Our vision and strategy has remained constant since inception. Our focus has always been development of our natural gas resource plays through the drill bit. Since 1996 when we first went public, Compton has advanced from a high risk pure exploration company to a strong intermediate exploration and production corporation with outstanding assets. Today, Compton has 271 million boe of long life reserves, valued in excess of $3.4 billion dollars (8% DCF).

 

Significant value remains to be added from a low risk, large scale drilling program across Compton’s undeveloped lands.  Our strategy of developing Compton through the drill bit with a low risk, repeatable drilling program promises significant potential upside for our shareholders.

 

Unlocking the value inherent in our resource base is our first priority. Components of our operating strategy include:

Concentrate on Core Areas

Compton has gained technical expertise and achieved success in exploring for unconventional natural gas.

We are focused on three core areas that provide a balanced portfolio of exploration, development, and exploitation prospects. These areas are the geographic focus of the Company’s seismic database rights, and are areas in which Management and staff have significant technical expertise and operational experience. Compton intends to generate exploration opportunities and to increase the Company’s undeveloped land base within the WCSB.

Focus on Unconventional Natural Gas in Large Resource Plays

As of December 31, 2007, 84% of proved reserves were natural gas.  We have gained considerable technical expertise and achieved significant success in exploring for unconventional natural gas accumulations in the WCSB. We plan to continue to focus on finding and developing these types of natural gas opportunities because of their generally lower decline curves and higher economic return over the life of the reserves compared to conventional natural gas opportunities. The large scale nature of our resource plays also offers multiple low-risk drilling locations resulting in lower costs and decreased exploration risk.

Pursue Growth Through the Drill Bit

We plan to continue to reinvest in the growth of our company.  Expansion of our existing land base, infrastructure requirements, and our exploration and development programs comprise the foundation of Compton’s growth strategy.  Since Compton first went public in 1996, we have grown our proved plus probable reserve base from 12 million boe to more than 271 million boe.  Over the past five years, we have grown our reserves at a 21% compound annual growth rate.

Control Infrastructure and Operatorship

We believe that control over gathering and processing infrastructure and operatorship is critical to the success of our full-cycle exploration program. We currently own or have access to requisite infrastructure in each of our three core areas. Being an operator ensures discretion in determining the timing and methodology of ongoing exploration, development, and exploitation programs. We expect to continue to expand our working interest in core areas to maximize these operating efficiencies.

Maintain Financial Flexibility

Compton is committed to maintaining financial flexibility sufficient to pursue a full-cycle exploration program in periods of low commodity prices and to respond to opportunities for strategic acquisitions as they arise. We have historically funded our exploration, development, and exploitation capital program through internally generated cash flow. Acquisitions have been financed through bank debt, the issuance of common shares, or a combination thereof.  The Company’s accelerated drilling program has recently been, and will continue to be, funded through cash flow, the issuance of additional equity and debt, and non-core property sales. Other components of Compton’s financial discipline include establishing appropriate leverage ratios and maintaining an active commodity hedging program.