The reason for going public in 2013 was simple – the opportunity set for Jones had become too large to fund as a private company. Jonny Jones, our Founder and Chairman, started Jones Energy in 1988 with an investment of $3 million. Jones had been a private company for over 25 years before going public in July 2013 at $15 per share, raising approximately $175 million. Just four months after going public, Jones announced one of the bigger acquisitions in its history, purchasing Sabine’s Anadarko assets for approximately $195 million. We continue to see our opportunity for growth as vast and look forward to continuing our long tradition of operational excellence as a public company.

To properly calculate our market capitalization, one must include both the Class A and Class B shares outstanding. Some sites understate our market capitalization by only including the Class A shares.

Our founder, Jonny Jones, chose the Mid-Continent region back in 1988 because it was a great place to be in the oil and gas business, which still holds true today. The Mid-Continent region has long been a hospitable home to oil and gas companies with an impressive, nearly century-long history of drilling activity across multiple formations. This means that the region has significant midstream infrastructure and extensive well control - two factors that are extremely important to an upstream energy company.

This has been our home since the company’s inception and we have extensive experience that covers nearly 10 different formations. Additionally, the Mid-Continent continues to be an area of vast opportunity for Jones Energy. Just the Cleveland play alone covers over 2 million acres. The stacked pay potential of the Mid-Continent also provides significant development opportunities as Jones Energy is just beginning to tap the potential of other formations in the area.

We are constantly evaluating growth opportunities and do not limit ourselves to the Mid-Continent region. That said, we see tremendous opportunity in the Mid-Continent. A key to our ability to maintain our growth and create value stems from scale in our core plays. We seek opportunities where we can have a meaningful presence and this would apply to any potential new plays outside of our current focus areas. Most importantly, no matter where we grow, we will make sure that our growth is purposeful and deliberate – grounded in our strategy to only operate where we can be best in class.

We actively hedge our oil, gas and natural gas liquids production to minimize commodity price risk. We believe that if the economics are good enough to drill the well, then it is wise to lock in those economics and protect cash flow for future drilling, investment, and debt repayment. We primarily utilize swaps to hedge our production. In the near-term (12-24 months), we generally seek to maintain hedges for 100% of production from proved developing producing reserves and a reasonable amount of hedges for expected production from proved undeveloped reserves. Beyond 24 months, we generally seek to maintain hedges for 100% of our proved developed producing reserves, assuming adequate liquidity is available in the market. We think this strategy provides the Company with maximum operational optionality, and positions us to take advantage of opportunities regardless of the direction commodity prices move.