Initial natural gas exploration work conducted by SG Interests ("SG") and Gunnison Energy Corporation ("GEC") indicate that as much as 10 trillion cubic feet of gas (an amount which would provide Colorado with gas for 20 years at current consumption rates) may exist in the North Fork Valley area of Western Colorado. Further exploration and development work is underway to confirm the amount of gas present in this area. Assuming this work is successful, new natural gas pipeline takeaway capacity will be required to move this gas to market. The Bull Mountain Pipeline Project (the "Pipeline") would provide this takeaway capacity.

The Pipeline will be a 25+/- mile, 20 inch natural gas pipeline beginning in northwest Gunnison County and terminate at Divide Creek, south of the towns of Rifle and Silt. It will be the only major pipeline in the area and is being sized to accommodate the maximum expected production from SG, GEC and other producers in the area. Surface disturbance and all environmental impacts are minimized by the one time construction of a single, large pipeline.

On November 14, 2007, the Bureau of Land Management ("BLM") and the Forest Service ("FS") issued the final Environmental Impact Statement ("FEIS") for the Pipeline. This FEIS analyzed several alternative Pipeline routes. The BLM and FS selected the preferred route because it disturbs the fewest acres, installs the fewest miles of pipeline, and involves the fewest miles of road construction. It minimizes the negative effects to soils, wetlands, road corridors, and it meets the visual quality and air quality objectives for the area.

The economic benefits of the Pipeline and associated natural gas production are significant. These benefits will include increased federal royalties of which 50% are returned to Colorado, severance and ad valorem taxes, property taxes, employment and the like.