History

Founded in 1979, Parallel Petroleum was historically an exploration company focusing on 3-D seismic, trying to make an oil or gas discovery that would increase its stockholders’ value immediately. In the second quarter of 2002, Parallel sold its First Permian, L.P. assets, realizing a $31 million net gain, and changed its business plan to focus more on lower risk acquisition and development of producing properties and less on higher risk exploration. The Company changed its business plan because of the risk associated with being solely an exploration company and its related boom and bust cycle.

Since 2002, the Company has acquired several long-life oil assets in the Permian Basin of West Texas, including the Fullerton, Carm-Ann and Harris San Andres projects, all of which are waterflood projects in various stages of development. Another key Permian Basin acquisition was the Diamond M Field, which is Parallel’s largest oil reserve target.

Additionally, since 2002, Parallel has added two resource gas projects to the portfolio. The Company’s Barnett Shale gas project is located in Tarrant County, in and around the Trinity River flood plain, east and west of downtown Fort Worth, Texas. The Wolfcamp gas project is located in Southeastern New Mexico, in Eddy and Chaves Counties. .