Fall 2014 Newsletter

Dear Shareholders,

The Board of Directors would like to thank everyone who sent in their proxy cards for the rescheduled Annual Stockholders meeting. As a result, we were able to meet quorum and the proposed amended and restated by-laws were passed.

This year the company faced a number of new challenges within the shifting business landscape. As many of you may already know, this January a storage tank owned by Freedom Industries leaked 10,000 gallons of toxic chemicals into the Elk River impacting the drinking water supply for nearly 300,000 residents of West Virginia. Due to this unfortunate event, the State of West Virginia passed Senate Bill 383, the Aboveground Storage Tank Act (W. Va. Code § 22-30-1, et seq.). With the passing of this bill any company, including our own, that is an owner of a storage tank that holds in excess of 1,320 gallons must register each tank with the Department of Environmental Protection, file a SPCC plan with the State and have a yearly inspection performed by a certified engineer. While on the surface this is a good idea, it is also a costly one and represents a new expense that the company must carry in perpetuity should this law stay in effect.

Furthermore, while we began the year receiving over $4.00/MCF for our gas, an increase from 2013, the market has deteriorated throughout the year and we are forecasting to close 2014 at slightly above $3.50/MCF. The company has been fortunate that our pipelines are considered free flowing as opposed to the pipelines which runs through the northern part of West Virginia and Pennsylvania. There is a "glut" of gas flowing in those areas that has dropped the price of gas paid to those producers to almost $2.00/MCF less than what we are paid for the same month.

Overall, the business continues to evalute the production capablities and viability of our wells as we explore opportunities to maximize profits for our shareholders.