UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-9971

BURLINGTON RESOURCES INC.

717 Texas, Suite 2100, Houston, Texas 77002

Telephone: (713) 624-9500

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $.01 per share

Preferred Stock Purchase Rights

The above securities are registered on the New York Stock Exchange.

Securities registered pursuant to Section 12(g) of the Act:

None

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. Yes   X   No      

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes   X   No      

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of January 30, 2005 and as of the last business day of the registrant’s most recently completed second fiscal quarter. Common Stock aggregate market value held by non-affiliates as of January 31, 2005: $16,915,639,395 and as of June 30, 2004: $14,035,722,348.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. Class: Common Stock, par value $.01 per share, on January 31, 2005, Shares Outstanding: 386,997,012

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated:

Burlington Resources Inc. definitive proxy statement, to be filed not later than 120 days after the end of the fiscal year covered by this report, is incorporated by reference into Part III.

Below are definitions of key certain technical industry terms used in this Form 10-K.

Appraisal well is a well drilled in the vicinity of a discovery or wildcat well in order to evaluate the extent and importance of the discovery.

Basin is a synclinal structure in the subsurface that is composed of sedimentary rock and regarded as a good prospect for exploration.

Call options are contracts giving the holder (purchaser) the right, but not the obligation, to buy (call) a specified item at a fixed price (exercise or strike price) during a specified period. The purchaser pays a nonrefundable fee (the premium) to the seller (writer).

Cash-flow hedges are derivative instruments used to mitigate the risk of variability in cash flows from crude oil and natural gas sales due to changes in market prices. Examples of such derivative instruments include fixed-price swaps, fixed-price swaps combined with basis swaps, purchased put options, costless collars (purchased put options and written call options) and producer three-ways (purchased put spreads and written call options). These derivative instruments either fix the price a party receives for its production or, in the case of option contracts, set a minimum price or a price within a fixed range.

Compression is the process of squeezing a given volume of gas into a smaller space.

Completion refers to the work performed and the installation of permanent equipment for the production of natural gas and crude oil from a recently drilled well.

Developed acreage is acreage that is allocated or assignable to producing wells or wells capable of production.

Development well is a well drilled within the proved area of an oil or natural gas field to the depth of a stratigraphic horizon known to be productive.

Dry hole is an exploratory or development well that does not produce oil or gas in commercial quantities.

Exploitation is drilling wells in areas proven to be productive.

Exploratory well is a well drilled to find and produce oil or gas in an unproved area, to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir, or to extend a known reservoir. Generally, an exploratory well is any well that is not a development well, a service well or a stratigraphic test well.

Fair-value hedges are derivative instruments used to hedge or offset the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment. For example, a contract is entered into whereby a commitment is made to deliver to a customer a specified quantity of crude oil or natural gas at a fixed price over a specified period of time. In order to hedge against changes in the fair value of these commitments, a party enters into swap agreements with financial counterparties that allow the party to receive market prices for the committed specified quantities included in the physical contract.

Field is an area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature or stratigraphic condition.

Formation is a stratum of rock that is recognizable from adjacent strata consisting mainly of a certain type of rock or combination of rock types with thickness that may range from less than two feet to hundreds of feet.

Gross acres or gross wells are the total acres or wells in which a working interest is owned.

Horizon is a zone of a particular formation or that part of a formation of sufficient porosity and permeability to form a petroleum reservoir.

Independent oil and gas company is a company that is primarily engaged in the exploration and production sector of the oil and gas business.

Infill drilling refers to drilling wells between established producing wells on a lease; a drilling program to reduce the spacing between wells in order to increase production and/or recovery of in-place hydrocarbons from the lease.

Lease operating or well operating expenses are expenses incurred to operate the wells and equipment on a producing lease.

Net acreage and net oil and gas wells are obtained by multiplying gross acreage and gross oil and gas wells by the Company’s working interest percentage in the properties.

Oil and NGLs are converted into cubic feet of gas equivalent based on 6 MCF of gas to one barrel of oil or NGLs.

Operating costs include direct and indirect expenses, including divisional office expenses, incurred to manage, operate and maintain the Company’s wells and related equipment and facilities.

Permeability is a measure of ease with which fluids can move through a reservoir.

Porosity is the ratio of the volume of empty space to the volume of solid rock in a formation, indicating how much fluid a rock can hold.

Production costs are costs incurred to operate and maintain the Company’s wells and related equipment and facilities. These costs include well operating costs, severance taxes and ad valorem taxes.

Productive well is a well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.

Proved developed reserves are the portion of proved reserves which can be expected to be recovered through existing wells with existing equipment and operating methods. For complete definitions of proved developed natural gas, NGLs and crude oil reserves, refer to the Securities and Exchange Commission’s Regulation S-X, Rule 4-10(a)(2), (3) and (4).

Proved reserves represent estimated quantities of natural gas, NGLs and crude oil which geological and engineering data demonstrate, with reasonable certainty, can be recovered in future years from known reservoirs under existing economic and operating conditions. Reservoirs are considered proved if shown to be economically producible by either actual production or conclusive formation tests. For complete definitions of proved natural gas, NGLs and crude oil reserves, refer to the Securities and Exchange Commission’s Regulation S-X, Rule 4-10(a)(2), (3) and (4).

Proved undeveloped reserves are the portion of proved reserves which can be expected to be recovered from new wells on undrilled proved acreage, or from existing wells where a relatively major expenditure is required for completion. For complete definitions of proved undeveloped natural gas, NGLs and crude oil reserves, refer to the Securities and Exchange Commission’s Regulation S-X, Rule 4-10(a)(2), (3) and (4).

Put options are contracts giving the holder (purchaser) the right, but not the obligation, to sell (put) a specified item at a fixed price (exercise or strike price) during a specified period. The purchaser pays a nonrefundable fee (the premium) to the seller (writer).

Reservoir is a porous and permeable underground formation containing a natural accumulation of producible oil and/or gas that is confined by impermeable rock and water barriers and/or is individual and separate from other reservoirs.

Seismic is an exploration method of sending energy waves or sound waves into the earth and recording the wave reflections to indicate the type, size, shape and depth of subsurface rock formation. (2-D seismic provides two-dimensional information and 3-D seismic provides three-dimensional pictures.)

Sour gas is natural gas containing chemical impurities, notably hydrogen sulfide, other sulfur compounds and/or carbon dioxide.

Spacing is the number of wells which conservation laws allow to be drilled on a given area of land.

Step-out drilling is drilling a well adjacent to a proven well but moving in the direction of an unproven area.

Swaps are contracts between two parties to exchange streams of variable and fixed prices on specified notional amounts. One party to the swap pays a fixed price while the other pays a variable price.

Sweet gas is natural gas free of significant amounts of hydrogen sulfide or carbon dioxide when produced.

Tight gas is natural gas produced from a formation with low permeability that will not give up its gas readily at high flow rates.

Transportation expense primarily includes costs to process, including payments made in-kind, and costs to transport crude oil, NGLs and natural gas to a major facility, market hub, sales point or plant.

Undeveloped acreage is lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas.

Working interest is the operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.

Workover is operations on a producing well to restore or increase production.

Writer refers to the seller of an option. The writer earns the premium on the option but bears the risk of fulfilling the obligations of the option.

Zone is a stratigraphic interval containing one or more reservoirs.

PART I

ITEMS ONE AND TWO

BUSINESS AND PROPERTIES

Burlington Resources Inc. (“BR”) is among the world’s largest independent oil and gas companies and holds one of the industry’s leading positions in North American natural gas reserves and production. BR conducts exploration, production and development operations in the U.S., Canada, United Kingdom, Africa, China and South America. BR is a holding company and its principal subsidiaries include Burlington Resources Oil & Gas Company LP, The Louisiana Land and Exploration Company (“LL&E”), Burlington Resources Canada Ltd. (formerly known as Poco Petroleums Ltd.), Burlington Resources Canada (Hunter) Ltd. (formerly known as Canadian Hunter Exploration Ltd.) (“Hunter”), and their affiliated companies (collectively, “the Company”).

During 2002, after announcing in late 2001 its intent to sell certain non-core, non-strategic properties, the Company sold approximately 1 TCFE of reserves and a processing facility. As a result of these property sales, the Company generated proceeds, before post-closing adjustments, of approximately $1.2 billion. The Company used a portion of the proceeds generated from property sales to retire debt and for general corporate purposes.

In December 2001, the Company consummated the acquisition of Hunter valued at approximately U.S. $2.1 billion, resulting in goodwill of approximately $793 million. The Hunter acquisition added a portfolio of properties, primarily located in the Western Canadian Sedimentary Basin, an area in which the Company already operated. The most significant of the assets is the Deep Basin, one of North America’s largest natural gas fields.

The Company’s reportable segments are U.S., Canada and International. For financial information related to the Company’s reportable segments, see Note 17 of Notes to Consolidated Financial Statements. The Company’s worldwide major operating areas are discussed below.

North America

The Company’s asset base is dominated by North American natural gas properties. Its extensive North American lease holdings extend from the U.S. Gulf Coast to Northeast British Columbia and Northern Alberta in Canada. The Company’s North American operations include a mix of production, development and exploration assets.

U.S.

San Juan Basin

The San Juan Basin, in northwest New Mexico and southwest Colorado, is one of the Company’s major operating areas in terms of reserves and production. The San Juan Basin encompasses nearly 7,500 square miles, or approximately 4.8 million acres, with the major portion located in New Mexico’s Rio Arriba and San Juan counties. The Company is a significant holder of productive leasehold acreage in this area with over 840,000 net acres under its control. The Company operates almost 7,500 well completions in the San Juan Basin and holds interests in an additional 4,700 non-operated well completions.

In 2004, the Company invested $154 million in oil and gas capital, excluding acquisitions, drilled or participated in drilling 361 new wells and performed 172 workovers on existing wells. The Company’s net production from the San Juan Basin averaged approximately 550 MMCF of natural gas per day, 31.3 MBbls of NGLs per day and 1.1 MBbls of crude oil per day during 2004. Production from the San Juan Basin grew significantly during the 1990s, first as a result of Fruitland Coal drilling and then as a result of development of tight gas formations. By the end of the decade, all formations were experiencing some decline; however, the Company has been able to maintain flat production for the last three years. To mitigate Fruitland Coal production decline, the Company has an ongoing program that consists of performing workovers on existing wells, adding compression, and installing artificial lift, where appropriate. The Company drilled or participated in drilling 200 wells on 320-acre and 160-acre spacing during 2004. In 2004, net production from the Fruitland Coal averaged 206 MMCF of natural gas per day from over 1,900 completions.

Also in 2004, the Company completed a $28 million purchase of 1,242 undrilled acres in Negro Canyon, which is located in the heart of the Company’s Fruitland Coal producing area. The purchase encompasses a 100 percent working interest and 87.5 percent net revenue interest in the tract. Production has already been established and the Company expects to fully develop these leases by the end of 2006.

The three conventional formations (Mesaverde, Pictured Cliffs and Dakota) in the San Juan Basin continue to provide attractive development opportunities for the Company. The Mesaverde formation, which consists of the Lewis Shale, Cliffhouse, Menefee and Point Lookout sands, is the largest producing tight gas formation in the San Juan Basin. In 2004, the Company continued its ongoing infill-drilling program in this formation. In 2004, the Company drilled or participated in drilling 161 conventional wells on 160-acre and 80-acre spacing. Net production from the tight gas producing formations averaged 344 MMCF of natural gas per day, 31.3 MBbls of NGLs per day and 1.1 MBbls of crude oil per day in 2004.

Wind River Basin

The Madden Field, located in the Wind River Basin, covers more than 70,000 acres in Wyoming’s Fremont and Natrona counties. Net production averaged 119 MMCF of natural gas per day in 2004 from multiple horizons ranging in depth from 5,000 feet to over 25,000 feet, where the deep Madison formation occurs. Investments in the Wind River Basin during 2004 totaled $24 million for 57 newly drilled wells and workover projects. The Company owns an approximate 48 percent working interest in the Lost Cabin Gas Plant and a 43 percent net revenue interest in the Madison reservoir.

Williston Basin

The Williston Basin operations, located in western North Dakota and eastern Montana, were focused on activities on the Cedar Creek Anticline and in the Bakken Shale formation during 2004. Total Williston Basin production averaged 21.2 MBbls of crude oil per day and 8 MMCF of natural gas per day. During 2004, the Company invested $113 million on projects in the Williston Basin.

The Company continued its highly active waterflood development program at both the Cedar Hills South and East Lookout Butte Units, where the focus has moved to 160-acre infill drilling. A total of 39 production and 8 injection wells were drilled in the two units, along with the continued expansion of the injection and gathering infrastructure. In addition to the development drilling program on the Cedar Creek Anticline, a new development area was initiated in Richland County, Montana, where the Company drilled 8 horizontal wells in the siltstone of the Bakken Shale formation and acquired additional acreage. The Company currently controls over 60,000 acres including areas in Richland County, Montana, and McKenzie County, North Dakota.

Anadarko Basin

The Anadarko Basin, located principally in western Oklahoma, encompasses over 30,000 square miles and contains some of the deepest producing formations in the world. The Company controls over 250,000 net acres and produces from multiple horizons ranging in depth from 11,000 feet to over 21,000 feet. Net production for 2004 from the Anadarko Basin averaged 70 MMCF of natural gas per day and 1.9 MBbls of NGLs per day. During 2004, the Company invested $31 million in the Anadarko Basin. Operated activity focused on the Red Fork formation in Roger Mills County, Oklahoma, where the Company drilled 14 wells.

Permian Basin

Permian Basin operations, in west Texas, are focused on the Waddell Ranch Field. Total Permian Basin production in 2004 averaged 14 MMCF of natural gas per day, 4.0 MBbls of crude oil per day and 2.0 MBbls of NGLs per day, with the Waddell Ranch Field contributing 10 MMCF of natural gas per day, 2.7 MBbls of crude oil per day and 2.0 MBbls of NGLs per day. During 2004, the Company invested $10 million in Permian Basin operations.

Fort Worth Basin

In the Fort Worth Basin of north central Texas, the Company is focused on the continued development of the Barnett Shale formation acreage position in Denton and Wise Counties, Texas. The Company employed up to five rigs during the year to drill or participate in 93 wells in the Barnett Shale formation, including an 11 well horizontal drilling program. The Company invested $83 million in 2004 with production averaging 33 MMCF of natural gas per day, 4.2 MBbls of NGLs per day and 1.0 MBbls of crude oil per day.

Onshore Gulf Coast Area

The Onshore Gulf Coast Area includes operations in a number of drilling trends in east Texas, south Louisiana, the Onshore Gulf of Mexico and the Florida panhandle. In south Louisiana, the Company owns 660,000 acres of fee lands with both surface and mineral rights. In early 2004, the Company acquired $70 million of properties in south Louisiana from ChevronTexaco. The Company spent $29 million of capital on these properties in 2004, and production increased to over 20 MMCF of natural gas per day. In the East Texas Bossier trend, the Company commenced drilling seven wells in 2004, and natural gas sales averaged 7 MMCF per day. Overall, the Company invested $138 million on 128 drilling, workover and facilities projects in the Gulf Coast Area. Net production for 2004 averaged 108 MMCF of natural gas per day, 9.2 MBbls of crude oil per day and 1.5 MBbls of NGLs per day.

Canada

Western Canadian Sedimentary Basin

In the Western Canadian Sedimentary Basin, the Company’s portfolio of opportunities includes conventional exploration and development in Alberta, British Columbia and Saskatchewan.

Canadian activity in 2004 was focused on expanding activity into large-scale repeatable drilling programs in conventional and lower permeability reservoirs. Oil and gas capital investment in Canada was $798 million, excluding acquisitions, and 591 wells were drilled. Production in Canada was 819 MMCF of natural gas per day, 23.6 MBbls of NGLs per day and 5.5 MBbls of crude oil per day during 2004.

The Deep Basin area, in Alberta and British Columbia, consists of the Elmworth, Wapiti, Noel and Brassey Fields. In 2004, a $262 million oil and gas capital program was focused on exploration and development in the Deep Basin area. As a result, 106 wells were drilled and 231 MMCF of natural gas per day and 12.3 MBbls of NGLs per day were produced from this area.

In 2004, the Company completed resource assessment studies that identified future drilling opportunities across 4 horizons in the Deep Basin. The most prolific of these formations include the Cadomin, Falher-A, Falher-B and Cadotte. The Company also conducted down-spacing studies across the Cadomin, Chinook and Belly River horizons. These studies were supplemented by favorable regulatory approval to reduce well spacing from 640-acre to 320-acre over 55 sections of the Deep Basin.

In the Foothills area, which borders on the west side of the Deep Basin, oil and gas capital spending focused on exploration and development was $31 million and production was 53 MMCF of natural gas per day. Five wells were drilled in 2004.

The O’Chiese area in central Alberta yielded production of 161 MMCF of natural gas per day, 6.2 MBbls of NGLs per day and 2.0 MBbls of crude oil per day in 2004. The O’Chiese area was the focus of a $144 million exploration and development program in 2004 that mostly targeted the Lower Cretaceous and Jurassic sands, the principal historical targets. In 2004, 111 wells were drilled.

In the Northern Plains, the Company continued exploration and development activities in the northern Alberta and British Columbia areas. Production in this area during 2004 averaged 83 MMCF of natural gas per day and 2.0 MBbls of NGLs per day. A capital program in this area of $83 million targeted the Bluesky, Gething and Montney formations and 58 wells were drilled during 2004.

In the Kaybob area, production for the year averaged 112 MMCF of natural gas per day, 1.8 MBbls of NGLs per day and 0.8 MBbls of crude oil per day. The Company invested $170 million and 82 wells were drilled during 2004.

The Southern Plains area, which includes the Viking Kinsella property, produced approximately 166 MMCF of natural gas per day, 1.4 MBbls of crude oil per day and 1.2 MBbls of NGLs per day in 2004. In 2004, the Company invested $81 million and 214 wells were drilled in the Southern Plains area.

In 2004, the Company divested its acreage position in the Mackenzie Delta area to focus efforts on Western Canadian Sedimentary Basin opportunities.

International

The Company’s International operations include a combination of exploration opportunities, large field development projects, and production operations. Key focus areas are Northwest Europe, North Africa, China, and South America.

Northwest Europe

The East Irish Sea assets consist of eight licenses covering 163,000 acres. The Company has a 100 percent working interest in seven operated gas fields. First production from two sweet gas fields, Millom and Dalton, commenced in 1999. Net production from the East Irish Sea averaged 87 MMCF of natural gas per day during 2004. The Company invested $53 million of capital in this area during the year.

The development of the sour gas fields in the East Irish Sea continued with first production from Calder in October 2004, representing the first development in the Rivers Fields. Operational issues identified during the startup phase of the Rivers Fields onshore gas processing terminal resulted in the shut down of production from mid-November through the remainder of the year. Production at the Rivers Fields is expected to resume by the second quarter of 2005 and is expected to peak at a sales rate of approximately 100 MMCF of natural gas per day during the year.

The Company’s remaining Northwest European shelf operations consist of non-operated production from the Company’s wholly-owned Netherlands affiliate (“CLAM”) in the Dutch sector of the North Sea. The CLAM assets yielded an annual production rate of 72 MMCF of natural gas per day in 2004.

North Africa

In North Africa, the Company continued with its exploration and development programs in both Algeria and Egypt. The Company benefited from a full year’s production from Algeria Block 405a. Plans for future developments were advanced in both Algeria and Egypt, and the Company completed its exploration program on Algeria Block 402d. The Company’s capital investments in North Africa during 2004 totaled $33 million.

In Algeria, at the Menzel Lejmat North (MLN) Field on Block 405a, where the Company has a 65 percent working interest, activity was primarily focused on stabilizing production from the Company-operated MLN central processing facility. Annual average net oil production was 11.0 MBbls of crude oil per day. One natural gas injection well was successfully drilled and completed during 2004 for reservoir pressure maintenance purposes. In the MLSE area, on the southern portion of the block, development plans for crude oil and natural gas discoveries are being discussed with Sonatrach, the Algerian national oil company.

The Ourhoud Field, in which the Company has a 3.7 percent working interest, produced at an average net rate of 5.5 MBbls of crude oil per day. Five development wells, four injection wells and one water-source well were drilled during 2004, and the waterflood development of this large crude oil field was continued. The Company relinquished its 75 percent working interest in Block 402d in December of 2004.

In Egypt, where the Company has a 50 percent non-operated working interest in the Offshore North Sinai permit, development of the Company’s gas discoveries progressed. An agreement was reached with the Egyptian authorities on a revision to the existing gas sales contract to revise the start date of the project and to bring the pricing structure in line with other Egyptian contracts of this nature. Also, engineering design studies were begun to determine the facilities required to develop the Tao Field and potential satellites. These studies should be completed in 2005.

China

In the Far East, the Company continued its focus on selected basins in China. In 2004, an offshore oil development project achieved the first full year of production and the first phase of a development plan for an onshore gas development received sanctioning and is working toward long-term expansion. The Company invested $42 million in China in 2004.

During the year, the initial development drilling program was completed for the Panyu offshore oil project in the Pearl River Mouth Basin of the South China Sea. The Panyu development involves two offshore oil fields, Bootes and Ursa, located in Block 15/34, in which the Company holds a 24.5 percent working interest. First production was achieved in October 2003, and in 2004 the initial development drilling program was successfully completed. In 2004, the average net production was 19.0 MBbls of crude oil per day.

The Company holds a 100 percent working interest in a natural gas project in the onshore Chuanzhong Block in the Sichuan Basin. In 2004, the Company received government sanctioning of the first phase of development. The project represents an opportunity to apply the Company’s expertise in the development of tight gas reservoirs in an area with substantial reserve potential. During 2004, net production in this area was 5 MMCF of natural gas per day.

South America

The Company’s efforts in South America during 2004 focused on expanding near-term production potential and enhancing long-term exploration opportunities. Net production from South America averaged 6.8 MBbls of crude oil per day and 23 MMCF of natural gas per day. The Company invested $18 million of capital in South America during the year.

In Ecuador, the Company holds a 30 percent working interest in Block 7 and a 37.5 percent working interest in Block 21. Phase II development of the Yuralpa Field in Block 21 is underway following startup in December 2003. Production in this area averaged 4.0 MBbls of crude oil per day during 2004. In Block 7, four wells were successfully drilled during 2004. Net production in Block 7 for the year was 2.6 MBbls of crude oil per day. In Ecuador, the Company’s capital investments in 2004 totaled $12 million.

In Argentina, the Company holds a 25.7 percent working interest in the Sierra Chata concession in the Neuquen Basin. The Company’s net production averaged 23 MMCF of natural gas per day in 2004.

In Peru, the Company entered into an agreement to acquire a 23.9 percent working interest in Block 57, located in the Ucayali Basin. The Company also holds a 23.9 percent working interest in Block 90. In the Marañon Basin, the Company entered into an agreement to farm-in a 45 percent working interest in Block 39 and signed a preliminary agreement to explore and operate Block 104 with a 100 percent working interest. During early 2004, the Company relinquished its interests in Block 87.

In Colombia, the Company holds an exploration contract for a 100 percent working interest in the Orquídea area of the Middle Magdalena Basin. A 3-D seismic acquisition program was completed in November 2004.

Productive Wells

Working interests in productive wells follow.

Net Wells Drilled

The following table sets forth the Company’s net productive and dry wells.

As of December 31, 2004, 331 gross wells, representing approximately 227 net wells, were being drilled or awaiting completion with 71 percent and 29 percent of these wells located in Canada and the U.S., respectively.

Acreage

Working interests in developed and undeveloped acreage follow.

Capital Expenditures

The Company’s capital expenditures follow.