Operations

The Company conducts its main exploration and production operations through its wholly-owned subsidiary, Pegasi Operating Inc. The Company conducts additional operations through another wholly-owned subsidiary: TR Rodessa Inc.

TR Rodessa Inc. operates a 40-mile natural gas pipeline and gathering system which is currently being used by the Company to transport its hydrocarbons to market. Excess capacity on this system is used to transport third-party hydrocarbons.