinary shares;

·      “ADRs” refers to American Depositary Receipts, which evidence the ADSs;

·“SEC” refers to the Securities and Exchange Commission;

·                  “shares” or “ordinary shares” refers to our ordinary shares; and

·                  “Netherland Sewell” refers to Netherland, Sewell & Associates, Inc., the independent engineering firm, that provided the estimates of proved oil and natural gas reserves as of December 31, 20142014; and 2013.

·                  “Ryder Scott” refers to Ryder Scott Company L.P., the independent engineering firm, that provided the estimates of proved oil and natural gas reserves as of December 31, 2016 and 2015.

We have also provided definitions for certain oil and natural gas terms used in this prospectus in the “Glossary of Oil and Natural Gas Terms” beginning on page A-1 of this annual report.

All references herein to “$” and “U.S. dollar” are to United States dollars. Except as otherwise stated, all monetary amounts in this annual report are presented in United States dollars.

Effective July 1, 2012, we changed our fiscal year end from June 30 to December 31. This change resulted in a six-month reporting period for our fiscal period ended December 31, 2012.

The disclosures in this annual report are based on the statutory financial information filed with the Australian Securities Exchange (the “ASX”) and the Australian Securities & Investments Commission. These annual report disclosures can be reconciled to those Australian filings with information contained in this annual report, however certain differences may exist as a result of the disclosure requirements under applicable U.S. and Australian rules. We do not believe that any of these differences are material.

FORWARD-LOOKING STATEMENTS

Certain statements in this annual report may constitute “forward-looking statements.” Such forward-looking statements are based on the beliefs of our management as well as assumptions based on information available to us. When used in this annual report, the words “anticipate,” “believe,” “estimate,” “project,” “intend” and “expect” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. Such forward-looking statements reflect our current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These include, but are not limited to, risks or uncertainties associated with our the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital, general economic and business conditions, environmental and other liability and other factors identified under Item 3.D. “Key Information—Risk Factors” of this annual report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this annual report as anticipated, believed, estimated or expected. Accordingly, you should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this annual report and will not be revised or updated to reflect events after the date of annual report.

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may avail itself of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. For example, we have elected to rely on an exemption from the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act of 2002 (the “Sarbanes Oxley Act”) relating to internal control over financial reporting, and we will not provide such an attestation from our auditors.

We will remain an emerging growth company until the earliest of the following:

·                  the end of the first fiscal year in which the market value of our ordinary shares that are held by non affiliatesnon-affiliates is at least $700 million as of the end of the second quarter of such fiscal year;

·                  the end of the first fiscal year in which we have total annual gross revenues of at least $1$1.07 billion; or

·                  the date on which we have issued more than $1 billion in non convertiblenon-convertible debt securities in any rolling three year period.period; or

·                  December 31, 2020.

Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided for by the JOBS Act.

PART I

Item 1.  Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.  Offer Statistics and Expected Timetable

Not applicable.

Item 3.  Key Information

A.                                    Selected Financial Data

The following tables set forth summary historical financial data for the periods indicated. The selected consolidated financialstatement of operations data of the Company as at and for the years ended December 31, 2016, 2015 and 2014 and 2013the balance sheet information as of December 31, 2016 and 2015 have been derived from, and should be read in conjunction with, the audited consolidated financial statements and notes thereto set forth beginning on page F-1 of this annual report. The selected consolidated financialstatement of operations data as at and for the year ended December 31, 2013, the six-month period ended December 31, 2012 and the yearsyear ended June 30, 2012 and 2011the consolidated balance sheet information as at December 31, 2014, 2013, 2012 and June 30, 2012 are derived from the audited consolidated financial statements not appearing in this Annual Report. This data should be read in conjunction with the financial statements, related notes and other financial information included elsewhere herein. Our historical results do not necessarily indicate our expected results for any future periods.

Our financial statements have been prepared in U.S. dollars and in accordance with Australian Accounting Standards. Our financial statements comply with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

(1)           The Company filed an amendment to its Form 20-F for the fiscal year ended December 31, 2015 to correct an identified accounting error related to its income tax benefit and deferred tax liabilities.  The restated amounts are reflected in the table above.  Refer to Item 18, Note 7 for additional discussion.

(2)          Prior to the year ended December 31, 2013, our NGL sales were insignificant as compared to our overall gas sales and as such, were included in our natural gas sales.

(2)(3)           Adjusted EBITDAX is a supplemental non-IFRS financial measure. For a definition of Adjusted EBITDAX and a reconciliation of Adjusted EBITDAX to our profit (loss) attributable to owners of Sundance, see “—Adjusted“Adjusted EBITDAX” below.

(1)           The Company filed an amendment to its Form 20-F for the fiscal year ended December 31, 2015 to correct an identified accounting error related to its income tax benefit and deferred tax liabilities.  The restated amounts are reflected in the table above.  Refer to Item 18, Note 7 for additional discussion.

Adjusted EBITDAX

Adjusted EBITDAX is a supplemental non-IFRS financial measure that is used by our management and external users of our consolidated financial statements, such as investors, industry analysts and lenders.

We define “Adjusted EBITDAX” as earnings before interest expense, income taxes, depreciation, depletion and amortization, property impairments, gain/(loss) on sale of non-current assets, exploration expense, share-based compensation, and income and gains and losses on commodity hedging, net of settlements of commodity hedging.hedging and certain other non-cash or non-recurring income/expense items.

Our management believes Adjusted EBITDAX is useful because it allows us to more effectively evaluate our operating performance, identify operating trends (which may otherwise be masked by the excluded items) and compare the results of our operations from period to period without regard to our financing methods orpolicies and capital structure. We exclude the items listed above from profit attributable to owners of Sundance in arriving at Adjusted EBITDAX, because these amounts can vary substantially from company to company within our industry, depending upon accounting methodspolicies and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income or cash flows from operating activities as determined in accordance with IFRS, as issued by the IASB, or as an indicator of our operating performance or liquidity.

Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as cost of capital and tax structure, as well as the historic costs of depreciable assets. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDAX is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

The following table presents a reconciliation of the profit (loss) attributable to owners of Sundance to Adjusted EBITDAX:

(1) The Company filed an amendment to its Form 20-F for the fiscal year ended December 31, 2015 to correct an identified accounting error related to its income tax benefit and deferred tax liabilities. The restated amounts are reflected in the table above. Refer to Item 18, Note 7 for additional discussion.

(2) Includes non-recurring proceeds from an insurance settlement of $2.4 million and a litigation settlement of $1.2 million, offset by restructuring charges of $(0.8) million and other $(0.1) million for the year ended December 31, 2016.

B.                                    Capitalization and Indebtedness

Not applicable.

C.                                    Reasons for Offer and Use of Proceeds

Not applicable.

D.                                    Risk Factors

Risks Related to the Oil and Natural Gas Industry and Our Business

Our future revenues are dependent on our ability to successfully replace our proved producing reserves.Oil,

Our business strategy is to generate profit through the acquisition, exploration, development and production of oil and natural gas reserves. Future success therefore depends on our ability to find, develop or acquire additional oil and natural gas reserves that are economically recoverable. Further to this, our proved reserves generally decline when produced, unless we conduct successful exploration or development activities or acquire properties containing proved reserves or both. We may not be able to find, develop or acquire additional reserves on an economically viable basis. Furthermore, if oil and natural gas prices increase, the cost of finding, developing or acquiring additional reserves could also increase.

Exploration and development activities involve numerous risks, including the risk that no commercially productive oil or natural gas reservoirs will be discovered. In addition, the future cost and timing of drilling, completing and operating wells is often uncertain. Furthermore, drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:

·                  lack of prospective acreage available on acceptable terms;

·                  unexpected or adverse drilling conditions;

·                  elevated pressure or irregularities in geologic formations;

·                  equipment failures or accidents;

·                  adverse weather conditions;

·                  title problems;

·                  limited availability of financing upon acceptable terms;

·                  reductions in oil and natural gas prices;

·                  compliance with governmental requirements; and

·                  shortages or delays in the availability of drilling rigs, equipment and personnel.

Even if our drilling efforts are successful, our wells, once completed, may not produce reserves of oil or natural gas that are economically viable or that meet our prior estimates of economically recoverable reserves. Unsuccessful drilling activities could result in a significant decline in our production and revenues and materially harm our operations and financial position by reducing our available cash and liquidity. In addition, the potential for production decline rates for our wells could be greater than we expect. Because of the risks and uncertainties inherent to our businesses, our future drilling results may not be comparable to our historical results described elsewhere in this annual report.

Oil, natural gas and NGL prices are volatile.  A substantial or extended decline in the price of these commodities may adversely affect our business, financial condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments.

Our revenues, profitability, liquidity, ability to access capital and future growth prospects are highly dependent on the prices we receive for our oil, natural gas and NGLs. The prices of these commodities are subject to wide fluctuations in response to relatively minor changes in supply and demand.  Historically, the markets for oil, natural gas and NGLs have been volatile, and we expect this volatility may continue in the future.to continue.  For example, average daily prices for NYMEX-WTI crude oil ranged from a high of $54.01 per barrel to a low of $26.19 per barrel during 2016. The prices we receive for our production and the levels of our production depend on numerous factors beyond our control. These factors include:

·                  general worldwide and regional economic and political conditions;

·                  the domestic and global supply of, and demand for, oil, natural gas and NGLs;

·                  the cost of exploring for, developing, producing and marketing oil, natural gas and NGLs;

·                  the proximity, capacity, cost and availability of oil, natural gas and NGL pipelines and other transportation facilities;

·                  the price and quantity of imports of foreign oil, natural gas and NGLs;

·                  the level of global oil, natural gas and NGL exploration and production;

·                  the level of global oil, natural gas and NGL inventories;

·                  weather conditions and natural disasters;

·                  domestic and foreign governmental laws, regulations and taxes;

·                  volatile trading patterns in commodities futures markets;

·                  price and availability of competitors’ supplies of oil, natural gas and NGLs;

·                  shareholder activism or activities by non-governmental organizations to restrict the exploration, development and production of oil and natural gas and related infrastructure;

·the actions of the Organization of Petroleum Exporting Countries (“OPEC”) and the ability of OPEC and other producing nations to agree to and maintain production levels;

·                  technological advances affecting energy consumption; and

·                  the price and availability of alternative fuels.

Further, oil, natural gas and NGL prices do not necessarily fluctuate in direct relationship to each other. Because approximately 69%63% and 17% of our estimated proved reserves as of December 31, 2015 was2016 were attributed to oil and NGLs, our financial results are more sensitive to movements in oil prices. The price of oil has been extremely volatile, and we expect this volatility to continue for the foreseeable future. Substantially all of our oil production is sold to purchasers under short-term (less than 12 months) contracts at market-based prices.

Prolonged or substantialfurther sustained declines in oil, natural gas and NGL prices may have the following effects on our business:

·                  reducing our revenues, operating income and cash flows;

·                  adversely affecting our financial condition, liquidity, results of operations and our ability to meet our capital expenditure obligations and financial commitments;

·                  limiting our access to, or increasing the cost of, sources of capital, such as equity and long-term debt (including our borrowing capacity under our existing credit facilities);

·                  reducing the amount of oil, natural gas and NGLs that we can produce economically;

·                  reducing the amounts of our estimated proved oil, natural gas and NGLs reserves;

·                  reducing the standardized measure of discounted future net cash flows relating to oil, natural gas and NGL reserves;

·                  causing us to delay or postpone certain of our capital projects; and

·                  reducing the carrying value of our oil and natural gas properties.

As of December 31, 2015,2016, we have commodity price hedging agreements on approximately 53%40% of our expected Boe production for 2016.2017. To the extent we are unhedged, we have significant exposure to adverse changes in the prices of oil, and natural gas and NGLs that could materially and adversely affect our business and results of operations.

Our future revenues are dependent on our ability to successfully replace our proved producing reserves.

Our business strategy is to generate profit through the acquisition, exploration, development and production of oil and natural gas reserves. Proved reserves generally decline when produced, unless we conduct successful exploration or development activities or acquire properties containing proved reserves or both. We may not be able to find, develop or acquire additional reserves on an economically viable basis. Furthermore, if oil and natural gas prices increase, the cost of finding, developing or acquiring additional reserves could also increase.

Drilling for and producing oil, natural gas and NGLs are high risk activities with many uncertainties that could adversely affect our business, financial condition and results of operations.

Exploration and development activities involve numerous risks, including the risk that no commercially productive oil or natural gas reservoirs will be discovered. In addition, the future cost and timing of drilling, completing and operating wells is often uncertain. Furthermore, drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:

·                  lack of prospective acreage available on acceptable terms;

·                  unexpected or adverse drilling conditions;

·                  elevated pressure or irregularities in geologic formations;

·                  equipment failures or accidents;

·                  adverse weather conditions;

·                  title problems;

·                  limited availability of financing upon acceptable terms;

·                  reductions in oil, natural gas and NGL prices;

·                  compliance with governmental requirements; and

·                  shortages or delays in the availability of drilling rigs, equipment and personnel.

Even if our exploration, development and drilling efforts are successful, our wells, once completed, may not produce reserves of oil, natural gas or NGLs that are economically viable or that meet our prior estimates of economically recoverable reserves. Unsuccessful drilling activities could result in a significant decline in our production and revenues and materially harm our operations and financial position by reducing our available cash and liquidity. In addition, the potential for production decline rates for our wells could be greater than we expect. Because of the risks and uncertainties inherent to our businesses, our future drilling results may not be comparable to our historical results described elsewhere in this annual report.

Our exploration, development and exploitation projects require substantial capital expenditures. We may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a decline in our oil and natural gas reserves with resulting adverse effects on our cash flow and liquidity.

The oil and natural gas industry is capital intensive. We make and expect to continue to make substantial capital expenditures in our business for the development, exploitation, production and acquisition of oil, and natural gas and NGL reserves. The actual amount and timing of our future capital expenditures may differ materially from our estimates as a result of, among other things, commodity prices, actual drilling results, the availability of drilling rigs and other services and equipment, and regulatory, technological and competitive developments. Although weWe intend to operate withinfinance our downcycle development plan in 2016 by financing our capital expenditures2017 primarily with only our cash flows from operations and our previously announced Mississippian/Anadarko asset sale, but we may also finance our future capital expenditures through a variety of other sources, including through borrowings under ouravailable credit facilities, andadditional asset sales. However, our financing needssales, or through the issuance of debt and/or equity, which may require us to alter or increase our capitalization substantially through the issuance of debt or equity securities or the sale of assets.substantially.

Our cash flows from operations and access to capital are subject to a number of variables, including:

·                  our proved reserves;

·                  the volume of oil and natural gas we are able to produce and sell from existing productive wells;

·                  the prices at which our oil and natural gas are sold;

·                  the cost at which our oil and natural gas are extracted;

·                  global credit and securities markets;

·our ability to acquire, locate and produce new reserves and the cost of such reserves; and

·                  the ability of our bankslenders to provide us with credit or additional borrowing capacity.

If our revenues or the amounts we can borrow under ouravailable credit facilities decrease as a result of lower oil or natural gas prices, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations at current levels. If additional capital is needed, we may not be able to obtain debt or equity financing on favorable terms acceptable to us, or at all. If cash generated by operations or cash available under our credit facilities is not sufficient to meet our capital requirements, the failure to obtain additional financing could result in a curtailment of our operations relating to development of our prospects, which in turn could lead to a decline in our oil and natural gas reserves and production levels, and could adversely affect our business, financial condition and results of operations.

Our level of indebtedness may reduce our financial flexibility.

We intend to fund our capital expenditures through a combination of cash flow from operations, borrowings under available credit facilities and, if necessary, alternative debt or equity financings. As of the date of this report we did not have any incremental borrowing capacity under our current credit agreement with Morgan Stanley (“Credit Agreement”), and as a result our ability to make the necessary capital investment to maintain or expand our asset base and develop oil and natural gas reserves will be impaired if cash flow from operations is reduced and external sources of capital become limited or unavailable. If we obtain alternative debt or equity financing for these or other purposes, the related risks that we now face could intensify. Our level of debt could adversely affect our business and results of operations in several important ways, including the following:

·                  a portion of our cash flow from operations would be used to pay interest on borrowings;

·                  the covenants contained in available credit facilities limit our ability to borrow additional funds, pay dividends, dispose of assets or issue shares of preferred stock and otherwise may affect our flexibility in planning for, and reacting to, changes in general business and economic conditions;

·                  a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes;

·                  a leveraged financial position would make us more vulnerable to economic downturns and decreases in commodity prices and could limit our ability to withstand competitive pressures; and

·                  any debt that we incur under our existing senior secured revolving credit facility will be at variable rates, which could make us vulnerable to an increase in interest rates.

Operating hazards, natural disasters or other interruptions of our operations could result in potential liabilities, which may not be fully covered by our insurance.

The oil and natural gas business involves operating hazards such as:

·                  well blowouts;

·                  mechanical failures;

·                  fires and explosions;

·                  pipe or cement failures and casing collapses, which could release natural gas, oil, drilling fluids or hydraulic fracturing fluids;

·                  uncontrollable flows of oil, natural gas or well fluids;

·                  fires;

·                  geologic formations with abnormal pressures;

·                  handling and disposal of materials, including drilling fluids and hydraulic fracturing fluids;

·                  pipeline ruptures or spills;

·                  inclement weather;

·releases of toxic gases; and

·                  other environmental hazards and risks.risks (including groundwater contamination).

Any of these hazards and risks can result in the loss of hydrocarbons, environmental pollution, personal injury claims, regulatory investigation, penalties and suspension of operation and other damage to our properties and the property of others.

We maintain insurance against losses and liabilities in accordance with customary industry practices and in amounts that our management believes to be prudent. However, insurance against all operational risks is not available to us. We do not carry business interruption insurance. We may elect not to carry insurance if our management believes that the cost of available insurance is excessive relative to the risks presented.

In addition, losses could occur for uninsured risks or in amounts in excess of existing insurance coverage. We cannot insure fully against pollution and environmental risks. We cannot assure investors that we will be able to maintain adequate insurance in the future at rates we consider reasonable or that any particular types of coverage will be available. The occurrence of an event not fully covered by insurance could have a material adverse effect on our financial position and results of operations.

SEC rules could limit our ability to book additional PUDs in the future.

SEC rules require that, subject to limited exceptions, our PUDs may only be booked if they relate to wells scheduled to be drilled within five years after the date of booking. This requirement limits our ability to book additional PUDs as we pursue our drilling program. Moreover, we may be required to write-down our PUDs if we do not drill those wells within the required five-year time

frame, or if oil and natural gas prices decrease, making the PUDs uneconomic.  Lower PV-10 value, resulting from fewer PUDs  may negatively impact investor perception of our Company.

Our planned exploratory drilling involves drilling in existing or emerging shale plays using the latest available horizontal drilling and completion techniques, which are subject to risks. As a result, drilling results may not meet our expectations for reserves or production.

Our operations involve utilizing the latest drilling and completion techniques as developed by us and our service providers in order to maximize cumulative recoveries and therefore generate the highest possible returns. Risks that we face while drilling include, but are not limited to:

·                  landing our well bore in the desired formation;

·                  staying in the desired formation while drilling horizontally through the formation;

·                  running our casing the entire length of the well bore; and

·                  being able to run tools and other equipment consistently through the well bore.

Risks that we face while completing our wells include, but are not limited to:

·                  being able to fracture stimulate the planned number of stages;

·                  being able to run tools the entire length of the well bore during completion operations; and

·                  successfully cleaning out the well bore after completion of the final fracture stimulation stage.

The results of our drilling in new or emerging formations are more uncertain initially than drilling results in areas that are more developed and have a longer history of established production. Newer or emerging formations and areas have limited or no production history and, consequently, we are less able to predict future drilling results in these areas.

Ultimately, the success of these drilling and completion techniques can only be evaluated as more wells are drilled and production profiles are established over a sufficiently long time period. If our drilling does not meet our anticipated results are less than anticipated or we are unable to execute our drilling program because of capital constraints, lease expirations, access to gathering systems and limited takeaway capacity or otherwise and/or oil and natural gas prices decline, the return on our investment in these areas may not be as attractive as we anticipate. Further, as a result of any of these developments we could incur material write-downs of our oil and natural gas properties and the value of our undeveloped acreage could decline in the future.

Our identified drilling locations are scheduled to be developed over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.

Our plan and/or abilityfinal determination of whether to drill any scheduled or budgeted wells,will be dependent on a number of uncertainties,factors, including:

·                  the results of our exploration efforts;

·ongoing review and analysis of geologic and engineering data;

·                  the availability of sufficient capital resources to us and the other participants for drilling and completing of the prospects;

·                  the approval of the prospects by other participants once additional data has been compiled;

·                  economic and industry conditions at the time of drilling, including prevailing and anticipated prices for oil and natural gas and the availability and prices of drilling rigs and personnel; and

·                  the ability to maintain, extend or renew leases and permits on reasonable terms for the prospects.prospects;

·                  additional due diligence;

·                  regulatory requirements and restrictions; and

·                  the opportunity to divert our drilling budget to preferred prospects.

Although we have identified or budgeted for numerous drilling prospects, we may not be able to lease or drill those prospects within our expected time frame or at all. Wells that are currently part of our capital plan may be based on results of drilling activities in other areas that we believe are geologically similar to a prospect rather than on analysis of seismic or other data in the prospect area, in which case actual drilling and results are likely to vary, possibly materially, from results in other areas. In addition, our drilling schedule may vary from our expectations because of future uncertainties.uncertainties, and our ability to produce oil, natural gas and NGLs may be significantly affected by the availability and prices of equipment and personnel.

Our management team has specifically identified and scheduled certain drilling locations as an estimation of our future multi-year drilling activities on our existing properties. These locations represent a significant part of our growth strategy. Our ability to drill and develop these locations depends on a number of uncertainties, including crude oil and natural gas prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, gathering system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors. Because of these uncertain factors, we do not know if the numerous potential well locations we have identified will ever be drilled or if we will be able to produce oil, natural gas or NGLs from these or any other potential locations. In addition, unless production is established within the spacing units covering the undeveloped acres on which some of the potential locations are obtained, the leases for such acreage will expire. Therefore, our actual drilling activities may materially differ from those presently identified.

In addition, we will require significant additional capital over a prolonged period in order to pursue the development of these locations, and we may not be able to raise or generate the capital required to do so. Any drilling activities we are able to conduct on these potential locations may not be successful or result in the addition of proved reserves to our overall proved reserves or may result in a downward revision of our estimated proved reserves, which could have a material adverse effect on our future business and results of operations.

The unavailability or high cost of additional drilling rigs, equipment, supplies, personnel and oilfield services could adversely affect our ability to execute our development plans within our budget and on a timely basis.

The demand for drilling rigs, pipe and other equipment and supplies, as well as for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers and other professionals in the oil and natural gas industry, can fluctuate significantly, often in correlation with oil and natural gas prices, causing periodic shortages. Our operations are concentrated in areas in which the oil and gas industry has historically increased rapidly, and as a result, demand for such drilling rigs, equipment and personnel, as well as access to transportation, processing and refining facilities in these areas, and the costs for those items also increased. However, beginning in the second half of 2014, commodity prices began to decline and the demand for goods and services has subsided due to reduced activity. To the extent that commodity prices improve in the future, any delay or inability to secure the personnel, equipment, power, services, resources and facilities access necessary for us to maintain or increase our development activities could result in production volumes being below our forecasted volumes. In addition, any such negative effect on production volumes, or significant increases in costs, could have a material adverse effect on our cash flow and profitability. Furthermore, if we are unable to secure a sufficient number of drilling rigs at reasonable costs, we may not be able to drill all of our acreage before our leases expire.

Development of our PUDs may take longer than expected and may require higher levels of capital expenditures than we currently anticipate. Therefore, our estimated proved undeveloped reserves may not be ultimately developed or produced.

As of December 31, 2016, approximately 58% of our total proved reserves were proved undeveloped.  These reserve estimates reflected our plans to make significant capital expenditures to convert our proved undeveloped reserves into proved developed reserves.  Our approximately 17.0 MMBoe of estimated proved undeveloped reserves will require an estimated $247.4 million of development capital over the next five years. Development of these undeveloped reserves may take longer and require higher levels of capital expenditures than we currently anticipate. Delays in the development of our reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the PV-10 value of our estimated proved undeveloped reserves and future net revenues estimated for such reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could require us to reclassify our proved undeveloped reserves as unproved reserves.

Further, our reserves data assumes that we can and will make these expenditures and that these operations will be conducted successfully. These assumptions, however, may not prove correct. If we choose not to spend the capital to develop these reserves, or if we are not otherwise able to successfully develop these reserves, we will be required to write them off. Any such write-offs of our reserves could reduce our ability to borrow and adversely affect our liquidity and available capital.

Certain of our undeveloped leasehold acreage is subject to leases expiring over the next several years unless production is established on units containing the acreage.

Certain of our undeveloped leasehold acreage is subject to leases that will expire unless production is established. For these properties, if production in commercial quantities has not been established on the leased property or units that include the leased property containing these leases, our leases will expire and we will lose our right to develop the related properties. As of December 31, 2015, 33,8872016, 24,740 net acres of our total acreage position waswere not held by production. For the acreage underlying such properties, if production in paying quantities is not established on units containing these leases, approximately 6,226 net acres will expire in 2016, approximately 12,6805,726 net acres will expire in 2017, and approximately 14,98119,014 net acres will expire thereafter.in 2018.

Our drilling plans for these areas are subject to change based upon various factors, many of which are beyond our control, including:

·                  drilling results;

·                  oil and natural gas prices;

·                  the availability and cost of capital;

·                  drilling and production costs;

·                  the availability of drilling services and equipment;

·                  gathering system and pipeline transportation constraints; and

·                  regulatory approvals.

As a non-operating leaseholder in certain of our properties, we have less control over the timing of drilling and there is a higher risk of lease expirations occurring where we are not the operator. For certain properties in which we are a non-operating leaseholder, we have the right to propose the drilling of wells pursuant to a joint operating agreement. Those properties that are not subject to a joint operating agreement are located in states where state law grants us the right to force pooling.

Our producing properties are located primarily in Eagle Ford, making us vulnerable to risks associated with operating in a limited number of geographic areas.

Following the completion of the previously announced dispositions of our assets located in the Anadarko basin and  Mississippian/Woodford formations, all of our producing properties will be geographically concentrated in the Eagle Ford area. As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in these areas caused by governmental regulation, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages or other drought related conditions or interruption of the processing or transportation of oil, natural gas or NGLs, any of which could adversely affect our business, results of operations and financial condition.

We have limited control over activities in properties we do not operate, which could reduce our production and revenues.

We utilize joint operating agreements in some of our properties where we have less than 100% working interest. Other companies may be operators under these joint operating agreements and, as a minority working interest owner, we will be dependent to a degree on the efficient and effective management of the operators. The objectives and strategy of those operators may not always be consistent with our objectives and strategy. As a result, we have limited ability to exercise influence over, and control the risks associated with, operations of these properties. The failure of an operator of our wells to adequately perform operations, an operator’s breach of the applicable agreements or an operator’s failure to act in ways that are in our best interests could reduce our production and revenues or could create liability for the operator’s failure to properly maintain the well and facilities and to adhere to applicable safety and environmental standards. With respect to properties that we do not operate:

·                  the operator could refuse to initiate exploration or development projects;

·                  if we proceed with any of those projects the operator has refused to initiate, we may not receive any funding from the operator with respect to that project;

·                  the operator may initiate exploration or development projects on a different schedule than we would prefer;

·                  the operator may not approve of other participants in drilling wells;

·                  the operator may propose greater capital expenditures than we wish, including expenditures to drill more wells or build more facilities on a project than we have funds available, which may cause us to not fully participate in those projects or participate in a substantial amount of the revenues from those projects; and

·                  the operator may not have sufficient expertise or financial resources to develop such projects.

Any of these events could significantly and adversely affect our anticipated exploration and development activities. Under our joint operating agreements, we will be required to pay our percentage interest share of all costs and liabilities incurred by the operator on behalf of the working interest owners in connection with joint venture activities. In common with other working interest owners, if we fail to pay our share of any costs and liabilities, we may be deemed to have elected non-participation with respect to operations affected and we may be subject to loss of interest through foreclosure of operator liens invoked by participating working interest owners which may subject us to non-consent penalties.

We operated 93.3%87.1% of our total production for the year ended December 31, 2015.2016.

Our estimated proved reserves are based on many assumptions that may turn out to be inaccurate and any significant inaccuracies in these reserve estimates or underlying assumptions could materially affect the quantities and present value of our reserves.

There are uncertainties inherent in estimating oil and natural gas reserves and their estimated value, including many factors beyond our control. The reserve data in this annual report represent only estimates. Reservoir engineering is a subjective and inexact process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner and is based on assumptions that may vary considerably from actual results. Reservoir engineering also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. Accordingly, actual production, oil and natural gas prices, revenue, taxes, operating expenses, expenditures and quantities of recoverable oil and natural gas reserves will likely vary, possibly materially, from estimates. Any significant variance in our estimates or the accuracy of our assumptions could materially affect the estimated quantities and present value of reserves shown in this annual report.

Asreport, which could adversely affect business, results of December 31, 2015, approximately 58% of our total proved reserves were proved undeveloped.  These reserve estimates reflected our plans to make significant capital expenditures to convert our proved undeveloped reserves into proved developed reserves.  Decreases in future prices, unexpected results from development or downward actual cash flows vs. forecasts may impact the development of our proved undeveloped reserves.

SEC rules could limit our ability to book additional PUDs in the future.

SEC rules require that, subject to limited exceptions, our PUDs may only be booked if they relate to wells scheduled to be drilled within five years after the date of booking. This requirement limits our ability to book additional PUDs as we pursue our drilling program. Moreover, we may be required to write-down our PUDs if we do not drill those wells within the required five-year time frame, or if oiloperations and natural gas prices decrease, making the PUDs uneconomic.

The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and natural gas reserves.

The discounted future net cash flows in this annual report are not necessarily the same as the current market value of our estimated oil and natural gas reserves. As required by the current requirements for oil and natural gas reserve estimation and disclosures, the estimated discounted future net cash flows from proved reserves are based on the average of the sales price on the first day of each month in the applicable year, with costs determined as of the date of the estimate. Actual future net cash flows also will be affected by various factors, including:

·                  the actual prices we receive for oil and natural gas;

·                  our actual operating costs in producing oil and natural gas;

·                  the amount and timing of actual production;

·                  supply and demand for oil and natural gas;

·                  increases or decreases in consumption of oil and natural gas; and

·                  changes in governmental regulations or taxation.

In addition, the 10% discount factor we use when calculating discounted future net cash flows for reporting requirements may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with us or the oil and gas industry in general.financial condition.

Our derivative activities could result in financial losses or could reduce our income.

Because oil and natural gas prices are subject to volatility, we may periodically enter into price-risk-management transactions such as fixed-rate swaps, costless collars, puts, calls and basis differential swaps to reduce our exposure to price declines associated with a portion of our oil and natural gas production and thereby achieve a more predictable cash flow. The use of these arrangements limits our ability to benefit from increases in the prices of oil and natural gas. Our derivative arrangements may apply to only a portion of our production, thereby providing only partial protection against declines in oil and natural gas prices.

These arrangements may expose us to the risk of financial loss in certain circumstances, including instances in which production is less than expected, our customers fail to purchase contracted quantities of oil and natural gas or a sudden, unexpected event that materially impacts oil or natural gas prices. In addition, the counterparties under our derivatives contracts may fail to fulfill their contractual obligations to us.

If oil and natural gas prices continue to be depressed or decline further, we may be required to write-down the carrying values of our oil and natural gas properties.

We review our development and production and exploration and evaluation expenditure oil and natural gas properties for impairment whenever events and circumstances indicate that a decline in the recoverability of their carrying value may have occurred. Based on specific market factors and circumstances at the time of prospective impairment reviews and the continuing evaluation of development plans, production data, economics and other factors, we may be required to write-down the carrying value of our oil and natural gas properties. A write-down constitutes a non-cash charge to earnings.

The capitalized costs of our oil and natural gas properties, on an area of interest basis, cannot exceed the estimated discounted future net cash flows of that area of interest. If net capitalized costs exceed discounted future net revenues, we generally must write down the costs of each area of interest to the estimated discounted future net cash flows of that area of interest. We incurred impairment of development and production properties expense and impairment of exploration and evaluation expenditures properties expense totaling $2.3 million and $7.9 million, respectively, during 2016 and $184.4 million and $137.2 million, respectively, during 2015 and $71.2 million and nil, respectively, during 2014.2015.

Commodity prices significantly declined in 20142015 and 2015.2016. Continued declines in the prices of crude oil, natural gas, or NGLs or unsuccessful exploration efforts could cause additional development and production and/or exploration and evaluation expenditure property impairments in the future.

The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and natural gas reserves.

The discounted future net cash flows in this annual report are not necessarily the same as the current market value of our estimated oil and natural gas reserves. As required by the current requirements for oil and natural gas reserve estimation and disclosures, the estimated discounted future net cash flows from proved reserves are based on the average of the sales price on the first day of each month in the applicable year, with costs determined as of the date of the estimate. Actual future net cash flows also will be affected by various factors, including:

·                  the actual prices we receive for oil and natural gas;

·                  our actual operating costs in producing oil and natural gas;

·                  the amount and timing of actual production;

·                  supply and demand for oil and natural gas;

·                  increases or decreases in consumption of oil and natural gas; and

·                  changes in governmental regulations or taxation.

In addition, the 10% discount factor we use when calculating discounted future net cash flows for reporting requirements may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with us or the oil and gas industry in general.

Our inability to market our oil and natural gas could adversely affect our business.

Market conditions or the unavailability of satisfactory oil and natural gas transportation arrangements may hinder our access to oil and natural gas markets or delay production. The availability of a ready market for our oil and natural gas production depends on a number of factors, including the demand for and supply of oil and natural gas and the proximity of reserves to pipelines and gathering facilities. Our ability to market our production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities owned and operated by third parties. Our failure to obtain such services on favorable terms could adversely impact our business and results of operations.

Our productive properties may be located in areas with limited or no access to pipelines, thereby requiring compression facilities or delivery by other means, such as trucking and train. Such restrictions on our ability to sell our oil or natural gas may have several adverse effects, including higher transportation costs, fewer potential purchasers (thereby potentially resulting in a lower selling price) or, in the event we are unable to market and sustain production from a particular lease for an extended period of time, possibly resulting in the loss of a lease due to the lack of commercially established production.

We generally deliver our oil and natural gas production through gathering systems and pipelines that we do not own under interruptible or short-term transportation agreements. Under the interruptible transportation agreements, the transportation of our oil and natural gas production may be interrupted due to capacity constraints on the applicable system, for maintenance or repair of the system or for other reasons as dictated by the particular agreements.  Due to the lack of available pipeline capacity in certain regions in which we operate, we have entered into firm transportation agreements for a portion of our production in order to secure guaranteed capacity on major pipelines. We may also enter into firm transportation arrangements for additional production in the future. Because we are obligated to pay fees on minimum volumes to our service providers under these agreements regardless of actual volume throughput, these firm transportation agreements may be significantly more costly than interruptible or short-term transportation agreements, which could adversely affect our business and results of operations.

A portion of our oil and natural gas production in any region may be interrupted, or shut in, from time to time for numerous reasons, including as a result of weather conditions, accidents, loss of pipeline or gathering system access, or field personnel issues or strikes. We may also voluntarily curtail production in response to market conditions. If a substantial amount of our production is interrupted or curtailed, it could adversely affect our business and results of operations.

Borrowings under our Revolving Facility are limited by our borrowing base, which is subject to periodic redetermination.

We are parties to a credit agreement with Morgan Stanley Energy Capital Inc. as administrative agent (the “Credit Agreement”), providingOur Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Revolving Facility”) and a term loansloan of $125 million with an accordion feature for up to $50 million in additional term loans subject to certain conditions (the “Term Loans”Loan”).  Our Revolving Facility had a borrowing base of $67 million as of the date of this report, which was fully drawn.  Unless we are able to meet the conditions required to access the accordion feature of our Term Loans, asAs of the date of this report, we did not have any incremental borrowing capacity under our Credit Agreement.

The borrowing base under our Revolving Facility is redetermined at least semi-annually. Redeterminations are based upon a number of factors, including commodity prices and reserve levels. In addition, our lenders have substantial flexibility to reduce our borrowing base due to subjective factors. Upon a redetermination, we could be required to repay a portion of the debt owed under our Revolving Facility to the extent our outstanding borrowings at such time exceeds the redetermined borrowing base. We may not have sufficient funds to make such repayments, which could result in a default under the terms of our Revolving Facility and an acceleration of the loans outstanding under our Credit Agreement. Failure to timely pay these debt obligations when due could cause us to lose our assets through mortgage foreclosure, which would materially and adversely affect our business, results of operations and financial condition.

At December 31, 2015,2016, we had approximately $90.6$18.3 million of assets classified held for sale, certain of which were included in the borrowing base value under our Credit Agreement.  Upon the sale of these assets, our lenders may elect to reduce the then effective borrowing base by an amount equal to the value attributed to those assets if the value of the remaining assets doesn’t meet the prescribed asset coverage thresholds.  At December 31, 2015, 25% of our Eagle Ford assets represented approximately 24% of the borrowing base value so, ifIf the valuation was unchanged at the time of the sale, the lender could elect to require repayment of that pro rata portion of the outstanding debt which equates to approximately $45 million.debt.  That being said, there are many variables that affect the lender’s determination of borrowing base value at any point in time and therefore it is difficult for management to estimate the borrowing base value at an undetermined point in the future so the amount that would be required to be repaid, if any, is uncertain.

Our credit facilities haveCredit Agreement has substantial restrictions and financial covenants that restrict our business and financing activities.

The operating and financial restrictions and covenants in our credit facilitiesCredit Agreement restrict our ability to finance future operations or capital needs and to engage, expand or pursue our business activities. Our ability to comply with these restrictions and covenants in the future is uncertain and will be affected by our results of operations and financial condition and events or circumstances beyond our control. If we violate any of the restrictions, covenants, ratios or tests in our credit agreements,Credit Agreement, our indebtedness may become immediately due and payable, the interest rates under our credit agreementsCredit Agreement may increase and the lenders’ commitment, if any, to make further loans to us may terminate. In the event that some or all of the amounts outstanding under our credit facilitiesCredit Agreement are accelerated and become immediately due and payable, we may not have the funds to repay, or the ability to refinance, such outstanding amounts under our credit facilities, and our lenders could foreclose upon critical assets.  As a result, we may be unable to complete any further development of our properties and it may affect our ability to continue as a going concernconcern. For a description of our credit facilities, please see Item 5.B. “Operating and Financial Review and Prospects—Liquidity and Capital Resources—Credit Facilities.”

Our level of indebtedness may increase, reducing our financial flexibility.

We intend to fund our capital expenditures through a combination of cash flow from operations, borrowings under our credit facilities and, if necessary, alternative debt or equity financings. Because at the date of this report, we did not have any incremental borrowing capacity under our Credit Agreement, our ability to make the necessary capital investment to maintain or expand our asset base and develop oil and natural gas reserves will be impaired if cash flow from operations is reduced and external sources of capital become limited or unavailable. If we obtain alternative debt or equity financing for these or other purposes, the related risks that we now face could intensify. Our level of debt could adversely affect our business and results of operations in several important ways, including the following:

·                  a portion of our cash flow from operations would be used to pay interest on borrowings;

·                  the covenants contained in our credit facilities limit our ability to borrow additional funds, pay dividends, dispose of assets or issue shares of preferred stock and otherwise may affect our flexibility in planning for, and reacting to, changes in general business and economic conditions;

·                  a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes;

·                  a leveraged financial position would make us more vulnerable to economic downturns and decreases in commodity prices and could limit our ability to withstand competitive pressures; and

·                  a debt that we incur under our Revolving Facility will be at variable rates, which could make us vulnerable to an increase in interest rates.

Increased costs of capital could adversely affect our business.

Our business and operating results can be adversely affected by factors such as the availability, terms and cost of capital and increases in interest rates. Changes in any one or more of these factors could cause our cost of doing business to increase, limit our access to capital, limit our ability to pursue acquisition opportunities, reduce our cash flows available for drilling and place us at a competitive disadvantage. Disruptions in the global financial markets may lead to an increase in interest rates or a contraction in credit availability, which would impact our ability to finance our operations. We will require continued access to capital for the foreseeable future. A significant reduction in the availability of credit could materially and adversely affect our business, results of operations and financial condition.

Competition in the oil and natural gas industry is intense and many of our competitors have resources that are greater than ours.

The oil and natural gas industry is highly competitive. Public integrated and independent oil and natural gas companies, private equity backed and private operators are all active bidders for desirable oil and natural gas properties as well as the equipment and personnel required to operate those properties. Many of these companies have substantially greater financial resources, staff and facilities than we do. There is a risk that increased industry competition will adversely impact our ability to purchase assets or secure services at prices that will allow us to generate sufficient returns on investment in the future.

We may not be able to keep pace with technological developments in our industry.

The oil and natural gas industry is characterized by rapid and significant technological advancements and introductions of new products and services using new technologies. As others use or develop new technologies, we may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial costs. In addition, other oil and natural gas companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before we can. We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies we use now or in the future were to become obsolete, our business, financial condition or results of operations could be materially and adversely affected.

The loss of any of our key personnel could adversely affect our business, financial condition, the results of operations and future growth.

We are reliant on a number of key members of our executive management team. Loss of such personnel may have an adverse effect on our performance. We currently have an employment agreement with our chief executive officer and managing director, however we have not entered into or finalized agreements with any of the other members of our executive management team. Certain areas in which we operate are highly competitive regions and competition for qualified personnel is intense. We may be unable to hire suitable field personnel for our technical team or there may be periods of time where a particular position remains vacant while a suitable replacement is identified and appointed. Our ability to sustain current operations or manage our growth will require us to continue to train, motivate and manage our employees and to attract, motivate and retain additional qualified personnel. We may not be successful in attracting and retaining the personnel required to grow or operate our business profitably.

Our ability to manage growth will have an impact on our business, financial condition and results of operations.

Our growth historically has been achieved through the acquisition of leaseholds and the expansion of our drilling programs. Future growth may place strains on our financial, technical, operational and administrative resources and cause us to rely more on project partners and independent contractors, potentially adversely affecting our financial position and results of operations. Our ability to grow will depend on a number of factors, including:

·                  our ability to obtain leases or options on properties;

·                  our ability to identify and acquire new exploratory prospects;

·                  our ability to develop existing prospects;

·                  our ability to continue to retain and attract skilled personnel;

·                  our ability to maintain or enter into new relationships with project partners and independent contractors;

·                  the results of our drilling programs;

·                  commodity prices; and

·                  our access to capital.

We may not be successful in upgrading our technical, operational and administrative resources or increasing our internal resources sufficiently to provide certain of the services currently provided by third parties, and we may not be able to maintain or enter into new relationships with project partners and independent contractors on financially attractive terms, if at all. Our inability to achieve or manage growth may materially and adversely affect our business, results of operations and financial condition.

We may incur losses as a result of title deficiencies.

We may lose title to, or interests in, our leases and other properties if the conditions to which those interests are subject are not satisfied or if insufficient funds are available to meet the commitments.

The existence of title differencesdeficiencies with respect to our oil and natural gas properties could reduce their value or render such properties worthless, which would have a material adverse effect on our business and financial results. We do not obtain title insurance and have not necessarily obtained drilling title opinions on all of our oil and natural gas properties. As is customary in the industry in which we operate, we generally rely upon the judgment of oil and natural gas lease brokers or independent landmen who perform the field work in examining records in the appropriate governmental offices and abstract facilities before attempting to acquire or place under lease a specific mineral interest and before drilling a well on a leased tract, and we generally make title investigations and receive title opinions of local counsel before we commence drilling operations. In some cases, we perform curative work to correct deficiencies in the marketability or adequacy of the title assigned to us. In cases involving more serious title problems, the amount paid for affected oil and natural gas leases can be lost, and the target area can become undrillable. While we undertake to cure all title deficiencies prior to drilling, the failure of title may not be discovered until after a well is drilled, in which case we may lose the lease, our investment in the well and the right to produce all or a portion of the minerals under the property. A significant portion of our acreage is undeveloped leasehold, which has a greater risk of title defects than developed acreage.

Our operations are subject to health, safety and environmental laws and regulations that may expose us to significant costs and liabilities.

The conduct of exploration for, and production of, hydrocarbons may expose our staff to potentially dangerous working environments. Occupational health and safety legislation and regulations differ in each jurisdiction. In March 2016, the Occupational Safety and Health Administration (“OSHA”) issued a final rule related to worker exposure to respirable dust from silica sand, a common additive to hydraulic fracturing fluids. Compliance with the rule may require significant investment in engineering and workplace controls.  If any of our employees suffer injury or death, compensation payments or fines may have to be paid, and such circumstances could result in the loss of a license or permit required to carry on the business, or other legislative sanction, all of which have the potential to materially and adversely affect our business, results of operations and financial condition.

There is an inherent risk of incurring significant environmental costs and liabilities in the performance of our operations, some of which may be material, due to our handling of petroleum hydrocarbons and wastes, our emissions to air and water, the underground injection or other disposal of our wastes and historical industry operations and waste disposal practices. Under certain environmental laws and regulations, we may be liable, regardless of whether we were at fault, for the full cost of removing or remediating contamination, even when multiple parties contributed to the release and the contaminants were released in compliance with all applicable laws. In addition, accidental spills or releases on our properties may expose us to significant liabilities that could have a material adverse effect on our financial condition and results of operations. Aside from government agencies, the owners of properties where our wells are located, the operators of facilities where our petroleum hydrocarbons or wastes are taken for reclamation or disposal and other private parties may be able to sue us to enforce compliance with environmental laws and regulations, as well as collect penalties for violations or obtain damages for any related personal injury or property damage. Some sites we operate are located near current or former third-party oil and natural gas operations or facilities, and there is a risk that contamination has migrated from those sites to ours. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly material handling, emission, waste management or cleanup requirements could require us to make significant expenditures to attain and maintain compliance or may otherwise materially and adversely affect our business, results of operations and financial condition. We may not be able to recover some or any of these costs from insurance.  Federal and state regulators are increasingly targeting greenhouse gas emissions from oil and gas operations.  While these regulatory efforts are evolving, they may require the installation of emission controls or mandate other action that may result in increased costs of operation, delay, uncertainty or exposure to liability.

In addition, our operations and financial performance may be adversely affected by governmental action, including delay, inaction, policy change or the introduction of new, or amendment of or changes in interpretation of existing legislation or regulations, particularly in relation to foreign ownership, access to infrastructure, environmental regulation (including in respect of carbon emissions and management), royalties and production and exploration licensing.

Hydraulic fracturing, which is the process used for releasing hydrocarbons from shale rock, has recently come under increased scrutiny and could be the subject of further regulation that could impact the timing and cost of development.

Hydraulic fracturing is an important and commonly used process in the completion of unconventional oil and natural gas wells. Hydraulic fracturing involves the injection of water, sand and chemicals under pressure into deep rock formations to stimulate oil or natural gas production. Currently, hydraulic fracturing is primarily regulated in the United States at the state level, which generally focuses on regulation of well design, pressure testing and other operating practices. However, some states and local jurisdictions across the United States, including states in which we operate, have begun adopting more restrictive regulations, including measures such as:

·                  required disclosure of chemicals used during the hydraulic fracturing process;

·                  restrictions on wastewater disposal activities;

·                  required baseline and post-drilling sampling of water supplies in close proximity to hydraulic fracturing operations;

·                  new municipal or state land use regulations, such as changes in setback requirements, which may restrict drilling locations or related activities;

·                  financial assurance requirements, such as the posting of bonds, to secure site restoration obligations; and

·                  local moratoria or even bans on oil and natural gas development utilizing hydraulic fracturing in some communities.

On March 20, 2015, the Bureau of Land Management (“BLM”) issued its final regulations for hydraulic fracturing on federal and tribal lands. The new regulations require, among other things, disclosure of chemicals, annulus pressure monitoring, flow back and produced water management and storage, and more stringent well integrity measures associated with hydraulic fracturing operations on public land. On June 21, 2016, however, the U.S. District Court for the District of Wyoming enjoined BLM from enforcing the regulations, concluding that the agency lacked the authority to issue them. BLM appealed that decision to the U.S. Court of Appeals for the Tenth Circuit. The appeal is pending.

At the U.S. federal level, hydraulic fracturing that does not involve the use of diesel fuels is exempt from regulation under the Safe Drinking Water Act (“SDWA”). However, the United States Congress (“Congress”) has considered and likely willmay continue to consider eliminating this regulatory exemption, which could subject hydraulic fracturing activities to regulation and permitting by the Environmental Protection Agency (“EPA”) under the SDWA. Congressional action will be informed by a study commenced in 2011 byOn June 28, 2016, the EPA on the impacts of hydraulic fracturing on drinking water resources, withissued final results anticipated in 2016.  The EPA has also announced that it will develop pre-treatment standards forprohibiting the disposal of wastewater producedpollutants from shaleon shore unconventional oil and gas operations throughextraction facilities to publicly owned treatment works.  The regulations will be developed under the EPA’s Effluent Guidelines Program under the authority of the Clean Water Act. On April 7, 2015, the EPA published a proposed rule requiring federal pre-treatment standards for wastewater generated during the hydraulic fracturing process in the Federal Register. If adopted, the new pre-treatment rules will require shale gas operations to pre-treat wastewater before transferring it to publicly-owned treatment facilities. The public comment period for the proposed rule ended on July 17, 2015. If the EPA implements further regulationsregulation of hydraulic fracturing we may incurresult in our incurring additional costs to comply with such requirements that may be significant in nature, experiencenature.  Such regulation may result in our experiencing delays or curtailment in the pursuit of exploration, development, or production activities, and we could even be prohibited from drilling and/or completing certain wells.

Despite the existing regulatory exemption, the EPA has begun utilizing other legal authorities in various ways to regulate portions of the hydraulic fracturing process, exemplified by its issuance of regulations under the Clean Air Act limiting emission of pollutants during the hydraulic fracturing process, as well as its recent initiation of a proposed rulemaking under the Toxic Substances Control Act to obtain data on chemical substances and mixtures used in hydraulic fracturing. In addition, the United States Department of the Interior has proposed comprehensive regulations governing the use of hydraulic fracturing on federally managed lands.

These efforts by Congress, federal regulators, states and local governments could result in additional costs, delay and operational uncertainty that could limit, preclude or add costs to use of hydraulic fracturing in our drilling operations.

Conservation measures and technological advances could reduce demand for crude oil, natural gas and NGLs.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to crude oil, natural gas and NGLs, technological advances in fuel economy and energy generation devices could reduce demand for crude oil, natural gas and NGLs. The impact of the changing demand for crude oil, natural gas and NGL services and products may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our ability to produce oil and natural gas economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our drilling operations or are unable to dispose of or recycle the water we use economically and in an environmentally safe manner.

Drilling activities require the use of water. For example, the hydraulic fracturing process that we employ to produce commercial quantities of oil and natural gas from many reservoirs, including the Eagle Ford, requires the use and disposal of significant quantities of water. In certain areas, there may be insufficient local aquifer capacity to provide a source of water for drilling activities. Water must be obtained from other sources and transported to the drilling site. The effects of climate change may further exacerbate water scarcity in certain regions.

Our inability to secure sufficient amounts of water, or to dispose of or recycle the water used in our operations, could adversely impact our operations in certain areas. Moreover, the imposition of new environmental initiatives and regulations could include restrictions on our ability to conduct certain operations such as hydraulic fracturing or disposal of waste, including, but not limited to, produced water, drilling fluids and other materials associated with the exploration, development or production of oil and natural gas. In particular, regulatory focus on disposal of produced water and drilling waste through underground injection has increased because of alleged links between such injection and regional seismic impacts in disposal areas.

Compliance with environmental regulations and permit requirements governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic fracturing of wells may increase our operating costs and cause delays, interruptions or termination of our operations, the extent of which cannot be predicted, all of which could materially and adversely affect our business, results of operations and financial condition.

Climate change laws and regulations restricting emissions of “greenhouse gases” could result in increased operating costs and reduced demand for the oil and natural gas that we produce while the physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects.

On December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other “greenhouse gases” present an endangerment to human health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the Earth’s atmosphere and other climatic changes. These findings by the EPA have allowed the agency to proceed with the adoption and implementation of regulations restricting emissions of greenhouse gases under existing provisions of the federal Clean Air Act. Among other things, EPA regulations now require specified large greenhouse gas emitters in the United States, including companies in the energy industry, to annually report those emissions. New major sources or significant modifications of existing sources of traditional air pollutants are required to obtain permits and to use best available control technology to control those emissions pursuant to the Clean Air Act as a prerequisite to the development of that emissions source. In addition, sources subject to best available control technology for traditional air pollutants are now also required to use best available control technology to control significant greenhouse gas emissions. While these regulations have not to date materially affected us, such regulations may over time require us to incur costs to reduce emissions of greenhouse gases associated with our operations or could adversely affect demand for the oil and natural gas we produce.

In addition, as discussed in more detail below, the EPA finalized its New Source Performance Standard (“NSPS”) rule regulating carbon dioxide from new, modified and reconstructed fossil fuel-fired power plants and the Clean Power Plan for existing fossil fuel-fired power plants.  While these rules will more negatively impact coal-fired power plants, natural gas-fired power plants may also face liability under the rules and increased costs of operation. The Trump Administration is currently reviewing the Obama era climate regulations, and the President has stated an interest in easing the regulations.

In August 2015,May 2016, the EPA released proposedissued final regulations intended to reduce methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025.   These actions include a commitment from theOn October 20, 2016, EPA to issue new source performance standardsissued final Control Techniques Guidelines for methanereducing smog-forming VOC emissions from the oil and gas sector. Pursuant to this commitment, in September 2015, the EPA proposed emission standards for methane and VOC for sources in theexisting oil and natural gas sector constructed or modified after September 1, 2015. The proposed rules expand the 2012 NSPS for VOC emissions from the oilequipment and gas sector to include methane emissions. For sources not affected by the 2012 NSPS, the proposed rule imposes both VOCprocesses in certain states and methane standards. In particular, the proposal would require methane reductions from centrifugal and reciprocating compressors, pneumatic pumps, fugitive emissions from well sites and compressor stations and equipment leaks at natural gas processing plants. The proposal does not extend to existing sources and EPA has not indicated when it will propose existing source standards.areas with smog problems. The methane regulations once finalized, could affect us indirectly by affecting our customer base or by directly regulating our operations. In either case, these new developments could result in increased costs of operation and exposure to liability.

In addition, Congress has considered legislation to restrict or regulate emissions of greenhouse gases, such as carbon dioxide and methane that are understood to contribute to global warming. While comprehensive climate legislation will likely not be passed by either house of Congress in the near future, energy legislation and other initiatives continue to be proposed that may be relevant to greenhouse gas emissions issues. In addition, almost half of the states, either individually or through multi-state regional initiatives, have begun to address greenhouse gas emissions, primarily through the planned development of emission inventories or regional greenhouse gas cap and trade programs. Although most of the state-level initiatives have to date been focused on large sources of greenhouse gas emissions such as electric power plants, smaller sources could become subject to greenhouse gas-related regulation. Depending on the particular program, we could be required to control emissions or to purchase and surrender allowances for greenhouse gas emissions resulting from our operations. Any future federal laws or implementing regulations that may be adopted to address greenhouse gas emissions could require us to incur increased operating costs and could adversely affect demand for the oil and natural gas we produce.

Finally, increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods, droughts and other climatic events. If any such effects were to occur, they could have an adverse effect on our exploration and production operations. Significant physical effects of climate change could also have an indirect effect on our financing and operations by disrupting the transportation or process-related services provided by midstream companies, service companies or suppliers with whom we have a business relationship. We may not be able to recover through insurance some or any of the damages, losses, or costs that may result from potential physical effects of climate change.

Certain federal income tax deductions currently available with respectTerrorist attacks aimed at energy operations could adversely affect our business.

The continued threat of terrorism and the impact of military and other government action have led and may lead to further increased volatility in prices for oil and natural gas exploration and developmentcould affect these commodity markets or the financial markets used by us. In addition, the U.S. government has issued warnings that energy assets may be eliminated as a resultfuture target of future legislation.

We are also subject to changing and extensive tax laws, the effects of which cannot be predicted. Certain legislation introduced in Congress, if enacted into law, would make significant changes to U.S. tax laws, including, but not limited to, the elimination of certain key federal income tax incentives currently available toterrorist organizations. These developments have subjected oil and natural gas explorationoperations to increased risks. Any future terrorist attack on our facilities, customer facilities, the infrastructure depended upon for transportation of products, and, production companies. These or anyin some cases, those of other similar changes in federal tax lawsenergy companies, could defer or eliminate certain tax deductions that are currently available with respect to oil and natural gas exploration and development, and any such change could materially and adversely affecthave a material adverse effect on our business, results of operations and financial condition.business.

General economic conditions could adversely affect our business and future growth.

Instability in the global financial markets may have a material impact on our liquidity and financial condition, and we may ultimately face major challenges if conditions in the financial markets were to materially change or worsen. Our ability to access the capital markets or to borrow money may be restricted or may be more expensive at a time when we would need to raise capital, which could have an adverse effect on our flexibility to react to changing economic and business conditions and on our ability to fund our operations and capital expenditures in the future. Such economic conditions could have an impact on our customers, causing them to fail to meet their obligations to us. In addition, it could have an impact on the liquidity of our operating partners, resulting in delays in operations or their failure to make required payments.

Also, market conditions could have an impact on our oil and natural gas derivative instruments if our counterparties are unable to perform their obligations or seek bankruptcy protection, which could lead to reductions in the demand for oil and natural gas, or reductions in the prices of oil and natural gas or both, which could have an adverse impact on our financial position, results of operations and cash flows. While the ultimate outcome and impact of changing economic conditions cannot be predicted, they may materially and adversely affect our business, results of operations and financial condition.

Changes in the differential between benchmark prices of oil and natural gas and the reference or regional index price used to price our actual oil and natural gas sales could have a material adverse effect on our results of operations and financial condition.

The reference or regional index prices that we will use to price our oil and natural gas sales sometimes will reflect a discount to the relevant benchmark prices. The difference between the benchmark price and the price we reference in our sales contracts is called a differential. We cannot accurately predict oil and natural gas differentials. Changes in differentials between the benchmark price for oil and natural gas and the reference or regional index price we reference in our sales contracts could materially and adversely affect our business, results of operations and financial condition.

Recent federal legislation could have an adverse impact on our ability to use derivative instruments to reduce the effects of commodity prices, interest rates and other risks associated with our business.

Historically, we have entered into a number of commodity derivative contracts in order to hedge a portion of our oil and natural gas production. On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which requires the SEC and the Commodity Futures Trading Commission (“CFTC”) to promulgate rules and regulations implementing the legislation. In its rulemaking under the Dodd-Frank Act, the CFTC has proposed new legislation. The CFTC issued regulations settingto set position limits for certain futures, options and optionswap contracts in the major energy marketsdesignated physical commodities, including, among others, oil and for swaps that are their economic equivalents.natural gas. Certain bona fide hedging transactions arepositions would be exempt from these limits. Thethe position limits regulation was vacated byas currently proposed. It is not possible at this time to predict when the United States District Court forCFTC will finalize these regulations or whether the Districtproposed rules will be modified prior to becoming effective, so the impact of Columbia in September 2012. The CFTC has appealed the District Court’s decision and its Chairman has stated that the agencythose provisions on us is working on developing a new proposed rulemaking to address position limits. The CFTC has finalized other regulations, including critical rulemakings on the “swap” and “swap dealer” definitions, swap dealer registration, swap data reporting and mandatory clearing, among others.uncertain at this time. The Dodd-Frank Act and CFTC rules have also designated certain types of swaps (thus far, only certain interest rate swaps and credit default swaps) for mandatory clearing and exchange trading, and may designate other types of swaps for mandatory clearing and exchange trading in the future. To the extent that we engage in such transactions or transactions that become subject to such rules in the future, we will require us in connection with certain derivatives activitiesbe required to comply with the clearing and trade-executionexchange trading requirements (oror to take steps to qualify for an exemption to such requirements).requirements. In addition, new regulations may require us to comply withcertain banking regulators and the CFTC have adopted final rules establishing minimum margin requirements althoughfor uncleared swaps. Although we expect to qualify for the end-user exception from margin requirements for swaps to other market participants, such as swap dealers, these regulations arerules may change the cost and availability of the swaps we use for hedging. If any of our swaps do not finalizedqualify for the commercial end-user exception, we could be required to post initial or variation margin, which would impact liquidity and their applicationreduce our cash. This would in turn reduce our ability to us is uncertain at this time. The legislation may also require the counterpartiesexecute hedges to our derivative contracts to spin off some of their derivatives activities to a separate entity, which may not be as creditworthy as the current counterparty.

The new legislationreduce risk and any new regulations could:protect cash flows.

·Other regulations to be promulgated under the Dodd-Frank Act also remain to be finalized. As a result, it is not possible at this time to predict with certainty the full effects of the Dodd-Frank Act and CFTC rules on us and the timing of such effects. The Dodd-Frank Act and regulations could significantly increase the cost of some derivative contracts, (including through requirements to post collateral that could adversely affect our available liquidity);

· materially alter the terms of some derivative contracts;

·contracts, reduce the availability of some derivatives to protect against risks we encounter;

·encounter, reduce our ability to monetize or restructure our existing derivative contracts;contracts, and

·                  potentially increase our exposure to less creditworthy counterparties.

If we reduce our use of derivatives as a result of the new legislationDodd-Frank Act and regulations, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures. Increased volatility may make us less attractiveFurther, to certain typesthe extent our revenues are unhedged, they could be adversely affected if a consequence of investors. Finally, the Dodd-Frank Act was intended, in part,and implementing regulations is to reduce the volatility of oil and natural gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and natural gas. If the new legislation and regulations result in lower commodity prices, our revenues could be adversely affected.prices. Any of these consequences could adversely affecthave a material adverse effect on our financial condition andposition, results of operations.operations and cash flows. In addition, non-U.S. jurisdictions are implementing regulations with respect to the derivatives market. To the extent we transact with counterparties in foreign jurisdictions, we may become subject to such regulations. At this time, the impact of such regulations is not clear.

We may be subject to risks in connection with acquisitions, and the integration of significant acquisitions may be difficult.

In accordance with our business strategies, we periodically evaluate acquisitions of reserves, properties, prospects and leaseholds and other strategic transactions that appear to fit within our overall business strategy. The successful acquisition of producing properties requires an assessment of several factors, including:

·                  recoverable reserves;

·                  future oil and natural gas prices and their appropriate differentials;

·                  development and operating costs; and

·                  potential environmental and other liabilities.

The accuracy of these assessments is inherently uncertain. In connection with these assessments, we perform a review of the subject properties that we believe to be generally consistent with industry practices. Our review will not reveal all existing or potential problems nor will it permit us to become sufficiently familiar with the properties to fully assess their deficiencies and potential recoverable reserves. Inspections may not always be performed on every well, and environmental problems are not necessarily observable even when an inspection is undertaken. Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems. We often are not entitled to contractual indemnification for environmental liabilities and acquire properties on an “as is” basis.

Significant acquisitions and other strategic transactions may involve other risks, including:

·                  diversion of our management’s attention to evaluating, negotiating and integrating significant acquisitions and strategic transactions;

·                  the challenge and cost of integrating acquired operations, information management and other technology systems and business cultures with those of our operations while carrying on our ongoing business;

·                  difficulty associated with coordinating geographically separate organizations; and

·                  the challenge of attracting and retaining personnel associated with acquired operations.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of our business. Our senior management may be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage our business. If our senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business could suffer.

In addition, even if we successfully integrate an acquisition, it may not be possible to realize the full benefits we may expect, including with respect to estimated proved reserves, production volume or cost savings from operating synergies, within our expected time frame. Anticipated benefits of an acquisition may also be offset by operating losses relating to changes in commodity prices in oil and natural gas industry conditions, risks and uncertainties relating to the exploratory prospects of the combined assets or operations, or an increase in operating or other costs or other difficulties. Failure to realize the benefits we anticipate from an acquisition may materially and adversely affect our business, results of operations and financial condition.

Our business could be negatively impacted by security threats, including cyber-security threats, and other disruptions.

As anThe oil and natural gas producer, we face various security threats,industry has become increasingly dependent on digital technologies to conduct day-to-day operations including cyber-security threatscertain exploration, development and production activities. For example, software programs are used to gaininterpret seismic data, manage drilling rigs, production equipment and gathering and transportation systems, as well as conduct reservoir modeling and reserve estimation for compliance reporting.

We are dependent on digital technologies including information systems and related infrastructure, to process and record financial and operating data, communicate with our employees, business partners, and shareholders, analyze seismic and drilling information, estimate quantities of oil and natural gas reserves as well as other activities related to our business. Our business partners, including vendors, service providers, purchasers of our production and financial institutions are also dependent on digital technology. The technologies needed to conduct oil and natural gas exploration, development and production activities make certain information the target of theft or misappropriation.

As dependence on digital technologies has increased, cyber incidents, including deliberate attacks or unintentional events, have also increased. A cyber-attack could include gaining unauthorized access to digital systems for the purposes of misappropriating assets or sensitive information, acquire cashcorrupting data, causing operational disruption, or result in denial-of-service on websites.

Our technologies, systems, networks, and those of our business partners may become the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other assets through theft or fraud or render data or systems unusable, threats to the securitydisruption of our facilitiesbusiness operations. In addition, certain cyber incidents, such as surveillance, may remain undetected for an extended period of time. A cyber incident involving our information systems and related infrastructure, or third party facilitiesthat of our business partners, could disrupt our business plans and infrastructure, suchnegatively impact our operations.

Certain federal income tax deductions currently available with respect to oil and natural gas exploration and development may be eliminated as processing plantsa result of future legislation.

In past years, legislation has been proposed from time to time that contains proposals to eliminate certain key U.S. federal income tax preferences currently available to oil and pipelines,natural gas exploration and threats from terrorist acts. Cyber-security attacks in particular are evolving andproduction companies. These proposals include, but are not limited to malicious software, attempts to gain unauthorized access to data,(i) the repeal of the percentage depletion allowance for oil and other electronic security breachesnatural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, (iii) the elimination of the deduction for certain U.S. production activities and (iv) an extension of the amortization period for certain geological and geophysical expenditures. The Trump Administration has called for a comprehensive tax reform that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information, corruption of data or misappropriation of assets. There can be no assurance that the procedures and controls we use to monitor and mitigate these risks will be sufficient in preventing security threats from materializing. Ifwould significantly change U.S. tax laws. It is unclear whether any of the foregoing proposals will actually be considered and enacted as part of tax reform legislation or how soon any such changes in law could become effective. The passage of any legislation as a result of these events wereproposals or any other similar change in U.S. federal income tax law could eliminate and/or defer certain tax deductions that are currently available with respect to materialize, theyoil and natural gas exploration and production. Any such change could lead to losses of sensitive information, assets, critical infrastructure, personnel or capabilities, essential tomaterially adversely affect our operationsbusiness, financial condition and could have a material adverse effect on our reputation, financial position, results of operations or cash flows.by increasing the after-tax costs we incur which would in turn make it uneconomic to drill some locations if commodity prices are not sufficiently high, resulting in lower revenues and decreases in production and reserves.

Risks Related to our Shares and ADSs

The market price and trading volume of our ordinary shares and ADSs may be volatile and may be affected by economic conditions beyond our control.

Our ordinary shares are listed on the ASX under the symbol “SEA.“SEA” and our ordinary shares in the form of ADSs are listed on NASDAQ under the symbol “SNDE.” The market price of our ordinary shares on the ASX and ADSs on NASDAQ may be highly volatile and subject to wide fluctuations. In addition, the trading volume of our ordinary shares and ADSs may fluctuate and cause significant price variations to occur. If the market price of our ordinary shares or ADSs declines significantly, you may be unable to resell your ordinary shares or ADSs at or above the purchase price, if at all. We cannot assure you that the market price of our ordinary shares or ADSs will not fluctuate or significantly decline in the future.

Some specific factors that could negatively affect the price of our ordinary shares and ADSs or result in fluctuations in their price and trading volume include:

·                  actual or expected fluctuations in our operating results or liquidity;

·                  actual or expected changes in our growth rates or our competitors’ growth rates;

·                  changes in commodity prices for hydrocarbonsoil, natural gas and NGLs we produce;

·                  changes in market valuations of similar companies;

·                  changes in our key personnel;

·                  potential acquisitions and divestitures;

·changes in financial estimates or recommendations by securities analysts;

·                  changes or proposed changes in laws and regulations affecting the oil and natural gas industry;

·                  sales of ordinary shares by us, our directors, executive officers or our shareholders in the future;

·                  announcements by us or competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments;

·                  actions taken by our lenders;

·conditions in the oil and natural gas industry in general; and

·                  conditions in the financial markets or changes in general economic conditions.conditions; and

·                  the other factors described in this “Risk Factors” section.

There is no establishedThe dual listing of our ordinary shares and ADSs may adversely affect the liquidity and value of our ordinary shares and ADSs.

Our ADSs are traded on NASDAQ, and the underlying ordinary shares are traded on the ASX. The dual listing of our ordinary shares and ADSs may dilute the liquidity of these securities in one or both markets and may adversely affect the maintenance of an active trading market for ADSs in the United States. The price of our ADSs could also be adversely affected by trading in our ordinary shares on the ASX. Although our ordinary shares are currently listed on the ASX, we may decide at some point in the future to delist our ordinary shares from the ASX, and our shareholders may approve such delisting. We cannot predict the effect such delisting of our ordinary shares on the ASX would have on the market price of our ADSs on NASDAQ.

The sale or availability for sale of substantial amounts of our ordinary shares or ADSs could adversely affect their market price.

Sales of our ordinary shares or ADSs in the public market, foror the perception that these sales could occur, could cause the market price of our securitiesordinary shares or ADSs to decline. As of April 10, 2017, we had 1,249,351,617 ordinary shares outstanding, with 7,917,988 of our ordinary shares being held in the United States by 65 holders of record and we cannot assure you that1,204,317,759 of our ordinary shares will be listed on any securities exchangebeing held in Australia by 4,211 holders of record. Among these shares, 52,969,100 ordinary shares are in the form of ADSs, which are freely transferable without restriction or that an active trading market will ever developadditional registration under the Securities Act. The remaining ordinary shares and ADSs outstanding are, subject to the applicable requirements of Rule 144 under the Securities Act, available for any ofsale. Sales, or perceived potential sales, by our existing shareholders and ADSs might make it more difficult for us to issue new equity or equity-related securities in the United States.future at such a time and place as we deem appropriate.

There is currently no established public market in the United States for our ordinary shares. While our ordinary sharesADSs are listed for quotation on the OTC Pink marketplace operated by the OTC Markets Group,NASDAQ, trading is limited, sporadic and volatile.  There is no assurance that an active trading market in our ordinary sharesADSs will develop in the United States, or if such a market develops, that it will be sustained. As a result, an investor may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, our ordinary sharesADSs in the United States.

ADSs represent only a relatively small percentage of our ordinary shares,  which may limit the liquidity of the ADSs and have a negative impact on the price of the ADSs.

ADSs represent only a relatively small number of our ordinary shares actively traded in public markets. Limited liquidity may increase the volatility of the prices of our ADSs and the underlying ordinary shares.

Future sales and issuances of our ADSs or rights to purchase ADSs and any equity financing that we pursue, could result in significant dilution of the percentage ownership of our shareholders and could cause our ADS price to fall.

To the extent we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution. In any financing transaction, we may sell ordinary shares or ADSs, convertible securities or other equity securities. If we sell ordinary shares or ADSs, convertible securities or other equity securities, our shareholders and ADS holders investment in our ordinary shares or ADSs will be diluted. These sales may also result in material dilution to our existing shareholders and ADS holders, and new investors could gain rights superior to our existing shareholders and ADS holders.

ADS holders are not shareholders and do not have shareholder rights.

The Bank of New York Mellon, as depositary, executes and delivers ADSs on our behalf. Each ADS is a certificate evidencing a specific number of ADSs. ADS holders will not be treated as shareholders and do not have the rights of shareholders. The depositary will be the holder of the shares underlying the ADSs. Holders of our ADSs will have ADS holder rights. A deposit agreement among us, the depositary and the ADS holders, and the beneficial owners of ADSs, sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs and Australian law and our Constitution govern shareholder rights.

ADS holders do not have the same rights to receive dividends or other distributions as our shareholders. Subject to any special rights or restrictions attached to a share, the directors may determine that a dividend will be payable on a share and fix the amount, the time for payment and the method for payment (although we have never declared or paid any cash dividends on our ordinary shares and we do not anticipate paying any cash dividends in the foreseeable future). Dividends and other distributions payable to our shareholders with respect to our ordinary shares generally will be payable directly to them. Any dividends or distributions payable with respect to ordinary shares underlying ADSs will be paid to the depositary, which has agreed to pay to the ADS holders the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after deducting its fees and expenses. The ADS holders will receive these distributions in proportion to the number of shares their ADSs represent. In addition, there may be certain circumstances in which the depositary may not pay to the ADS holders amounts distributed by us as a dividend or distribution.

You must act through the ADR depositary to exercise your voting rights and, as a result, you may be unable to exercise your voting rights on a timely basis.

Holders of our ADSs (and not the ordinary shares underlying ADSs) will not be treated as one of our shareholders and will not have shareholder rights. The ADR depositary will be the holder of the ordinary shares underlying ADSs, and ADS holders will only be able to exercise voting rights with respect to the ordinary shares represented by ADSs in accordance with the deposit agreement relating to our ADSs. There are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our ordinary shares will receive notice of shareholders’ meetings by mail and will be able to exercise their voting rights by either attending the shareholders meeting in person or voting by proxy. ADS holders, by comparison, will not receive notice directly from us. Instead, in accordance with the deposit agreement, we will provide notice to the ADR depositary of any such shareholders meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date. If we so instruct, the ADR depositary will mail to holders of ADSs the notice of the meeting and a statement as to the manner in which voting instructions may be given by holders as soon as practicable after receiving notice from us of any such meeting. To exercise their voting rights, ADS holders must then instruct the ADR depositary as to voting the ordinary shares represented by their ADSs. Due to these procedural steps involving the ADR depositary, the process for exercising voting rights may take longer for ADS holders than for holders of ordinary shares. The ordinary shares represented by ADSs for which the ADR depositary fails to receive timely voting instructions will not be voted.

You may be subject to limitations on transfer of our ADSs.

Our ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

Your rights to pursue claims against the depositary as a holder of ADSs are limited by the terms of the deposit agreement.

Under the deposit agreement, any action or proceeding against or involving the depositary, arising out of or based upon the deposit agreement or the transactions contemplated thereby may only be instituted in a state or federal court in New York, New York, and pursuant to the deposit agreement, holders of our ADSs have irrevocably waived any objection which they may have to the laying of venue of any such proceeding, and irrevocably submitted to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Notwithstanding the foregoing, however, the depositary may, in its sole discretion, require that any such action, controversy, claim, dispute, legal suit or proceeding be referred to and finally settled by an arbitration conducted under the terms described in the deposit agreement subject to certain exceptions solely related to the aspects of such claims that are related to U.S. securities law, in which case the resolution of such aspects may, at the option of such registered holder of the ADSs, remain in state or federal court in New York, New York. The deposit agreement may also be amended without the consent of the ADS holders without their consent. Holders of our ADSs will be bound to any such amendment to the deposit agreement.

Fluctuations in the exchange rate between the U.S. dollar and the Australian dollar may increase the risk of holding our ADSs.

Our ordinary shares currently trade on the ASX in Australian dollars, while our ADSs trade on NASDAQ in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the Australian dollar may result in differences between the value of our ADSs and the value of our ordinary shares, which may result in heavy trading by investors seeking to exploit such differences. In addition, as a result of fluctuations in the exchange rate between the U.S. dollar and the Australian dollar, the U.S. dollar equivalent of the proceeds that a holder of ADSs would receive upon the sale in Australia of any ordinary shares withdrawn from the depositary upon calculation of the corresponding ADSs and the U.S. dollar equivalent of any cash dividends paid in Australian dollars on our ordinary shares represented by ADSs could also decline.

As a foreign private issuer whose ADSs are listed on NASDAQ, we are permitted to file less information with the SEC than a company that is notmay follow certain home country corporate governance practices instead of certain NASDAQ requirements.

NASDAQ listing rules allow for a foreign private issuer, orsuch as Sundance, to follow its home country practices in lieu of certain of the NASDAQ’s corporate governance standards. This allows us to follow certain corporate governance practices that files asdiffer in certain respects from the corporate governance requirements applicable to U.S. companies listed on NASDAQ. For example, we are exempt from regulations of NASDAQ that require listed companies organized in the United States to:

·                  have a domestic issuer.majority of the board of directors consist of independent directors;

·                  require non-management directors to meet on a regular basis without management present;

·                  require an issuer to provide for a quorum in its by-laws for any meeting of shareholders that is not less than 33 1/3% of the outstanding shares of the company’s common voting stock; and

·                  seek shareholder approval for the implementation of certain equity compensation plans and issuances of ordinary shares.

As a foreign private issuer, we are exempt from certain rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that impose disclosure requirements as well as procedural requirements for proxy solicitations under Section 14permitted to, and do follow home country practices in lieu of the Exchange Act. In addition,above requirements. Accordingly, our officers, directorsholders of ADSs and principalordinary shares may not have the same protections afforded to shareholders of companies that are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act. Moreover, we are not requiredsubject to file periodic reports and financial statements with the SEC as frequently or as promptly as a company that files as a domestic issuer whose securities are registered under the Exchange Act, nor are we generally required to comply with the SEC’s Regulation FD, which restricts the selective disclosure of material non-public information.these NASDAQ requirements.

If we fail to establish and maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.

Beginning for the year ended December 31, 2015, theThe Company becameis subject to Section 404(a) of the Sarbanes-Oxley Act, which requires that our management assess and report annually on the effectiveness of our internal controls over financial reporting and identify any material weaknesses in our internal controls over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal controls over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with SEC rules that implement Section 404(b) of the Sarbanes-Oxley Act until such time as we are no longer an emerging growth company.

Our management has concluded that our internal controls over financial reporting were effective as of December 31, 2015.2016.  However, if we fail to maintain effective internal controls over financial reporting in the future, the presence of material weaknesses could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our financial reporting, which could require us to restate our operating results or our auditors may be required to issue a qualified audit report. We might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404(a) of the Sarbanes-Oxley Act. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we will need to expend significant resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal control.

In addition, if we are unable to conclude that we have effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of our shares could decline and we may be subject to litigation or regulatory enforcement actions.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As a “foreign private issuer” we are not required to comply with all the periodic disclosure and current reporting requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and related rules and regulations. Under SEC rules, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2017.

Since our operations are located in the U.S., we would lose our foreign private issuer status in the future if a majority of our ordinary shares (including those represented by ADSs) are owned by U.S. shareholders and a majority of our shareholders, directors or management are U.S. citizens or residents.  The regulatory and compliance costs to us under applicable U.S. securities laws as a U.S. domestic issuer may be significantly higher than our current regulatory and compliance costs. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, the annual report on Form 10-K requires domestic issuers to disclose executive compensation information on an individual basis with specific disclosure regarding the domestic compensation philosophy, objectives, annual total compensation (base salary, bonus, equity compensation) and potential payments in connection with change in control, retirement, death or disability, while the annual report on Form 20-F permits foreign private issuers to disclose compensation information on an aggregate basis. We will also have to report our results under U.S. Generally Accepted Accounting Principles, rather than under IFRS, as a domestic registrant. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. We may also be required to modify certain of our policies to comply with corporate governance practices required for U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements of the NASDAQ Stock Market that are available to foreign private issuers.

We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our ordinary shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports. We expect to continue to take advantage of some or all of the available exemptions. We cannot predict whether investors will find our ADSs less attractive if we rely on these exemptions. If some investors find our ADSs less attractive as a result, there may be a less active trading market for our ADSs and the market price of the ADSs may be more volatile.

We incur increased costs as a result of operating as a company with ADSs that are publicly traded in the United States, and our management is now required to devote substantial time to new compliance initiatives.

As a company with ADSs that are publicly traded in the United States, and particularly after we are no longer an “emerging growth company,” we have incurred and will continue to incur significant legal, accounting and other expenses that we did not previously incur prior to our listing on NASDAQ. In addition, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NASDAQ Stock Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.

However, for as long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We may remain an emerging growth company until:

·                  the end of the first fiscal year in which the market value of our ordinary shares that are held by non-affiliates is at least $700 million as of the end of the second quarter of such fiscal year;

·                  the end of the first fiscal year in which we have total annual gross revenues of at least $1.07 billion;

·                  the date on which we have issued more than $1 billion in non-convertible debt securities in any rolling three year period; or

·                  December 31, 2020.

We could be classified as a “passive foreign investment company,” which could result in adverse U.S. federal income tax consequences to U.S. holders of our shares.ordinary shares or ADSs.

Based on our business results for the last fiscal year and composition of our assets, we do not believe that we were a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for the taxable year ended December 31, 2015.2016. Similarly, based on our business projections and the anticipated composition of our assets for the current and future years, we do not expect that we will be a PFIC for the taxable year ending December 31, 2016.2017. However, a separate determination is required after the close of each taxable year as to whether we are a PFIC. If our actual business results do not match our projections, it is possible that we may become a PFIC in the current or any future taxable year. A non-U.S. corporation will be considered a PFIC for a taxable year if either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets during the fiscal year) is attributable to assets that produce or are held for the production of passive income. Because the determination of our PFIC status is based on an annual determination that cannot be made until the close of a taxable year, and involves extensive factual investigation, including ascertaining the fair market value of all of our assets on a quarterly basis and the character of each item of income we earn, our U.S. counsel expresses no opinion with respect to our PFIC status. If we are a PFIC for any taxable year during which a U.S. holder (as defined in Item 10.E. “Additional Information—Taxation—U.S. Federal Income Tax Considerations”) holds an ADS or an ordinary share, certain adverse U.S. federal income tax consequences could apply to such U.S. holder. See Item 10.E. “Additional Information—Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company.”

We have never declared or paid dividends on our ordinary shares and we do not anticipate paying dividends in the foreseeable future.

We have never declared or paid cash dividends on our ordinary shares. For the foreseeable future, we currently intend to retain all available funds and any future earnings to support our operations and to finance the growth and development of our business. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to compliance with applicable laws and covenants under current or future credit facilities, which may restrict or limit our ability to pay dividends, and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant. We do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future. As a result, a return on your investment will only occur if the price of our ordinary share priceshares or ADSs appreciates.

U.S. investors may have difficulty enforcing civil liabilities against us and our non-U.S. resident directors.

We are a public limited company incorporated under the laws of Australia. Certain of our directors are non-residents of the United States and substantially all of their assets are located outside the United States.  As a result, it may not be possible to serve process on such persons or us in the United States or to enforce judgments obtained in U.S. courts against them or us based on civil liability provisions of the securities laws of the United States.

Australian takeover laws may discourage takeover offers being made for us or may discourage the acquisition of a significant position in our ordinary shares.

We are incorporated in Australia and are subject to the takeover laws of Australia. Among other things, we are subject to the Corporations Act 2001 (“Corporations Act”). Subject to a range of exceptions, the Corporations Act prohibits the acquisition of a direct or indirect interest in our issued voting shares if the acquisition of that interest will lead to a person’s voting power in us increasing to more than 20%, or increasing from a starting point that is above 20%, though below 90%. Australian takeover laws may discourage takeover offers being made for us or may discourage the acquisition of a significant position in our ordinary shares. This may have the ancillary effect of entrenching our Board of Directors and may deprive or limit our shareholders’ opportunity to sell their ordinary shares and may further restrict the ability of our shareholders to obtain a premium from such transactions.

Our Constitution and Australian laws and regulations applicable to us may adversely affect our ability to take actions that could be beneficial to our shareholders.

As an Australian company, we are subject to different corporate requirements than a corporation organized under the laws of the United States. Our Constitution, as well as the Australian Corporations Act, set forth various rights and obligations that are unique to us as an Australian company. These requirements may operate differently than those of many U.S. companies.

We have broad discretion in the use of our cash and cash equivalents and may not use them effectively.

Our management has broad discretion in the use of our cash and cash equivalents and could spend our funds in ways that do not improve our results of operations or enhance the value of our ADSs and ordinary shares. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the market price of our ADSs and ordinary shares to decline and delay the development of our properties.

Item 4.  Information on Sundance

A.                                    History and Development

Sundance Energy Australia Limited, a public onshore oil and natural gas company, was incorporated under the laws of Australia in December 2004. In April 2005, we completed an initial public offering of our ordinary shares and listing of these shares on the ASX.ASX under the symbol “SEA.”  In September 2016, we implemented a sponsored ADR program with The Bank of New York Mellon. Our ADSs are listed on NASDAQ under the symbol “SNDE.”  Eash ADR represents 100 of our ordinary shares.

Our principal office is located at 633 17th Street, Suite 1950, Denver, Colorado 80202. Our telephone number is (303) 543-5700. Our website address is www.sundanceenergy.net. Information on our website and the websites linked to it do not constitute part of this annual report. Our agent for service of process in the United States is Sundance Energy, Inc., which has its principal place of business at 633 17th Street, Suite 1950, Denver, Colorado 80202.

We are an onshore oil and natural gas company focused on the exploration, development and production of large, repeatable resource plays, primarily in south Texas targeting the Eagle Ford basinformation (“Eagle Ford”) and north central Oklahoma targeting the Mississippian and Woodford formations (“Mississippian/Woodford”).

Acquisitions

In December 2016, we acquired approximately 130 net acres in McMullen County, Texas, which included 23 gross (1.5 net) producing wells (primarily Sundance-operated), for consideration of $7.2 million.

In July 2016, we acquired approximately 5,050 net acres in McMullen County, Texas, which included 26 gross (9.1 net) producing wells (primarily Sundance-operated), for consideration of $15.9 million.

In August 2015, the Companywe acquired approximately 5,500 net acres in Atascosa County, Texas, which included 7 gross producing wells and 2 wells that had bebeen drilled but not yet completed (one of such wells was subsequently completed by the Company) for consideration of $16.4 million. The acquisition also included a 17.5 percent working interest in the PEL 570 concession in the Cooper Basin in Australia.  The Company plansWe plan to selldispose of the PEL570 assets.assets as these assets are not core to our business.

In January 2015, we acquired three leases totaling approximately 14,180 net acres in the Eagle Ford for approximately $13.4 million.

In July 2014, we acquired the working interests in approximately 9,200 gross (5,700 net) and 18,000 gross (5,400 net) mineral acres in Dimmit and Maverick Counties, Texas, respectively. Therespectively for a purchase price included an initial cash payment of approximately $36 million and a commitment to drill four Eagle Ford wells. In addition, we have the option, at our sole discretion, to acquire the seller’s remaining working interests in Dimmit and Maverick Counties, Texas (including the seller’s interest in producing wells) for an additional $45 million (comprised of the seller’s choice of all cash or cash and ordinary shares, with certain restrictions).million.

In April 2014, we acquired approximately 4,800 net acres in the Eagle Ford for an initial purchase price of approximately $10.5 million and two separate earn out payments due upon commencement of drilling ($7.7 million) and payout of the first six wells drilled on the acreage ($7.7 million). The term of the agreement is two years and provides a one-year extension for $500 per acre extended. This acreage is adjacent to our current acreage in McMullen County, Texas.

In March 2013, we completed our merger with Texon Petroleum Ltd. (“Texon”) through which we acquired our initial assets in the Eagle Ford, consisting of approximately 7,735 gross (7,336 net) acres at the time of acquisition. Shortly after the acquisition, we changed the name of Texon to Armadillo Petroleum Limited, and we similarly renamed Texon’s subsidiaries. The purchase price for the Texon acquisition was approximately $158.4 million, which involved the issuance of approximately 122,669,678 of our ordinary shares to Texon’s shareholders.million.

Divestitures

On March 1, 2017, we executed a Purchase and Sale Agreement (PSA) to divest of our Mississippian/Woodford assets for the sale price of $18.5 million.  The PSA is subject to customary closing conditions and the transaction is expected to close in May 2017.

In December 2016, we divested an acreage block containing 3,336 gross (2,709 net) acres located in Atascosa County, Texas, which was undeveloped and outside our core development project area, for consideration of $7.1 million.

In July 2014, we divested our remaining assets located in the Denver-Julesburg basin. The sale price of approximately $108.8 million in cash included the reimbursement of capital expenditures incurred on 8 gross (3.1 net) non-operated horizontal wells.

In July 2014, we divested our remaining assets located in the northwest North Dakota targeting the Bakken and Three-Forks formations (“Bakken”). The sale price of $14approximately $14.5 million included $10$10.0 million in cash and relief from a net liability owed to the buyer of $4approximately $4.5 million.

In November 2013, we sold our entire interest in an individual operated well and 622 net developed acres, located in the Phoenix prospect of the Bakken, for gross proceeds of approximately $4.3 million. In December 2013, we sold our interests in properties also located in the Phoenix prospect for $35.5 million. The assets sold included 77 gross (3.7 net) non-operated producing wells in McKenzie, Dunn and Mountrail Counties, North Dakota.

B.                                    Business Overview

We are an onshore oil and natural gas company focused on the exploration, development and production of large, repeatable resource plays in North America. Our oil and natural gas properties are located in premier U.S. oil and natural gas basins, and through the year ended December 31, 20152016 our operational activities were conducted in the Eagle Ford and Mississippian/Woodford.

We intend to utilize our U.S.-based management and technical team to appraise, develop, produce and grow our portfolio of assets. Our strategy is to develop assets where we are the operator and have high working interests, which positions us to control the pace of our development and the allocation of our capital resources. As of December 31, 2015,2016, we operated approximately 85%74% of our developed acreage with an average working interest of approximately 82%92% for Eagle Ford and 89% for Mississippian/Woodford with respect to such operated developed acreage.

Our Operations

Estimated Proved Reserves

The following table presents summary information regarding our estimated net proved oil and natural gas reserves as of the dates indicated. The estimates of our net proved reserves as of December 31, 20152016 and 20142015 are based on the reserve reports prepared by Ryder Scott, and Netherland Sewell, respectively, in accordance with the rules and regulations of the SEC regarding oil and natural gas reserve reporting. For more information about our proved reserves as of December 31, 20152016 and 2014,2015, please see the reports to management prepared by Ryder Scott, and Netherland Sewell, which have been filed or incorporated by reference, as exhibits to this annual report.