Crescendo

A quick update from the litigation front.

I met with Scott Josey this afternoon. As I understand it, we have visited
the data room and are preparing to make a bid next Friday for the gathering
system. I told Scott that common-sense dictates that if we file a lawsuit
now Tom Brown will probably tell us to take a hike and we will have no chance
whatsoever of winning the bid process.

That being said, we have decided to put a hold on any litigation until after
the bid process is complete. Hopefully, we win the bid and the problems go
away. If we do not win the bid process, we will plan to initiate
negotiations immediately with the new purchaser and, if necessary, file a
lawsuit to preserve our legal rights.

Ken Krisa is in the process of putting together damage calculations. His
preliminary numbers indicate that, to date, we have been hurt to the tune of
$100,000. While this is not much, Krisa is concerned that damages could
increase dramatically over the length of this contract. I also just learned
from Gerald that Tom Brown has - at least for this month - allowed us to
nominate gas to Northwest Pipeline. Very interesting.

I will continue to keep you apprised of all developments.