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With recent property dispositions and existing bank lines, the Company was able to complete all of its recently restructured drilling commitments. This winters drilling program has demonstrated significant initial production results for slick water frac stimulations that were vastly superior to previously announced techniques. The Company continues to add to its Cardium drilling inventory.

Subject to the outcome of the strategic alternatives process, Anderson will continue to focus on converting its asset base to be more than 50% oil and NGL production.

STRATEGIC ALTERNATIVES

The Company is continuing its process to identify, examine and consider a range of strategic alternatives available to the Company with a view to enhancing shareholder value. The strategic alternatives may include, but are not limited to, a sale of all or a material portion of the assets of Anderson, or a drilling joint venture, either in one transaction, or in a series of transactions, the outright sale of the Company, or a merger or other strategic transaction involving Anderson and a third party. The Board of Directors believes that the Company's shares trade at a discount to the value of the underlying assets, especially given its high quality light oil production base, prospective horizontal light oil drilling inventory and significant tax pools. The Board of Directors has established a special committee comprised of independent directors of the Company to oversee the process and has retained BMO Capital Markets and RBC Capital Markets as its financial advisors to assist the Special Committee and the Board of Directors with the process.

Since January 1, 2012, Anderson has sold interests in 17 oil and natural gas properties for total consideration of $73.9 million, has restructured its shallow gas and Cardium horizontal drilling commitments, and has reduced its bank debt and working capital deficiency by 51% to $64.5 million. Total production sold was 2,292 BOED (71% natural gas), including 54 BOED of dry gas swapped in exchange for additional interests in Cardium drillable lands at Garrington, and is considered by the Company to be non-strategic. Anderson has sold almost its entire position west of the fourth meridian, exited the outside operated coal bed methane business and remains focused exclusively on its W5M assets.

It is Anderson's current intention to not disclose developments with respect to its strategic alternatives process unless and until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is necessary in accordance with applicable law. The Company cautions that there are no assurances or guarantees that the process will result in a transaction or, if a transaction is undertaken, the terms or timing of such a transaction or the impact it will have on the Company's financial position. The Company has not set a definitive schedule to complete the evaluation.

On April 1, 2012, the Company implemented a retention plan for its employees as part of this process, which was updated in October 2012 in conjunction with the lay-off of some of its staff.

QUARTERLY INFORMATION

The following table provides financial and operating results for the last eight quarters. Commodity prices remain volatile, affecting funds from operations and earnings throughout those quarters. In 2010, the Company changed its focus to oil projects in light of the continued depressed natural gas market, and suspended its shallow gas drilling program. Accordingly, revenues, funds from operations and earnings (loss) over the four quarters of 2011 reflect the benefits from increased sales of crude oil volumes resulting from the oil-focused drilling programs beginning in 2010. However, the Company curtailed its drilling program in 2012, drilling only 3 gross wells (2.45 net capital and revenue) in the first quarter of 2012 and 4 gross wells (4 net capital, 2.8 net revenue) in the last quarter of the year, versus the 51 gross (43.8 net capital, 38.7 net revenue) successful wells drilled in 2011. The natural declines and the impact of the sale of properties during 2012 contributed to production volume declines during each quarter of 2012. The reduction in production volumes and the declines in commodity prices relative to 2011 led to decreases in revenue during each quarter of 2012.