Historically (2001 to the present) Rockies natural gas has traded at an average discount of

US$1.37 to NYMEX natural gas, but the discount has widened in recent years (US$1.33 in

2006, US$2.92 in 2007 and US$2.20 in 2008 YTD). We forecast long-term NYMEX natural

gas price of US$8.75/Mcf and assume that Rockies gas will trade at a US$1.50–US$3.00

discount to NYMEX natural gas.

Assuming a 15% IRR as the economic cut-off, our model indicates that a minimum IP of

1.85–2.3 MMcf/d would result in an economic well (at US$7.25 and US$5.75 Rockies natural

gas prices, respectively, Figure 23). To achieve a 25% IRR, the model indicates an IP of 2.4–

3.0 MMcf/d would be required (at US$7.25 and US$5.75 Rockies natural gas prices

respectively, Figure 23).

We are therefore looking for the test results from the first five wells to indicate IP rates of at

least 1.85 MMcf/d and preferably in excess of 2.4 MMcf/d. Based on our decline curve, we

estimate those IP rates would result in per well recoveries of 1.9 Bcf and 2.4 Bcf, respectively.

We will evaluate the test results as they are released to the public.