Hanover Letter Agreement

Gerald,

As we discussed earlier, following is a list of the high points agreed upon
in yesterday's meeting with Hanover. Hopefully this is enough to get a draft
of a letter agreement going.

- the compression services agreement will be terminated
- there will be a 90 day transition period starting 1/1/01within which
Crestone will build up an operations and maintenance strategy
- during the 90 day transition, Crestone will make an election as to whether
we want all of the O&M, part of it, or recontract with either Hanover or
another 3rd party (basically we want the flexibility to do anything we
want).
- Hanover will provide to us a rate stucture that will be in effect during
the 90 day transition. We talked about covering their costs (under a flat
monthly fee) plus a 15 to 20% markup. We also agreed to meet with them very
soon to define exactly who does or pays for specific services.
- We will need to address the way new units will be ordered in the future. I
have not worked on this yet.
- Hanover made the committment to maximize on line availability of their units
- There will be a 2 year term during which Hanover will be Crestone's
"preferred provider" of either rented or purchased machines. This needs to
be structrured so that we dont necessarily have to use them.The term will
start 1/1/01.

Thanks for your help. Let me know if I can fill in some of the details for
you.

Ken