Directionally correct but not accurate! Return on Investment1....

Directionally correct but not accurate!

Return on Investment
1. Well Costs through completion and connection
a. 35 wells is $5.2 by the end of CY2008
b. 94 wells is $14.m by end of CY2009
2. Income model
• 35 wells this year instead of 44
• 94 wells by the end of 2009
• First plant is predicted to be at capacity by Oct or Nov. CY2008
• Second plant completed by Feb and fully operational by May CY2009

• Income based on first plant capacity
o Low at 2,500 mmcf x $11 x 365 days = $10m a year
o High at 4,000mmcf x $11 x 365 days = $16m a year
o 75% interest until the second plant comes online
• Income based on first plant and the addition of the second plant capacity
o Second plant at 7,000 to 10,000 mmcf online between Feb and May CY2009
o 100%of the plant goes to Austin giving it additional capacity
 Low at 2,500 + 7,000 = 9,500 x $11 x 365 = $38m a year
 High at 4,000 + 7,000 + 11,000 x $11 x 365 = $44m a year
 56.25% nri to Austin

This does not include the oil.