NATURAL RESOURCES

Beaver Coal Company owns approximately 41,000 acres of coal property. All of the property is located in the low-volatile metallurgical coal fields of Raleigh County, West Virginia. Although most of the mining rights are leased to large, nationally recognized coal producers, some opportunity remains to obtain lease rights on various portions of the property.

Throughout the years Beaver Coal Company has worked closely with the Department of Environmental Protection's Abandoned Mine Lands Program. This cooperative effort resulted in the reclamation of numerous coal refuse areas left from pre-1969 mining operations. Some of the reclaimed areas included mine refuse with as much as a 30 percent coal content. The opportunity to recover the coal from these "coal rich" mine refuse sites remains open to interested parties.

Timber

In 1993, Beaver Coal Company, Limited began a sustained yield timber harvest program to assist the company in maintaining a healthy forest cover and to maximize yield of forest products. This program ensures that the volume of timber harvested from the property each year remains less than or equal to the volume that is grown on the property.

Each year three to four million board feet of timber is harvested from the property. Approximately one-half of the harvest is performed by timber companies that bid for specific harvest units. The remaining half of the annual harvest is performed by an operator working under a longer-term timber purchase contract from Beaver Coal Company.

Oil & Gas

Since the late 1920s, natural gas has been produced from Beaver Coal Company's property. The first natural gas lease was made with Godfrey Cabot in 1929. Since then at least eight other natural gas producers have operated on Beaver Coal Company's property, including United Fuel Gas Co., Appalachian Exploration & Development, Peake Oil & Gas, North Coast Energy, Columbia Natural Resources, American Gas Utilities, Co., EOG Resources, Milton Oil & Gas, and CDX, Inc. There are presently six natural gas production companies that have gas rights leased from Beaver Coal Company.

Until 2001, gas production from the property was limited to production from gas wells drilled vertically into conventional sandstone and limestone natural gas reservoirs. In 2001, EOG Resources produced pipeline quality methane gas from a horizontally drilled well in the Pocahontas No. 3 Coal Seam on Beaver Coal Company's property. More recently, CDX, Inc. began a horizontal coal bed methane well drilling program on Beaver Coal Company's property. This program has the potential to double the gas production from the property during the years 2008 through 2014.