We've recently discovered a new method to obtain large quantities of natural gas, but it is not convenient for residential or light commercial customers. The technique requires specialized heavy equipment, but we feel it will solve the natural gas shortage in our area. The "technique" involves drilling new wells near existing ones. Our natural gas provider, Columbia Energy Group, has very inexpensive rates for their initial supply of natural gas. That makes our new technique more affordable. We would like your permission to drill new wells on land we lease from the Houston Prairie Conservancy, Inc., a local nature conservancy that helped negotiate the leases. The property is located in the northwest quadrant of Buffalo Bayou in the outer loop, north of Meyerland and south of Foster. The new wells would be in a field that is close to an existing well field. Columbia Energy proposes to drill one new well between each pair of existing wells in the existing field. If our request is approved, Columbia Energy would drill up to six new wells on our land. Each well would provide between 5,000 and 15,000 cubic feet of natural gas per day to Houston Prairie Conservancy, Inc. and up to 100,000 cubic feet of natural gas per day to us. We would sell the gas to the intrastate grid, so this gas would not be available for industrial uses. A map of the area is attached. Columbia Energy will call you to discuss this project. We plan to call you after we have received permission from the conservancy and have the lease agreements signed. If we have your permission to drill the new wells, we would meet with the conservancy board of directors to get its permission to enter the existing field. The two lease agreements would call for a $5,000 annual payment to the conservancy. We propose to drill these wells at no cost to Houston Prairie Conservancy, Inc., and sell the gas to the intrastate grid. In addition, if you feel it is appropriate, we will provide our conservancy contacts with technical information about the potential production on your land. If you approve, please sign one of the attached copies of this letter and return it to me. My contact information is below. You can also e-mail me your response at rwilliams@pandaenergy.com. Thank you for your consideration. I look forward to hearing from you soon. Sincerely, Richard Richard C. Williams Vice President Panda Energy International 7622 Shady Grove Road Suite 208 Houston, Texas 77084 U.S.A. Direct: 713-973-9510 Fax: 713-877-3123 Richard C. Williams Vice President Panda Energy International 7622 Shady Grove Road Suite 208 Houston, Texas 77084 U.S.A. Direct: 713-973-9510 Fax: 713-877-3123 - Houston Prairie NNG Drill Site Map.gif - Houston Prairie NNG Map.gif