Dear Neighbors,                                                                                           10/30/08

There has been a lot of speculation regarding gas leases in our area as it pertains to drilling in the Barnett Shale. The negotiating committee and our attorney would like to clear up a few items and also let you know about our plan of action.

Since being formed, the negotiating committee has had numerous discussions with several energy companies regarding leasing our gas rights. We have hired an attorney to represent us in the negotiating process. His name is Mark Nastri with the firm Munsch Hardt Kopf & Harr, P.C., in Dallas. Mark has been an attorney specializing in oil and gas and mineral rights law for several years. He has represented numerous coalitions in the Tarrant County Barnett Shale play.

Our coalition approved a contract very similar to the one used by the 360 Northwest Coalition in Grapevine and Euless (which our attorney also represented). Unfortunately, the recent chaos in the financial markets and lower gas prices has caused energy companies to dramatically alter their leasing activities for the time being. Except for the original lease offer received over a year ago, we have not received a lease offer and legitimate contract from any energy company. And given the recent events, the negotiating committee has decided to adopt a wait-and-see approach for the time being. We continue to monitor events, and our attorney remains in contact with representatives in the industry.

We are continuing to add more members to our coalition, now numbering several thousand properties in Watauga and North Richland Hills. When there is something to report to you, we will contact you. In the meantime, we ask you to please DO NOT sign anything with any energy company unless you hear from us or have had your own personal attorney review same.

As for signing bonuses, the typical home in Watauga is 1/6 of an acre. Some lots and corner lots are larger. A signing bonus of $5,000 results in a check for $833. A signing bonus of $20,000 results in a check for $3,333. Many of us have lived in our homes for 15 to 20 years and longer. Suffice it to say, few IF ANY of us purchased our home with the intent of making money from the minerals. Consequently, we have not relied on this potential windfall to pay our mortgages or other bills. Waiting a few more months will not change these dynamics.

Of course, as always, you are not required to remain in the coalition or to accept our suggestions and position. Further, if your financial situation requires leaving the group, you may do so at any time. Please let us know, and we will remove you from our list.

Natural gas prices vary on a seasonal basis. If an energy company was making a handsome profit while signing lease bonuses were upward of $20,000 to $30,000 per net mineral acre, then even with seasonal adjustments factored into the equation it stands to reason that they can pay a lot more than $5,000 per acre and still make a handsome profit.

As a united group, we will remain strong. If the energy companies can pick parts of us off, it weakens the group and enhances their bottom line. We are committed to arriving at a fair market price for our minerals. We are not trying to sign the highest lease ever signed, but are looking to sign a contract that provides us fair compensation and that will protect our rights throughout the lengthy production period, regardless of well ownership.

Respectfully,

The Negotiating Committee

                            Pete Beierschmitt                         Marty Leicht

                             Del Gilliam                                  Doug Chapman

                                                      Roger Mullins