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<SEC-DOCUMENT>0000788965-09-000036.txt : 20091216
<SEC-HEADER>0000788965-09-000036.hdr.sgml : 20091216
<ACCEPTANCE-DATETIME>20091215184444
ACCESSION NUMBER:		0000788965-09-000036
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20081231
FILED AS OF DATE:		20091216
DATE AS OF CHANGE:		20091215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HALLADOR PETROLEUM CO
		CENTRAL INDEX KEY:			0000788965
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				841014610
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14731
		FILM NUMBER:		091242890

	BUSINESS ADDRESS:	
		STREET 1:		1660 LINCOLN ST STE 2700
		CITY:			DENVER
		STATE:			CO
		ZIP:			80264
		BUSINESS PHONE:		3038395505

	MAIL ADDRESS:	
		STREET 1:		1660 LINCOLN STREET
		STREET 2:		SUITE 2700
		CITY:			DENVER
		STATE:			CO
		ZIP:			80264

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KIMBARK OIL & GAS CO /CO/
		DATE OF NAME CHANGE:	19900102

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KIMBARK INC
		DATE OF NAME CHANGE:	19860624
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>amend10k2008.htm
<DESCRIPTION>AMENDMENT NO. 1 - SEPTEMBER 30, 2009 FORM 10-Q
<TEXT>
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<head>
    <title>amend10k2008.htm</title>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Arial">UNITED STATES</font> </font>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Arial">SECURITIES AND EXCHANGE COMMISSION</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Washington, D. C. 20549</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">FORM 10-K/A</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font size="3" style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">(Amendment No. 1)</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">[ x ]</font></div></td>
<td align="left" colspan="4" valign="top" width="88%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></div></td></tr><tr>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: arial">For the fiscal year ended: <font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: arial">December 31, 2008</font></font></font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">OR</font></div></td></tr><tr>
<td valign="top" width="4%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">[&#160; ]</font></div></td>
<td align="left" colspan="4" valign="top" width="88%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></div></td></tr><tr>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" colspan="4" valign="top" width="88%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td colspan="4" valign="top" width="88%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">Commission file number: 0-14731</font></div></td></tr><tr>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" colspan="4" valign="top" width="88%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td colspan="4" valign="top" width="88%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: arial">HALLADOR PETROLEUM COMPANY</font></div></td></tr><tr>
<td colspan="2" valign="top" width="51%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">COLORADO</font></font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">(State of incorporation)</font></div></td>
<td align="left" valign="top" width="6%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="35%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">84-1014610</font></font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">(IRS Employer Identification No.)</font></div></td>
<td valign="top" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div>
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<div align="center">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="top" width="51%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">1660 Lincoln Street, Suite 2700, Denver, Colorado</font></font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">(Address of principal executive offices)</font></div></td>
<td align="left" valign="top" width="6%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="34%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">80264-2701</font></font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">(Zip Code)</font></div></td></tr><tr>
<td align="left" valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="6%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="34%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">Issuer's telephone number: 303.839.5504</font></div></td>
<td align="left" valign="top" width="6%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="34%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial">Fax: 303.832.3013</font></div></td></tr></table></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Securities registered pursuant to Section 12(b) of the Exchange Act:&#160;&#160;NONE</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Securities registered pursuant to Section 12(g) of the Exchange Act: &#160;Common Stock, $.01 par value </font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. <font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Yes <font style="DISPLAY: inline;" face="Wingdings">o</font>&#160;&#160;No <font style="DISPLAY: inline;" face="Wingdings">x</font></font></font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial">Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act. Yes <font style="DISPLAY: inline;" face="Wingdings">o</font>&#160;&#160;No <font style="DISPLAY: inline;" face="Wingdings">x</font></font></font></font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial">Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. <font style="DISPLAY: inline;" face="Wingdings">x</font></font></font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.&#160;&#160;See the definitions of "larger accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&#160;</div>
<div style="TEXT-ALIGN: left">
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<tr style="TEXT-ALIGN: left;">
<td valign="top" width="58%" style="TEXT-ALIGN: left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;Large accelerated filer</font></font></font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>Accelerated filer</font></font></font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;Non-accelerated filer (do not check if a small reporting company)</font></font></font></div></td>
<td valign="top" width="36%" style="TEXT-ALIGN: left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 11pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">x</font>Smaller reporting company</font></font></font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes <font style="DISPLAY: inline;" face="Wingdings">o</font>&#160;&#160;No <font style="DISPLAY: inline;" face="Wingdings">x</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">The aggregate market value of the common stock held by non-affiliates on June 30, 2008, was about $3.1 million based on the closing price reported that date by the OTC Bulletin Board of $3.50 per share.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">As of March 24, 2009 we had 22,446,028 shares outstanding.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Arial">DOCUMENTS INCORPORATED BY REFERENCE:&#160;&#160;NONE</font> </div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">EXPLANATORY NOTE</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">This Form&#160;10-K/A is being filed solely to amend Exhibits 31 and 32&#160;(the SOX 302 and 906&#160;certifications) of the original filing and to include a consent from our auditors.&#160; This 10-K/A&#160;does not amend any other information set forth in the original filing and we have not updated disclosures contained therein to reflect
any events that occurred subsequent to the date of the original filing.</font></div>
<br>
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<br><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 1.&#160;&#160;&#160; BUSINESS.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">General Development of Business</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Hallador Petroleum Company (Hallador), a Colorado corporation, was organized by our predecessor in 1949.&#160;&#160;Over 90% of our stock is closely held; see Item 12 of this Form 10-K for a listing of our major shareholders.&#160;&#160;Our stock is thinly traded on the OTC Bulletin Board.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our primary operating property is the Carlisle coal mine located in western Indiana of which we own an 80% interest.&#160;&#160;The Carlisle mine was in the development stage through January 31, 2007.&#160;&#160;Commercial coal production began February 5, 2007.&#160;&#160;&#160;We also have a 45% equity interest in Savoy Energy, L.P., an oil and gas
company which has operations in Michigan.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In late 2006, we concluded to deemphasize our oil and gas operations and concentrate our efforts in the coal business.&#160; In July 2007, we sold our San Juan producing oil and gas properties and in October 2008 we sold substantially all of our unproved oil and gas properties.&#160;&#160;Our remaining oil and gas properties are not significant.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">With that in mind, the following events have occurred during the last two years:</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Through a series of transactions which began in 2006 and ended in July 2008, we now own an 80% interest in Sunrise Coal, LLC (Sunrise).&#160;&#160;On July 31, 2006, we entered into a partnership with Sunrise to develop the Carlisle mine.&#160;&#160;Sunrise contributed all of their assets for a 40% interest and we agreed to a $20.5 million funding commitment
(which we fulfilled during 2007) and guaranteed Sunrise's bank debt for a 60% interest.&#160;&#160;Our funding commitment was subsequently increased to $21.2 million and was fulfilled.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In July 2008 we purchased an additional 20% interest in Sunrise for about $12 million and such amount was allocated to mine development costs.&#160;&#160;Through approximately 92% of the partnership's cash flow we are to receive $22.9 million (our funding commitment of $21.2 million plus $1.7 million of acquired basis attributable to the interests sold
by certain Sunrise members) plus interest at 10%.&#160;&#160;&#160;Thereafter, cash flow will be distributed 80% to us and 20% to the remaining original Sunrise members.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Prior to the purchase of the additional 20% interest, we consolidated 100% of the Sunrise operations with a 13% minority interest.&#160;&#160;Subsequent to the purchase, we are now using an 8% minority interest.&#160;&#160;Once we receive our $22.9 million plus interest at 10%, the minority interest will change to 20%.&#160;&#160;</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Carlisle Mine</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We sell all of our coal to producers of electric power.&#160;&#160;&#160;Currently, we have only one mine (Carlisle) and our top three customers purchased about 90% of our 2008 coal production.&#160;&#160;First commercial production began February 5, 2007 and we sold about one million tons during 2007 at an average price of $28/ton.&#160;&#160;During
2008, we sold about 1.9 million tons at an average price of about $36.39/ton.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Coal production for 2009 is estimated at 3 million tons and about 3.3 million tons in each of the years 2010 and 2011.&#160;&#160;Recoverable reserves that are presently leased are about 43.5 million tons.&#160;&#160;Additional unleased reserves that could be mined in the future are about 12.5 million tons.&#160;&#160;There can be no assurance that
we will be able to obtain suitable lease terms.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Sunrise currently employs 230 people and will increase employment to 260 as production from a new fourth unit begins in April 2009.&#160;&#160;The mine currently operates two production shifts and one maintenance shift while coal is produced 270 days of the year.&#160;&#160;The Carlisle mine is non-union.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Customers and Backlog</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">As of December&#160;31, 2008, we had a sales backlog of 15.3&#160;million tons of coal and our coal supply agreements have remaining terms up to 6 years.&#160;&#160;For 2009 we are committed to sell 2.7 million tons;&#160;&#160;for 2010 - 3 million tons; 2011 - 2.8 million tons and for 2012 and later - 6.8 million tons.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">These commitments represent approximately 88%, 90% and 84% of our estimated production for 2009, 2010 and 2011, respectively, and represent about 1/3 of our recoverable reserves.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In 2008, 90% of our coal was sold to three electricity generating plants, all located in Indiana, which is where we have our primary customer base.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We expect to continue selling a significant portion of our coal under supply agreements with terms of one year or longer. Our approach is to selectively renew, or enter into new, coal supply contracts when we can do so at prices we believe are favorable.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Typically, customers enter into coal supply agreements to secure reliable sources of coal at predictable prices while we seek stable sources of revenue to support the investments required to open, expand and maintain or improve productivity at the mines needed to supply these contracts. The terms of coal supply agreements result from competitive bidding
and extensive negotiations with customers. Consequently, the terms of these contracts vary significantly in many respects including price adjustment features, coal quality requirements, quantity parameters, permitted sources of supply, treatment of environmental constraints, extension options, force majeure, and termination and assignment provisions.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our contracts contain provisions to adjust the base price due to new statutes, ordinances or regulations that impact our cost of performance. Additionally, our contracts contain provisions that allow for the recovery of costs impacted by modifications or changes in the interpretation or application of existing statutes or regulations.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Quality and volumes for the coal are stipulated in coal supply agreements, and in some limited instances buyers have the option to vary annual or monthly volumes if necessary. Variations to the quality and volumes of coal may lead to adjustments in the contract price.&#160;&#160;Our coal supply agreements contain provisions requiring us to deliver coal
within certain ranges for specific coal characteristics such as heat content (BTU), sulfur and ash content.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The main types of goods we purchase are mining equipment and replacement parts, steel-related (including roof control) products, belting products, lubricants, fuel and tires. Although we have many long, well-established relationships with our key suppliers, we do not believe that we are dependent on any of our individual suppliers other than for purchases
of certain underground mining equipment. The supplier base providing mining materials has been relatively consistent in recent years, although there has been some consolidation. Purchases of certain underground mining equipment are concentrated with one principle supplier; however, supplier competition continues to develop.</font></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">U.S.&#160;Coal Production</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The United States is the second largest coal producer in the world, exceeded only by China. Coal in the United States represents approximately 94% of the domestic fossil energy reserves with over 200&#160;billion tons of recoverable coal, according to the U.S.&#160;Geological Survey. The U.S.&#160;Department of Energy estimates that current domestic
recoverable coal reserves could supply enough electricity to satisfy domestic demand for more than 200&#160;years. Coal production in the United States has increased from 434&#160;million tons in 1960 to approximately 1.2&#160;billion tons in 2008 based on information provided by the Energy Information Administration.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Illinois Basin</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Illinois Basin includes Illinois, Indiana and western Kentucky and is a major coal production center in the interior region of the United States. Coal from the Illinois Basin varies in heat value and predominately has a high sulfur content. Despite its high sulfur content, coal from the Illinois Basin can generally be used by electric power generation
facilities that have installed pollution control devices, such as scrubbers, to reduce emissions. We anticipate that Illinois Basin coal will play an increasingly vital role in the U.S.&#160;energy markets in future periods.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Safety and Environmental Regulations</font></font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our operations, like operations of other coal companies, are subject to regulation, primarily by federal and state authorities, on matters such as: air quality standards; reclamation and restoration activities involving our mining properties; mine permits and other licensing requirements; water pollution; employee health and safety; management of materials
generated by mining operations; storage of petroleum products; protection of wetlands and endangered plant and wildlife protection.&#160;&#160;Many of these regulations require registration, permitting, compliance, monitoring and self-reporting and may impose civil and criminal penalties for non-compliance.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Additionally, the electric generation industry is subject to extensive regulation regarding the environmental impact of its power generation activities, which could affect demand for our coal over time. The possibility exists that new legislation or regulations may be adopted or that the enforcement of existing laws could become more stringent, causing
coal to become a less attractive fuel source and reducing the percentage of electricity generated from coal. Future legislation or regulation or more stringent enforcement of existing laws may have a significant impact on our mining operations or our customers&#8217; ability to use coal.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">While it is not possible to accurately quantify the expenditures we incur to maintain compliance with all applicable federal and state laws, those costs have been and are expected to continue to be significant. Federal and state mining laws and regulations require us to obtain surety bonds to guarantee performance or payment of certain long-term obligations,
including mine closure and reclamation costs.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Carlisle is a new mine and is operating in compliance with all local, state, and federal regulations.&#160;&#160;&#160;Since Carlisle is new, we have no old mine properties to reclaim, other than the Howesville mine, which also was a new mine and operated for only eight months before it was closed in June 2006 due to safety concerns.&#160;&#160;&#160;During
2007, we finished Phase I of the reclamation of the Howesville mine.&#160;&#160;To reach final reclamation we must raise commercial crops for a period of five years.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Mining Permits and Approvals</font></font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Numerous governmental permits or approvals are required for mining operations. When we apply for these permits and approvals, we may be required to prepare and present data to federal, state or local authorities data pertaining to the effect or impact that any proposed production or processing of coal may have upon the environment. The authorization,
permitting and implementation requirements imposed by any of these authorities may be costly and time consuming and may delay commencement or continuation of mining operations. Regulations also provide that a mining permit or modification can be delayed, refused or revoked if an officer, director or a shareholder with a 10% or greater interest in the entity is affiliated with another entity that has outstanding permit violations. Thus, past or ongoing violations of federal and state mining laws could provide
a basis to revoke existing permits and to deny the issuance of additional permits.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In order to obtain mining permits and approvals from state regulatory authorities, mine operators must submit a reclamation plan for restoring, upon the completion of mining operations, the mined property to its prior condition, productive use or other permitted condition. Typically, we submit the necessary permit applications several months or even
years before we plan to begin mining a new area. Some of our required permits are becoming increasingly more difficult and expensive to obtain, and the application review processes are taking longer to complete and becoming increasingly subject to challenge.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Under some circumstances, substantial fines and penalties, including revocation or suspension of mining permits, may be imposed under the laws described above. Monetary sanctions and, in severe circumstances, criminal sanctions may be imposed for failure to comply with these laws.&#160;&#160;Compliance with these laws has increased the cost of coal
mining for domestic coal producers.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Stringent safety and health standards have been imposed by federal legislation since Congress adopted the Coal Mine Health and Safety Act of 1969. The Federal Mine Safety and Health Act of 1977 significantly expanded the enforcement of safety and health standards and imposed comprehensive safety and health standards on all aspects of mining operations.
In addition to federal regulatory programs, the state in which we operate also has programs for mine safety and health regulation and enforcement.&#160;&#160;In reaction to several mine accidents in recent years, federal and state legislatures and regulatory authorities have increased scrutiny of mine safety matters and passed more stringent laws governing mining. For example, in 2006, Congress enacted the Mine Improvement and New Emergency Response Act of 2006, which we refer to as the MINER Act. The MINER Act
imposes additional obligations on coal operators including, among other things, the following:</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">development of new emergency response plans that address post-accident communications, tracking of miners, breathable air, lifelines, training and communication with local emergency response personnel;</font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">establishment of additional requirements for mine rescue teams;</font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">notification of federal authorities in the event of certain events;</font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">increased penalties for violations of the applicable federal laws and regulations;&#160;and</font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">requirement that standards be implemented regarding the manner in which closed areas of underground mines are sealed.</font></div></td></tr></table></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Environmental</font></font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Legislators are considering the passage of significant new laws, regulators are considering using existing laws to limit greenhouse gas emissions, and other measures are being imposed or offered with the ultimate goal of reducing greenhouse gas emissions. For instance, in addition to the potential for the EPA to impose regulations on carbon dioxide
emissions as described above, we also anticipate that Congress will evaluate greenhouse gas legislation in the short-term.&#160;&#160;If successful, there could be reductions in or other limitations on the amount of coal our customers could utilize.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The permitting of new coal-fueled power plants has also recently been contested by state regulators and environmental organizations based on concerns relating to greenhouse gas emissions. As a result, certain power generating companies may reconsider short-term or long-term plans to build coal-fueled plants or may elect to build capacity using alternative
forms of electrical generation.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Coal Mining Methods</font></font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The geological characteristics of coal reserves largely determine the coal mining method employed. There are two primary methods of mining coal:&#160;&#160;surface mining and underground mining.&#160;&#160;&#160;The Carlisle mine is an underground mine, and is operated using room-and-pillar mining.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Room-and-pillar mining is effective for small blocks of thin coal seams. In room-and-pillar mining, we cut a network of rooms into the coal seam, leaving a series of pillars of coal to support the roof of the mine. We use continuous mining equipment to cut the coal from the mining face and battery cars to transport the coal to a conveyor belt for
further transportation to the surface. The pillars generated as part of this mining method can constitute up to 50% of the total coal in a seam.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Coal Preparation</font></font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Coal extracted from Carlisle contains impurities, such as rock and sulfur impurities.&#160;&#160;We use a coal preparation plant located at the mine to remove impurities from the coal and to insure our product meets contract specifications.&#160;&#160;Our coal preparation plant allows us to treat the coal we extract from Carlisle to ensure a consistent
quality.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Transportation</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We sell our coal FOB the mine.&#160;&#160;Most of our coal is transported by rail and some by truck.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Competition</font></font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The coal industry is intensely competitive.&#160;&#160;The most important factors on which we compete are coal quality, transportation costs from the mine to the customer and the reliability of supply. Most of our competitors are larger than us and have greater financial resources and larger reserve bases.</font></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have no significant patents, trademarks, licenses, franchises or concessions.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Other than the coal employees in Indiana, we have four full-time&#160;and two part-time employees in Denver. When needed we also engage consultants, accountants and attorneys on a fee basis.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our office is located at 1660 Lincoln Street, Suite 2700, Denver, Colorado 80264, phone 303.839.5504, fax 303.832.3013.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Sunrise Coal's corporate office is located at 1183 Canvasback Drive, Terre Haute, Indiana 47802, phone 812.299.2800, fax 812.299.2810. Terre Haute is approximately 70 miles west of Indianapolis, Indiana. Our website is <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">www.sunrisecoal.com.</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Smaller reporting companies are not required to provide the information required by this item.</font></div>
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<br><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 2. PROPERTIES.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Carlisle mine, located near the town of Carlisle in Sullivan County, Indiana, is an underground mine which became operational in January 2007; during 2006 the mine was under development. The coal is accessed with a slope to a depth of 340'. The coal is mined in the Indiana Coal V seam which is high volatile B bituminous coal.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our current mine plan indicates 13,500 acres of mineable coal with approximate 4' to 5' thickness in the project area. Of the 13,500 acres, 11,900 are currently under lease to Sunrise. The Indiana V seam has been extensively mined by underground and surface methods in the general area and is the most economically significant coal in Indiana.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Findings are based on generally accepted engineering principles and professional experience in the mining industry. All judgments are based on the facts that are available at this time.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Coal Reserve Estimates</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We estimate that, as of December 31, 2008, we had total recoverable reserves of approximately 43.5 million tons consisting of both proven and probable reserves. &#8220;Reserves&#8221; are defined by the SEC Industry Guide 7 (Guide 7) as that part of a mineral deposit, which could be economically and legally extracted or produced at the time of the reserve
determination. &#8220;Recoverable&#8221; reserves mean coal that is economically recoverable using existing equipment and methods under federal and state laws currently in effect. Approximately 29.5 million tons of reserves are classified as proven reserves. &#8220;Proven (measured) reserves&#8221; are defined by Guide 7 as reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling
and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. The remaining approximately 14 million tons of our reserves are classified as probable reserves. &#8220;Probable reserves&#8221; are defined by Guide 7 as reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for
inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.&#160;&#160;Our reserve estimates were prepared by Samuel Elder, Sunrise's mining engineer.&#160;&#160;Mr. Elder is a licensed Professional Engineer in the State of Indiana and has over 20 years experience estimating coal reserves.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Mine Reserve estimate for the 11,900 leased acres was made utilizing Carlson mining 2007 (software developed by Carlson Software). To convert volumes of coal to an in-place tonnage, a weight of 80 pounds/cubic foot was used. To convert to product tonnage, a 55% mine recovery and an average of 81% washed recovery (coal only recovery, no out-of- seam
dilution included) were used.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Example: In-place tonnage x 55% x 81% = product tonnage.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Standards set forth by the United States Geological Survey were used to place areas of the mine reserves into the Proven (measured) and Probable (indicated) categories. Under these standards, coal within 1,320' of a data point is considered to be proven, and coal within 1,320' to 3,960' is placed in the Probable category. All reserves are stated as
a final saleable product.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Carlisle mine currently has road frontage on State Highway 58, and is adjacent to the CSX railroad. The Carlisle mine has a double 100 car loop facility.&#160;&#160;The majority of our sales are shipped by rail and the remainder is trucked.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Currently only the Indiana V seam is planned to be mined, and all of the controlled tonnage is leased to Sunrise. Most leases have unlimited terms once mining has begun, and yearly payments or earned royalties are kept current. Mineable coal thickness used is greater than four feet. The current Carlisle mine plan is broken into four areas&#8211; North Main &#8211; South Main &#8211; West Main &#8211; 2 South Main. Approximately
88% of the total mine plan is currently under lease ("controlled"). It is believed that all additional property that would be required to access all lease areas can be obtained but, if some properties cannot be leased, some modification of the current mine plan would be required. All coal should be mined within the terms of the leases. Leasing programs are continuing by Sunrise staff.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Mine construction began in 2006 and the first coal sales were in February 2007.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Carlisle mine has a dual use slope for the main coal conveyor, and the moving of supplies and personnel without a hoist. There are two 8' diameter shafts at the base of the slope for mine ventilation.&#160;&#160;Two additional shafts are under construction to facilitate the mine expansion.&#160;&#160;The slope is 18' wide with concrete and steel arch construction. All underground mining equipment is powered with electricity
and underground compliant diesel.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Current production capabilities are 2.7 million tons per year. Additional equipment is planned to increase production to 3 million tons per year in 2009. Total reserves in the current mine plan (both controlled and uncontrolled) indicates approximately 19 years production at 3 million tons per year. The mine plan is a basic room-and-pillar mine using a synchronized continuous miner section with no retreat mining. Plans are for
60'x80' pillars with 18' entries for our mains, and 60'x60' pillars with 20' entries in the rooms.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Carlisle mine has been in production since January 2007. The North Main, Sub Main #1, and the South Main have been developed with three units currently in production.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Quality specifications for saleable product are 13%-16% moisture; 10,900-11,400 BTU; 8%-10% ash; and 5-6.5 LB SO<font style="FONT-SIZE: 12pt"><font style="FONT-SIZE: 85%; VERTICAL-ALIGN: sub">2.</font></font></font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The Carlisle mine has a 400 tons/hour raw feed wash plant. The wash plant is modular in construction and construction is currently underway to double the current capacity (anticipated completion date of April 2009).</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Mine dilution is assumed to be from 6% - 10% depending on seam height.</font></div></td></tr></table></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Controlled and proven (measured) reserves are 29.5 million tons and controlled and probable (indicated) reserves are 14.0 million tons.</font></div></td></tr></table></div>
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<div align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">PART II</font></div></td></tr></table></div></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ITEM 5.&#160;&#160;&#160; MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS </font></div>
<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; AND ISSUER PURCHASES OF EQUITY SECURITIES.</font></div></td></tr></table></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our common stock is traded on the OTC Bulletin Board under the symbol &#8220;HPCO.OB&#8221;.&#160; The following table sets forth the high and low sales price for the periods indicated:</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">High</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Low</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.00</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2.95</font></div></td>
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<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; First quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4.55</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4.00</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; Second quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4.50</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.25</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; Third quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">5.50</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.25</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; Fourth quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">5.50</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2.50</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; First quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.25</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2.50</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; Second quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.50</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2.50</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160; Third quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.25</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2.85</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="65%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;Fourth quarter</font></div></td>
<td align="left" valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.55</font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2.75</font></div></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="65%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="center" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div></div></div></div></div>
<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">During the last two years no dividends were paid.&#160; We have no present intention to pay any dividends in the foreseeable future.&#160;&#160;Our loan agreements restrict our ability to pay dividends.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">At March 24, 2009, we had about 400 shareholders of record of our common stock; this number does not include the shareholders holding stock in "street name."&#160;&#160;The last recorded sales price was $2.95.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Equity Compensation Plan Information</font></font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have 550,000 options outstanding, at an exercise price of $2.30.&#160;&#160;The issuance of our stock options were not approved by security holders.&#160;&#160;We also have 170,000 restricted stock units that have been granted to certain employees and 360,000 are available for future issuance.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 6.&#160;&#160;&#160; SELECTED FINANCIAL DATA.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Smaller reporting companies are not required to provide the information required by this item.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">10</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div></div>
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<table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ITEM 7.&#160; &#160; MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS</font></div>
<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; &#160;OF OPERATION.</font></div></td></tr></table></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Overview</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our consolidated financial statements should be read in conjunction with this discussion.&#160; Our primary operating property is the Carlisle coal mine located in western Indiana of which we own an 80% interest.&#160;&#160;The Carlisle mine was in the development stage through January 31, 2007.&#160;&#160;Commercial coal production began February 5,
2007.&#160;&#160;&#160;We also have a 45% equity interest in Savoy Energy, L.P., an oil and gas company which has operations in Michigan.&#160; Over 90% of our stock is closely held; see Item 12 of this Form 10-K for a listing of our major shareholders.&#160;&#160;Our stock is thinly traded on the OTC Bulletin Board.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In late 2006, we concluded to deemphasize our oil and gas operations and concentrate our efforts in the coal business.&#160; In July 2007, we sold our San Juan producing oil and gas properties and in October 2008 we sold substantially all of our unproved oil and gas properties.&#160;&#160;Our remaining oil and gas properties are not significant.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have entered into significant equity transactions with the Yorktown Energy group of partnerships (Yorktown) and other entities that invest with them.&#160; Yorktown, our largest shareholder, owns about 55% of our common stock and represents one of the five seats on our board.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Liquidity and Capital Resources</font></font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In December 2008, we entered into a new loan agreement with a bank consortium that provides for a $40 million term loan and a $30 million revolving credit facility.&#160;&#160;Through December 31, 2008, we have fully drawn down the $40 million term loan (which matures in 2012) and have $27 million available under the revolver due to outstanding letters
of credit of $3 million.&#160;&#160;Substantially all of Sunrise's assets were pledged under this loan agreement and we are the guarantor.&#160;&#160;&#160;The loan agreement requires customary covenants, required financial ratios and restrictions on dividends or distributions.&#160;&#160;The current interest rate is LIBOR (0.9%) plus 3.50% or 4.4%.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In connection with the old loan agreements, we entered into two interest rate swap agreements swapping variable rates for fixed rates. The first swap agreement covered $26 million in debt and commenced July 15, 2007 and matures on July 15, 2012. The second swap agreement covers $10 million and commenced December 28, 2007 and matures on December 28,
2011.&#160;&#160;The two swap agreements fix our interest rate at about 8.3%. &#160;At December 31, 2008 and 2007, we recorded the estimated fair value of the two swaps as a $2.29 million and $1.18 million liability, respectively.&#160;&#160;The increase of $1.11 million was recorded as additional interest expense for 2008.&#160;&#160;Such amount in 2007 was about the same.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Accounting rules require us to recognize all derivatives on the balance sheet at estimated fair value. Derivatives that are not hedges must be adjusted to estimated fair value through earnings. We have no derivatives designated as a hedge.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We plan to fund future mine expansion through a combination of draws from the $30 million revolver and cash from operations.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have no material off-balance sheet arrangements.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Results of Operations&#160;</font></font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">During 2008, we sold about 1,933,000 tons of coal at an average selling price of about $36.39/ton.&#160;&#160;January and February 2009 average prices were in the $45 range.&#160;&#160;During 2008, we had three major contracts with three utilities that accounted for over 90% of our coal sales.&#160;&#160;Two of the contracts run through 2013 and the
third runs through 2012 with an option for two more years.&#160;&#160;We anticipate our sales under these three contracts to range from 2.7 million tons per year to 3.2 million tons per year.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Coal sales began in February 2007 and for the year 2007 we sold 972,500 tons at an average price of about $28/ton.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">During the last two years, we have sold substantially all of our oil and gas properties at a cumulative gain of about $3.8 million.&#160;&#160;We do not expect such gains in the future.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The $2.3 million equity loss from Savoy resulted primarily from Savoy taking a $2.6 million impairment charge relating to their oil and gas properties.&#160;&#160;&#160;Furthermore, the difference between the purchase price and our pro rata share of Savoy's partners' capital&#160;&#160;was amortized based on Savoy's units-of-production rate and amounted
to about $333,000 for 2008 and $279,000 for 2007.&#160;&#160;In addition, due to deteriorating industry conditions, we took a $1.4 million impairment charge relating to our investment in Savoy.&#160;&#160;We concluded that Savoy's balance sheet, considering their impairments, reflected our best estimate of Savoy's fair value.&#160;&#160;Accordingly, we compared our investment account in Savoy to 45% of Savoy's equity accounts and the excess amounted to about $1.4 million.&#160;&#160;Consequently, we impaired
our investment account by such amount.&#160;&#160;Considering this impairment charge, we no longer have a difference between the purchase price and our pro rata share of Savoy's partners' capital.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The increase in cost of coal sales and DD&amp;A was due to the significant increase in our coal sales.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">During 2008 and 2007, we issued restricted stock units to our officers and others.&#160;&#160;The expense for 2008 was about $1.7 million higher than in 2007 for such units.&#160;&#160;The additional increase in G&amp;A was due primarily to the higher level of operations.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Interest expense stayed about the same for both years.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">For most of our history, we operated in a loss position and had significant net operating loss carry forwards.&#160;&#160;At December 31, 2008, we have federal net operating loss carry forwards of about $2.5 million and expect to utilize them in 2009.&#160;&#160;For 2008, we had pretax income of about $11.8 million and a tax provision of about $2.9
million.&#160;&#160;We expect these income trends to continue and estimate our effective tax rate to be in the 35% - 40% range for the foreseeable future.&#160;&#160;We no longer deem it necessary to have a deferred tax valuation allowance.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Sale of Oil and Gas Properties</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In early July 2007 we sold our interest in the San Juan properties for $2.3 million.&#160;&#160;We recognized a gain of about $1.7 million.&#160;&#160;During 2007, certain unproved properties were sold resulting in a gain of about $200,000.&#160;&#160;In October 2008, we sold unproved properties for about $2 million and recognized a gain of about $1.4
million.&#160;&#160;Other sales during 2008 resulted in gains of about $400,000.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Other than our equity investment in Savoy, our remaining oil and gas properties are not significant and we will be making minimal disclosures, if any, regarding them.</font></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Critical Accounting Estimate and Significant Accounting Policies</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We believe that the estimate of our coal reserves is our only critical accounting estimate.&#160;&#160;Since the Carlisle mine has only been in production since February 2007 we do not have a long history to rely on.&#160;&#160;The reserve estimates are used in the DD&amp;A calculation, in our impairment test and in our internal cash flow projections.&#160;&#160;If
these estimates turn out to be materially under or over-stated, then our DD&amp;A expense and impairment test would be affected.&#160;&#160;&#160;In addition, if the reserves are materially overstated then our liquidity would be adversely affected.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our significant accounting policies are set forth in Note 1 to the Financial Statements.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">New Accounting Pronouncements</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Other than SFAS 160, none of the recent FASB pronouncements had, or will have any material effect on us.&#160;&#160;In December 2007, the FASB issued SFAS No.&#160;160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No.&#160;51. This statement requires an entity to separately disclose non-controlling
interests as a separate component of equity in the balance sheet and clearly identify on the face of the income statement net income related to non-controlling interests. This statement is effective for financial statements issued for fiscal years beginning after December&#160;15, 2008. The adoption of this statement will change how we present our minority interest with Sunrise but will not have a material affect on our financial statements.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 7A.&#160; QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Smaller reporting companies are not required to provide the information required by this item.</font></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 8.&#160; FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.</font></div></div></td></tr></table></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Report of Independent Registered Public Accounting Firm</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Consolidated Balance Sheet</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Consolidated Statement of Operations</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Consolidated Statement of Cash Flows</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">18</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Consolidated Statement of Stockholders' Equity</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">To the Board of Directors and Stockholders</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Hallador Petroleum Company</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Denver, Colorado</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have audited the accompanying consolidated balance sheet of Hallador Petroleum Company and Subsidiaries as of December 31, 2007 and 2008 and the related consolidated statements of operations, cash flows and stockholders' equity for each of the years in the two year period ended December 31, 2008.&#160;&#160;&#160;These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial condition of Hallador Petroleum Company and Subsidiaries, as of December 31, 2007 and 2008 and the consolidated results of their operations and their cash flows for each of the years in the two year period ended
December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.</font></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">/s/ Ehrhardt Keefe Steiner &amp; Hottman PC</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">March 25, 2009</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Denver, Colorado</font></div>
<br>
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<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">15</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Consolidated Balance Sheet</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">&#160;(in thousands, except share data)</font></div>
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<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ASSETS</font></div></td>
<td valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="6" valign="bottom">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">As of December 31,</font></div></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Current assets:</font></div></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></font></font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></font></font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash and cash equivalents</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,013</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,978</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Certificate of deposit &#8211; restricted</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,800</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Federal income tax receivable</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,531</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Accounts receivable</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,113</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,361</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Coal inventory</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">776</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">92</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,928</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">861</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total current assets</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">31,361</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">12,092</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Coal properties, at cost:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Land, buildings and equipment</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">55,027</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">32,548</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Mine development</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">45,289</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">32,137</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">100,316</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">64,685</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Less - accumulated depreciation, depletion, and amortization</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(7,233 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,743 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">93,083</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">61,942</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Investment in Savoy</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">7,911</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">11,893</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other assets</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3,710</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,330</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">136,065</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">87,257</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">LIABILITIES AND STOCKHOLDERS' EQUITY</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Current liabilities:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Current portion of bank debt</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,500</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,893</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Accounts payable and accrued liabilities</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">11,563</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">5,550</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">State income tax payable</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">605</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">310</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">620</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total current liabilities</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">14,978</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">8,063</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Long-term liabilities:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Bank debt, net of current portion</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">37,500</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">33,464</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Interest rate swaps, at estimated fair value</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,290</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,181</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Deferred income taxes</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,700</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Asset retirement obligations</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">686</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">646</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,345</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,346</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total long-term liabilities</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">46,521</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">39,637</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total liabilities</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">61,499</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">47,700</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Minority interest</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,683</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">384</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Stockholders' equity:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Preferred stock, $.10 par value, 10,000,000 shares authorized; none issued</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Common stock, $.01 par value, 100,000,000 shares authorized; 22,446,028 and 16,362,528 outstanding, respectively</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">224</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">163</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
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<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">69,739</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">44,990</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Retained earnings (deficit)</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,920</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(5,980 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total stockholders' equity</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">72,883</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">39,173</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">136,065</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">87,257</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">See accompanying notes.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">16</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Consolidated Statement of Operations</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">For the years ended December 31,</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(in thousands, except per share data)</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Revenue:</font></div></td>
<td align="right" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Coal sales</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">70,337</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">27,228</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Gain on sale of oil and gas properties</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,822</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,933</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Equity income (loss) &#8211; Savoy</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,320</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">35</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">359</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">533</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">70,198</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">29,729</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Costs and expenses:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cost of coal sales</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">40,413</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,866</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">DD&amp;A</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,630</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,420</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">G&amp;A</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,128</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,161</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Interest</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,029</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,113</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Impairment &#8211; Savoy</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,396</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">56,596</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">32,560</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Income (loss) before minority interest and income taxes</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">13,602</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,831</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Minority interest</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,776</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">416</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Income (loss) before income taxes</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">11,826</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,415</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Income taxes:</font></div></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Current</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,226</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Deferred</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,700</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,926</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net income (loss)</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">8,900</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,415</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net income (loss) per share:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Basic</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">.47</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(0.18</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Diluted</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">.46</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(0.18</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Weighted average shares outstanding:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Basic</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">18,980</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">13,300</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Diluted</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">19,286</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">13,300</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">See accompanying notes.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">17</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div></div>
<br>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Consolidated Statement of Cash Flows</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">For the years ended December 31,</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(in thousands)</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div>
<div align="center">
<div align="center">
<div align="center">
<div align="center">
<div align="center">
<div align="center">
<div align="center">
<div align="left">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Operating activities:</font></div></td>
<td valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net income (loss)</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">8,900</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,415</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Deferred income taxes</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,700</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Minority interest</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,776</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(416 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Equity income (loss) &#8211; Savoy</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,320</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(35 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Impairment &#8211; Savoy</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,396</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Gain on sale of oil and gas properties</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,822 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,933 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Depreciation, depletion, and amortization</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,630</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,420</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Change in fair value of interest rate swaps</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,109</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,181</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Stock-based compensation</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,826</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,899</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">133</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">195</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Change in current assets and liabilities:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Accounts receivable</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(3,707 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,361 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Coal inventory</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(684 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(92 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Income taxes</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(925 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Accounts payable and accrued liabilities</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,484</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,368</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,384 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(136 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash provided by (used in) operating activities</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">18,752</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(325 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Investing activities:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Acquisition of additional 20% interest in Sunrise</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(11,772 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Capital expenditures for coal properties</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(21,898 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(17,244 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Sales of oil and gas properties</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,676</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,548</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Investment in Savoy</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(6,020 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,501 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash used in investing activities</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(30,994</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(22,217 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Financing activities:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Proceeds from bank debt</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">42,000</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10,140</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Payments of bank debt</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(37,357 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Proceeds from stock sales</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,984</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">11,050</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Capital contributions from Sunrise minority owners</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">800</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Proceeds from exercise of stock options</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">460</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(350 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(136 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash provided by financing activities</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">26,277</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">22,314</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Increase (decrease) in cash and cash equivalents</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">14,035</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(228 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash and cash equivalents, beginning of year</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,978</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">7,206</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash and cash equivalents, end of year</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,013</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,978</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash paid for interest (net of amount capitalized - $176 and $148)</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,879</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,290</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Cash paid for income taxes</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,000</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Non-cash investing activity -accounts payable for coal properties</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3,032</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,136</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Acquisition of minority interest</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">477</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">&#160;&#160;</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">See accompanying notes.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">18</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div></div>
<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Consolidated Statement of Stockholders' Equity</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(in thousands)</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div>
<div align="center">
<div align="center">
<div align="center">
<div align="left">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Common Stock</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Additional</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Paid-In Capital</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Retained Earnings (Deficit)</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Balance December 31, 2006</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">121</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">31,623</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(3,565</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">28,179</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Stock sale to Yorktown and others</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(3,564,517 shares)</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">36</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">11,014</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">11,050</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Exercise of 200,000 stock options</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">458</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">460</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Restricted stock awards</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,393</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,397</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Stock-based compensation</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">502</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">502</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net loss</font></div></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,415 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,415 </font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Balance December 31, 2007</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">163</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">44,990</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(5,980 </font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">39,173</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">July stock sale, net of issuance costs (5,500,000 shares)</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">55</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,929</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,984</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Restricted stock awards</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,280</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,286</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Stock-based compensation</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">540</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">540</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%" style="PADDING-BOTTOM: 2px">
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<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
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<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
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<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">8,900</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="52%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Balance December 31, 2008</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">224</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">69,739</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,920</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">72,883</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">See accompanying notes.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">19</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div></div>
<br>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Summary of Significant Accounting Policies</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Basis of Presentation and Consolidation</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The consolidated financial statements include the accounts of Hallador Petroleum Company (the Company) and its majority-owned subsidiary Sunrise Coal, LLC (Sunrise).&#160;&#160;All significant intercompany accounts and transactions have been eliminated.&#160; We are engaged in the production of coal from a shallow underground mine located in western
Indiana.&#160;&#160;We also own a 45% equity interest in Savoy Energy L.P., a private oil and gas company which has operations in Michigan.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have entered into significant equity transactions with Yorktown and other entities that invest with Yorktown.&#160; Yorktown currently owns about 55% of our common stock and represents one of the five seats on our board.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Reclassification</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">To maintain consistency and comparability, certain amounts in the 2007 financial statements have been reclassified to conform to current year presentation.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Inventories</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Coal and supplies inventories are valued at the lower of average cost or market. Coal inventory costs include labor, supplies, equipment costs and overhead.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Advance Royalties</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Coal leases that require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Coal Properties</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Coal properties are recorded at cost. Interest costs applicable to major asset additions are capitalized during the construction period. Expenditures that extend the useful lives or increase the productivity of the assets are capitalized. The cost of maintenance and repairs that do not extend the useful lives or increase the productivity of the assets
are expensed as incurred.&#160;&#160;Other than land and underground mining equipment, coal properties are depreciated using the units-of-production method over the estimated recoverable reserves. Underground mining equipment is depreciated using estimated useful lives ranging from five to twenty years.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">20</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div></div>
<br>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">If facts and circumstances suggest that a long-lived asset may be impaired, the carrying value is reviewed for recoverability. &#160;If this review indicates that the carrying value of the asset will not be recoverable through estimated undiscounted future net cash flows related to the asset over its remaining life, then an impairment loss is recognized
by reducing the carrying value of the asset to its estimated fair value.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Mine Development</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Costs of developing new coal mines, including asset retirement obligation assets, or significantly expanding the capacity of existing mines, are capitalized and amortized using the units-of-production method over estimated recoverable (proved and probable) reserves.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Asset Retirement Obligations - Reclamation</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">At the time they are incurred, legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to asset retirement obligation assets. Obligations are typically incurred when we commence development of underground mines, and include reclamation of support facilities, refuse
areas and slurry ponds.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Obligations are reflected at the present value of their discounted cash flows.&#160;&#160;We reflect accretion of the obligations for the period from the date they are incurred through the date they are extinguished. The asset retirement obligation assets are amortized using the units-of-production method over estimated recoverable (proved and probable)
reserves.&#160;&#160;We are using a 6% discount rate.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Federal and state laws require that mines be reclaimed to their previous condition in accordance with specific standards and approved reclamation plans, as outlined in mining permits.&#160;&#160;Activities include reclamation of pit and support acreage at surface mines, sealing portals at underground mines, and reclamation of refuse areas and slurry
ponds.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We assess our ARO at least annually, and reflect revisions for permit changes, as granted by state authorities, for revisions to the estimated reclamation costs, and for revisions to the timing of those costs.</font></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The following table reflects the changes to our ARO:</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<div align="right">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="45%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="center" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="7%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline">2008</font></font></div></td>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline">2007</font></font></div></td>
<td valign="bottom" width="25%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="45%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Balance beginning of period</font></div></td>
<td align="left" valign="center" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="5%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="top" width="7%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">646</font></div></td>
<td align="right" valign="top" width="5%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">912</font></div></td>
<td align="left" valign="bottom" width="25%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="45%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Accretion</font></div></td>
<td align="left" valign="center" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="7%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">40</font></div></td>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">38</font></div></td>
<td align="left" valign="bottom" width="25%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="45%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Settlements</font></div></td>
<td align="left" valign="center" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;(304</font></div></td>
<td align="left" valign="bottom" width="25%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></div></td></tr><tr>
<td align="left" valign="bottom" width="45%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Balance end of period</font></div></td>
<td align="left" valign="center" width="5%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font></td>
<td align="right" valign="bottom" width="5%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="top" width="7%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">686</font></div></td>
<td align="right" valign="top" width="5%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="8%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;646</font></div></td>
<td align="left" valign="bottom" width="25%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="bottom" width="45%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="center" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="25%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">
<br></font>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Statement of Cash Flows</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Cash equivalents include investments, which includes mutual funds, with maturities when purchased of three months or less.</font></div>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">21</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Income Taxes</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Income taxes are provided based on the liability method of accounting pursuant to SFAS 109, Accounting for Income Taxes.&#160; The provision for income taxes is based on pretax financial income (loss).&#160; Deferred tax assets and liabilities are recognized for the future expected tax consequences of temporary differences between income tax and financial
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Earnings per Share</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We follow the provisions of SFAS 128, Earnings Per Share.&#160;&#160;&#160;For 2007, no additional shares were added in the calculation of diluted earnings per share as they would be anti-dilutive.&#160;&#160;Diluted net income per share for 2008 was calculated using 308,000 additional shares relating to our restricted stock units.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Use of Estimates in the Preparation of Financial Statements</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during
the reporting period.&#160; Actual amounts could differ from those estimates.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Revenue Recognition</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We recognize revenue from coal sales at the time risk of loss passes to the customer at contracted amounts.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Long-term Contracts</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">As of December 31, 2008, we are committed to supply to four utilities about 15.3 million tons of coal during the next 4.5 years.&#160;&#160;These contracts represent about 1/3 of our recoverable reserves.&#160;&#160;During 2008, three of our utility customers accounted for 90% of our sales:&#160;&#160;one customer accounted for 43%, the second for 31%,
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Transportation</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Currently, we use both truck and rail transportation.&#160;&#160;Disruption of these services due to weather, mechanical issues, strikes, lockouts, bottlenecks and other events may have a temporary adverse impact on shipments and, consequently, to coal sales.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Stock Based Compensation</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS 123R, using the modified prospective transition method.</font></div>
<br>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">22</font></div>
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<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">New Accounting Pronouncements</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Other than SFAS 160, none of the recent FASB pronouncements had, or will have any material effect on us.&#160;&#160;In December 2007, the FASB issued SFAS No.&#160;160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No.&#160;51. This statement requires an entity to separately disclose non-controlling
interests as a separate component of equity in the balance sheet and clearly identify on the face of the income statement net income related to non-controlling interests. This statement is effective for financial statements issued for fiscal years beginning after December&#160;15, 2008. The adoption of this statement will change how we present our minority interest with Sunrise but will not have a material affect on our financial statements.</font></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Income Taxes (in thousands)</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our income tax is different than the expected amount computed using the applicable federal and state statutory income tax rates.&#160;&#160;The reasons for and effects of such differences are as follows:</font></div>
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<div>
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<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 14.1pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 14.1pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Expected amount after minority interest</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,021</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(821</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">State income taxes, net of federal benefit</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">573</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(70</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Change in valuation allowance</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,257</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">915</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(411</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(24</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,926</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">-</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br>&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The deferred tax assets and liabilities resulting from temporary differences between book and tax basis are comprised of the following at December 31:</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
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<div align="left">
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<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" colspan="2" valign="bottom" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></font></div></td>
<td align="left" nowrap valign="bottom" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Long-term deferred tax assets:</font></div></td>
<td valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" colspan="2" valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Federal NOL carry forwards</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">945</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,734</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">AMT credit carry forwards</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">690</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
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<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,291</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">219</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Investment in Savoy</font></div></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,153</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">567</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Other</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,061</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">313</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Valuation allowance</font></div></td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(1,257</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net long-term deferred tax assets</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,140</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,576</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Long-term deferred tax liabilities:</font></div></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Coal properties</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(7,840</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(2,576</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">)</font></td></tr><tr>
<td valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net deferred tax liability</font></div></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,700</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></td>
<td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">-</font></td>
<td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">At December 31, 2008, we have federal net operating loss carry forwards of about $2.5 million and expect to utilize them in 2009.&#160;&#160;We also have percentage depletion carry forwards of about $1 million which have no expiration date and AMT credit carry forwards of about $690,000.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">23</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have&#160;analyzed our filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these&#160;jurisdictions.&#160; We&#160;identified&#160;our federal tax return and&#160;our Indiana&#160;state tax return as &#8220;major&#8221; tax jurisdictions.&#160;&#160;None
of our tax returns have been examined in the last ten years. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to&#160;our consolidated financial position.&#160; Therefore,&#160;no reserves&#160;for uncertain income tax positions&#160;have been recorded.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(3)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Common Stock, Restricted Stock and Stock Options</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Common Stock</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">On July 21, 2008, we sold 5.5 million shares of our common stock for $22 million ($4 per share) in a private placement transaction to existing shareholders.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Restricted Stock - 2008</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Effective April 8, 2008, the Board approved the Hallador Petroleum Company 2008 Restricted Stock Unit Plan.&#160;&#160;On July 7, 2008 the plan was amended to increase the authorized issuance of restricted stock units (RSUs) from 450,000 units to 1,350,000 units.&#160; Vesting occurs at the end of three years of employment.&#160;&#160;Upon vesting,
each RSU entitles the recipient to receive one share of common stock.&#160;&#160;If the RSU recipient&#8217;s employment with us or Sunrise ceases for any reason prior to vesting, the RSUs will be cancelled and the recipient will no longer have any right to receive any shares of common stock. Due to employee resignations during the year, 15,000 RSUs were forfeited back to the plan.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">On May 6, 2008, we awarded to certain Sunrise employees and owners a total of 185,000 RSUs which vest on April 1, 2011. The RSUs were valued at $4.25 per share based on the closing price on that date.&#160;&#160;On May 14, 2008, we accelerated vesting on 50,000 shares and recognized an expense of about $212,000.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">On July 7, 2008, we awarded to certain of our and Sunrise's key employees 820,000 RSUs, all of which vest on July 7, 2011.&#160;&#160;Of the 820,000 RSUs awarded, Victor P. Stabio, our CEO received 450,000 units and Brent Bilsland, Sunrise's President, received 300,000 units.&#160;&#160;These RSUs were valued at $3.55 per share based on the closing
price on that date.&#160;&#160;During October 2008, we accelerated vesting on 815,000 RSUs, of which 450,000 were issued to Victor Stabio and 300,000 were issued to Brent Bilsland, and the remaining 65,000 were issued to others.&#160;&#160;Our stock was selling in the $2.75 to $2.85 range on the dates of acceleration.&#160;&#160;&#160;During the fourth quarter 2008, we recognized an expense of about $2.9 million for these RSUs.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Total amortization expense during 2008 was about $420,000 relating to our RSUs.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">As of December 31, 2008, we have 360,000 RSUs available for future issuance and there are 170,000 RSUs outstanding which have not vested and have a value of $510,000 based on a year end closing price of $3 per share.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">During 2008, of the 865,000 shares issued pursuant to the plan, 281,500 shares were relinquished back to the Company as consideration for the income taxes due by the individuals in the amount of $815,000.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Restricted Stock - 2007</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">On June 20, 2007, our Board authorized and granted the issuance of 600,000 shares of restricted stock.&#160;&#160;Victor Stabio, our CEO, received 390,000 shares, Brent Bilsland, Sunrise&#8217;s President, received 165,000 shares and two consultants received 45,000 shares.&#160;&#160;The Board accelerated vesting on Mr. Stabio's and Mr. Bilsland's shares
on July 9, 2007 and August 9, 2007, respectively.&#160;&#160;&#160;These shares were valued at $3.25.&#160;&#160;During 2007, we took a charge of about $1.8 million for these vested shares.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Of the 390,000 shares granted to Mr. Stabio, 125,000 shares were relinquished back to the Company as consideration for the income taxes due of $356,000.&#160;&#160;Mr. Stabio also exercised 200,000 of his 400,000 options at an exercise price of $2.30 per share.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Stock Options</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In April 2005, we granted 750,000 options at an exercise price of $2.30.&#160;&#160;These options fully vested in April 2008 and expire in April 2015.&#160;&#160;On July 9, 2007 Mr. Stabio, our CEO, exercised 200,000 options.&#160;&#160;No options were granted during 2008 and 2007.&#160;&#160;At December 31, 2008, we had 550,000 outstanding stock options;
such options had an aggregate intrinsic value of about $385,000.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We estimated the fair value of the option grant using the Black-Scholes option-pricing model, with the following assumptions: (i) risk free interest rate of 4.24%; (ii) expected life of 10 years; (iii) expected volatility of 120%; and (iv) expected default rate of 5%, and (v) no dividend yield.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The compensation expense related to the options was $120,000 for 2008 and $478,000 for 2007. The impact on earnings per share was not material for 2008 and was $.04 for 2007.&#160;&#160;There will be no future compensation expense relating to these options.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(4)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Sunrise Coal Acquisition</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Through a series of transactions which began in 2006 and ended in July 2008, we now own an 80% interest in Sunrise Coal, LLC (Sunrise).&#160;&#160;On July 31, 2006, we entered into a partnership with Sunrise to develop the Carlisle mine.&#160;&#160;Sunrise contributed all of their assets for a 40% interest and we agreed to a $20.5 million funding commitment
(which we fulfilled during 2007) and guaranteed Sunrise's bank debt for a 60% interest.&#160;&#160;Our funding commitment was subsequently increased to $21.2 million and was fulfilled.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In July 2008 we purchased an additional 20% interest in Sunrise for about $12 million and such amount was allocated to mine development costs.&#160;&#160;Through approximately 92% of the partnership's cash flow we are to receive $22.9 million (our funding commitment of $21.2 million plus $1.7 million of acquired basis attributable to the interests sold
by certain Sunrise members) plus interest at 10%.&#160;&#160;&#160;Thereafter, cash flow will be distributed 80% to us and 20% to the remaining original Sunrise members.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Prior to the purchase of the additional 20% interest, we consolidated 100% of the Sunrise operations with a 13% minority interest.&#160;&#160;Subsequent to the purchase, we are now using an 8% minority interest.&#160;&#160;Once we receive our $22.9 million plus interest at 10%, the minority interest will change to 20%.&#160;&#160;</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(5)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Notes Payable</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In December 2008, we entered into a new loan agreement with a bank consortium that provides for a $40 million term loan and a $30 million revolving credit facility.&#160;&#160;At December 31, 2008, we have fully drawn down the $40 million term loan.&#160;&#160;We have outstanding letters of credit in the amount of $3 million, which leaves $27 million
available under the revolver.&#160;&#160;Substantially all of Sunrise's assets were pledged under this loan agreement and we are the guarantor.&#160;&#160;&#160;Debt maturities are as follows:&#160;&#160;2009 - $2.5 million: 2010 - $10 million: 2011 - $10 million: 2012 - $17.5 million.&#160;&#160;The loan agreement requires customary covenants, required financial ratios and restrictions on dividends or distributions.&#160;&#160;Closing costs on this loan agreement was about $1.2 million and are being amortized
using the effective interest method over its term.&#160;&#160;The current interest rate is LIBOR (0.9%) plus 3.50% or 4.4%.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In connection with the old loan agreements, we entered into two interest rate swap agreements swapping variable rates for fixed rates. The first swap agreement covered $26 million in debt and commenced July 15, 2007 and matures on July 15, 2012. The second swap agreement covers $10 million and commenced December 28, 2007 and matures on December 28,
2011.&#160;&#160;The two swap agreements fix our interest rate at about 8.3%. At December 31, 2008 and 2007, we recorded the estimated fair value of the two swaps as a $2.29 million and $1.18 million liability, respectively.&#160;&#160;The increase of $1.11 million was recorded as additional interest expense for 2008.&#160;&#160;Such amount in 2007 was about the same.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Accounting rules require us to recognize all derivatives on the balance sheet at estimated fair value. Derivatives that are not hedges must be adjusted to estimated fair value through earnings. We have no derivatives designated as a hedge.</font></div></div>
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<br>&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(6)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Equity Investment in Savoy</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">On December 31, 2005, we acquired a 32% interest in Savoy Energy L.P., a private company engaged in the oil and gas business primarily in the State of Michigan.&#160; A value of $6.1 million was assigned for this investment.&#160;&#160;&#160;On October 5, 2007, we invested an additional $6 million in Savoy which increased our ownership to 45%.&#160;&#160;We
account for our interest in Savoy using the equity method of accounting.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Below (in thousands) are:&#160;&#160; (i) a condensed balance sheet at December 31, for both years and (ii) a condensed statement of operations for the years ended December 31, 2008 and 2007.</font></div>
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<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Condensed Balance Sheet</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(unaudited)</font></div>
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<br></div>
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<tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="37%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="37%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Current assets</font></div></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10,639</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">14,600</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="37%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">PP&amp;E, net</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">12,021</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10,700</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="37%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">22,660</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">25,300</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="37%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="37%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Total liabilities</font></div></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">5,120</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3,900</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="37%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Partners' capital</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">17,540</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21,400</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="37%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">22,660</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">25,300</font></div></td>
<td valign="top" width="20%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">26</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div></div>
<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Condensed Statement of Operations</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(unaudited)</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<div align="center">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="39%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></div></td>
<td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="39%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Revenue</font></div></td>
<td align="left" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 11.2pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">8,340</font></div></td>
<td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="11%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">6,220</font></div></td>
<td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="39%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Expenses</font></div></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 5.1pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(12,747)</font></div></td>
<td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(5,270)</font></div></td>
<td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="39%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Net income (loss)</font></div></td>
<td align="left" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 5.1pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">(4,407)</font></div></td>
<td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 3.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">950</font></div></td>
<td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="39%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The $2.3 million equity loss from Savoy resulted primarily from Savoy taking a $2.6 million impairment charge relating to their oil and gas properties.&#160;&#160;&#160;Furthermore, the difference between the purchase price and our pro rata share of Savoy's partners' capital&#160;&#160;was amortized based on Savoy's units-of-production rate and amounted
to about $333,000 for 2008 and $279,000 for 2007.&#160;&#160;In addition, due to deteriorating industry conditions, we took a $1.4 million impairment charge relating to our investment in Savoy.&#160;&#160;We concluded that Savoy's balance sheet, considering their impairments, reflected our best estimate of Savoy's fair value.&#160;&#160;Accordingly, we compared our investment account in Savoy to 45% of Savoy's equity accounts and the excess amounted to about $1.4 million.&#160;&#160;Consequently, we impaired
our investment account by such amount.&#160;&#160;Considering this impairment charge, we no longer have a difference between the purchase price and our pro rata share of Savoy's partners' capital.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-STYLE: italic; FONT-FAMILY: Arial">Unaudited</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our 45% equity interest in Savoy's proved developed oil and gas reserves at December 31, 2008 were 58,000 barrels and 644,000 mcf, respectively.&#160;&#160;&#160;Our equity interest in Savoy's standardized measure of discounted future net cash flows at December 31, 2008 was about $2.5 million.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(7)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Sale of Oil and Gas Properties</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In early July 2007 we sold our interest in the San Juan properties for $2.3 million.&#160;&#160;We recognized a gain of about $1.7 million.&#160;&#160;Other sales during 2007 resulted in gains of about $200,000.&#160;&#160;In October 2008, we sold unproved properties for about $2 million and recognized a gain of about $1.4 million.&#160;&#160;Other
sales during 2008 resulted in gains of about $400,000.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(8)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Employee Benefits</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have no defined benefit&#160;pension plans or any post-retirement benefit plans. &#160;Our mine employees participate in a 401(k) Plan, where we match 100% of the first 3% that an employee contributes, and a Deferred Bonus Plan based on meeting certain production levels.&#160; We also offer health benefits to all employees.&#160; Our costs for the
401(k) matching were about $190,000 and our costs for health benefits were about $822,000.&#160; The costs for the Deferred Bonus Plan, which was implemented in December 2008, were not material.&#160; Our mine employees are also covered by workers compensation and such costs for 2008 were about $1.7 million.</font></div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">27</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160; </font></div></div></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">(9)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Fair Value Measurements</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We adopted SFAS No.&#160;157, &#8220;Fair Value Measurements,&#8221; effective January&#160;1, 2008 for financial assets and liabilities measured on a recurring basis. SFAS No.&#160;157 applies to all financial assets and liabilities that are being measured and reported on a fair value basis.&#160;&#160;As defined in SFAS No. 157, fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS No.&#160;157 requires disclosure that establishes a framework for measuring fair value, and expands disclosure about fair value measurements.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The statement requires fair value measurements be classified and disclosed in one of the following categories:</font></div>
<div>
<div align="left">
<div align="left">
<div align="left">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="78%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Level 1:</font></font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="78%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.&#160;&#160;We have no Level 1 instruments.</font></div></td></tr><tr>
<td align="left" valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="78%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Level 2:</font></font></div></td>
<td align="left" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="78%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.&#160;&#160;We have no Level 2 instruments.</font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Level 3:</font></font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity). Our Level 3 instruments&#160;are comprised of interest rate swaps.&#160; Although we utilize third party broker quotes to assess the reasonableness
of our prices and valuation, we do not have sufficient corroborating market evidence to support classifying these liabilities as Level 2.</font></div></td></tr></table></div></div></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">At December 31, 2007, our interest rates swaps were a liability of $1.2 million and at December 31, 2008 they were a liability of $2.3 million.&#160;&#160;The difference of $1.1 million is included in interest expense.&#160;&#160;The recorded value of our bank debt approximates fair value as it bears interest at a floating rate.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ITEM 9.&#160;&#160; CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Not applicable<font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 9A(T).&#160;&#160;CONTROLS AND PROCEDURES.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Disclosure Controls</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We maintain a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our CEO as
appropriate to allow timely decisions regarding required disclosure.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO of the effectiveness of the design and operation of our disclosure controls and procedures.&#160; Based upon that evaluation, our CEO, who is also our CFO, concluded that our disclosure controls and procedures
are effective for the purposes discussed above.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Internal Control Over Financial Reporting (ICFR)</font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We are responsible for establishing and maintaining adequate ICFR.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We assessed the effectiveness of our ICFR based on criteria for effective ICFR described in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Based on our assessment, we concluded that we maintained effective ICFR as of December 31, 2008.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">There has been no change in our internal control over financial reporting during the quarter ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Effective January 1, 2008 Victor P. Stabio's,&#160;our CEO,&#160;annual salary was increased from about $140,000 to $180,000 per year.&#160;&#160;&#160;Brent Bilsland's, Sunrise's President, salary was increased from $90,000 to $130,000 effective November 1, 2008 and Larry Martin's, Sunrise's CFO, salary was increased from $100,000 to $103,000 effective
April 1, 2008.&#160;&#160;We have no written employment agreements with any of our officers.&#160;&#160;Bonuses, if any, are paid on a discretionary basis.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In February 2009 in connection with a verbal relocation plan, we purchased from Mr. Martin his personal residence, which is about 50 miles from the offices, for about $185,000.&#160;&#160;Mr. Martin will continue to live in the house for three months awaiting the completion of his new residence near the Terre Haute offices.&#160;&#160;We plan to sell
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<div align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">PART III</font></div></td></tr></table></div></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ITEM 10.&#160;&#160; DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.</font></div></td></tr></table></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">DAVID HARDIE, 58, is the Chairman of the Board and has served as a director since July 1989.&#160; He is the President of Hallador Investment Advisors Inc., which manages Hallador Equity Fund, Hallador Fixed Income Fund, Hallador Alternative Assets Fund and Hallador Balance Fund; he also is a General Partner of Hallador Venture Partners LLC, the General
Partner of Hallador Venture Fund II &amp; III.&#160; Mr. Hardie is and serves as a director and partner of other private entities that are owned by members of his family and is also a director of Sunrise Coal, LLC. Mr. Hardie is a graduate of California Polytechnic University, San Luis Obispo.&#160;&#160;He also attended the Owner/President Management program offered by Harvard Business School.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">STEVEN HARDIE, 55, has been a director since 1994.&#160;&#160;He and David Hardie are brothers.&#160;&#160;For the last 24 years he has been a private investor.&#160; He is the Vice- President of Hallador Investment Advisors, which manages Hallador Equity Fund, Hallador Fixed Income&#160;Fund, Hallador Alternative Assets Fund and Hallador Balance Fund.
He also serves as a director and partner of other private entities that are owned by members of his family.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">BRYAN H. LAWRENCE, 66, has been one of our directors since November 1995.&#160; He is a founder and senior manager of Yorktown Partners LLC which manages investment partnerships formerly affiliated with Dillon, Read &amp; Co. Inc., an investment-banking firm (Dillon, Read).&#160; He had been employed with Dillon, Read since 1966, serving most recently
as a Managing Director until the merger of Dillon, Read with SBC Warburg in September 1997.&#160; He also serves as a Director of Approach Resources, Inc.,&#160;&#160;Star Gas Partners, L.P., Crosstex Energy, Inc. and Crosstex Energy, L.P. (each a United States public company), Winstar Resources Ltd. (a Canadian Public Company) and certain non-public companies in the energy industry in which Yorktown partnership holds equity interests, one of which is Sunrise Coal, LLC.&#160;&#160;Mr. Lawrence is a graduate of
Hamilton College and has a MBA from Columbia University.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">SHELDON B. LUBAR, age&#160;79,&#160;was appointed to our board in July 2008.&#160; Mr. Lubar has been Chairman of the Board of Lubar &amp; Co. Incorporated, a private investment and management firm he founded, since 1977.&#160; Mr. Lubar also serves on the board of&#160;Approach Resources, Inc., Crosstex Energy, Inc., Star Gas Partners L.P. and Ellora
Energy, Inc.&#160; Mr. Lubar holds a bachelor's degree in business administration and a law degree from the University of Wisconsin-Madison. He was awarded an honorary doctor of commercial science degree from the University of Wisconsin-Milwaukee.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">VICTOR P. STABIO, 61, is our President, CEO, CFO and a director.&#160; He joined us in March 1991 as our President and CEO and has been active in the oil and gas business for the past 32 years. Mr. Stabio is a director of Sunrise Coal, LLC and also a director of Savoy Exploration, the general partner of Savoy Energy, LP.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">BRENT K. BILSLAND, 35, has been President and a director of Sunrise Coal, LLC since July 31, 2006. &#160; Previously, Mr. Bilsland was Vice President of Knapper Corporation, a family owned farming business from 1998 to 2004.&#160;&#160;Mr. Bilsland is a graduate of Butler University located in Indianapolis, Indiana.&#160;&#160;Mr. Bilsland is a 4% owner
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">LARRY MARTIN, 43, was appointed Chief Financial Officer of Sunrise Coal, LLC on January 29, 2008.&#160;&#160;Prior to his employment with Sunrise in October 2008, he worked 19 years for Clifton Gunderson (12th largest U.S. Public Accounting Firm) from January 1989 to October 2008.&#160;&#160;Mr. Martin was a Senior Manager in Tax for the previous 6
years and an Audit Senior Manager for the 5 preceding years.&#160;&#160;&#160;Mr. Martin is a graduate from Indiana State University and has his Bachelor of Science in Accounting.&#160;&#160;He received his C.P.A in 1991.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial; TEXT-DECORATION: underline">Section 16(a) Beneficial Ownership Reporting Compliance</font></font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">All of our directors and officers filed their Section 16 forms within the appropriate deadlines.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our Code of Ethics is filed as Exhibit 14 to this Form 10-K. &#160;</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our audit committee oversees our financial reporting process on behalf of the board of directors. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In fulfilling its oversight responsibilities, the audit committee reviewed and discussed with management the audited financial statements contained in this Form&#160;10-K.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our independent registered public accounting firm, EKS&amp;H, is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America. The audit committee reviewed with EKS&amp;H the firm's judgment as to the quality, not just the acceptability, of
our accounting principles and such other matters as are required to be discussed with the audit committee under generally accepted auditing standards.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The audit committee discussed with EKS&amp;H the matters required to be discussed by SAS 61 (Codification of Statement on Auditing Standards, AU &#167;&#160;380), as may be modified or supplemented. The committee received written disclosures and the letter from EKS&amp;H required by applicable requirements of the Public Company Accounting Oversight
Board regarding EKS&amp;H&#8217;s communications with the audit committee concerning independence, and has discussed with EKS&amp;H its independence.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Based on the reviews and discussions referred to above, the audit committee recommended to the board of directors that the audited financial statements be included in the Form&#160;10-K for the year ended December&#160;31, 2008 for filing with the SEC.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">David Hardie, Steven Hardie, Bryan Lawrence, Sheldon Lubar</font></div>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">31</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 11.&#160;&#160;EXECUTIVE COMPENSATION</font></div>
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<table cellpadding="0" cellspacing="0" width="99%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="28%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Name and Principal Position</font></div></div></td>
<td valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Year</font></div></div></td>
<td valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Salary</font></div></div></td>
<td valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Bonus</font></div></div></td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">Stock
Awards<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></font></font></font></font></div></div></td>
<td valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">Option
Awards<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></font></font></font></font></div></div></td>
<td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">All&#160;&#160;Other</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">Compensation<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></font></font></font></font></font></font></div></div></td>
<td valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Total</font></div></td></tr><tr>
<td valign="bottom" width="28%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td valign="top" width="28%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Victor P. Stabio, CEO</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div></div></td>
<td valign="top" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">2008</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">2007</font></div></div></td>
<td valign="top" width="8%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">$180,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;144,000</font></div></div></td>
<td valign="top" width="8%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">$90,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;36,000</font></div></div></td>
<td valign="top" width="11%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">$1,730,000&#160;&#160;&#160;&#160;&#160; </font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;1,217,000&#160;&#160;&#160;&#160;&#160; </font></div></div></td>
<td valign="top" width="13%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">$&#160;&#160;64,000&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;255,000&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></div></div></td>
<td valign="top" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="10%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">$2,064,000 &#160; </font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;1,652,000&#160;&#160; </font></div></td></tr><tr>
<td valign="top" width="28%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Brent Bilsland, President - Sunrise</font></div></div></td>
<td valign="top" width="10%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">2008</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">2007</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div></div></td>
<td valign="top" width="8%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">96,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">90,000</font></div></div></td>
<td valign="top" width="8%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">34,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">15,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div></div></td>
<td valign="top" width="11%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;1,154,000&#160;&#160;&#160;&#160;&#160; </font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;536,000&#160;&#160;&#160;&#160;&#160; </font></div></div></td>
<td valign="top" width="13%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">$3,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; 3,000</font></div></div></td>
<td align="left" valign="top" width="10%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 4.8pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;1,287,000</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 4.8pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;644,000</font></div></td></tr><tr>
<td valign="top" width="28%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">Larry
Martin<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (3)</font></font></font></font></font></font></font></font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">CFO - Sunrise</font></div></div></td>
<td valign="top" width="10%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">2008</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">2007</font></div></div></td>
<td valign="top" width="8%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">102,000</font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;17,000</font></div></div></td>
<td valign="top" width="8%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">10,000</font></div></div></td>
<td valign="top" width="11%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;&#160;63,000&#160;&#160;&#160;&#160;&#160; </font></div></div></td>
<td valign="top" width="13%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160; 3,000</font></div></div></td>
<td align="right" valign="top" width="10%" style="TEXT-ALIGN: right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 4.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">178,000</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 4.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">&#160;&#160;17,000</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">-------------------------------------------------------------</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: left">
<br>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td style="WIDTH: 18pt">
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(<font style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">1)</font></font></font></div></td>
<td>
<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">Represents the amount we recognized as an expense in our financial statements. Mr. Stabio and Mr. Bilsland each were granted restricted stock units in the summer of 2007, and soon thereafter, vesting was accelerated.&#160;&#160;During the summer of 2008, Messrs. Stabio, Bilsland and Martin were granted restricted stock units, and about three months later, vesting was accelerated.</font></div></td></tr></table></div>
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<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></font></font></font></div></td>
<td width="1213">
<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">Represents company contributions to the 401(k) plan.</font></div></td></tr></table></div>
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<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></font></font></font></font></div></td>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">Mr. Martin began employment in October 2007.</font></div></td></tr></table></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In April 2005, we granted 750,000 options at an exercise price of $2.30 per share to our employees of which 400,000 were issued to Mr. Stabio.&#160; On July 9, 2007 Mr. Stabio exercised 200,000 options at an exercise price of $2.30.&#160;&#160;&#160;No options were granted or exercised in 2008.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">At December 31, 2008, Mr. Stabio's in-the-money value of his exercisable options (200,000) was about $140,000 and expire on April 15, 2015.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">None of these three officers have any outstanding restricted stock units.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Effective January 1, 2008 Mr. Stabio's annual salary was increased from about $140,000 to $180,000 per year.&#160;&#160;&#160;Mr.&#160;Bilsland's salary was increased from $90,000 to $130,000 effective November&#160;1, 2008 and Mr.&#160;Martin's salary was increased from $100,000 to $103,000 effective April 1, 2008.&#160;&#160;We have no written employment
agreements with any of our officers.&#160;&#160;Bonuses, if any, are paid on a discretionary basis.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In February 2009 in connection with a verbal relocation plan, we purchased from Mr. Martin his personal residence, which is about 50 miles from the offices, for about $185,000.&#160;&#160;Mr. Martin will continue to live in the house for three months awaiting the completion of his new residence near the Terre Haute offices.&#160;&#160;We plan to sell
the house this summer.</font></div>
<br>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">32</font></div>
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<hr style="COLOR: black" noshade size="2"></div></div>
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<br>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial; TEXT-DECORATION: underline">Compensation of Directors</font></font></font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our directors receive no compensation for their services.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ITEM 12.&#160;&#160; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT </font></div>
<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; AND RELATED STOCKHOLDER MATTERS.</font></div></td></tr></table></div></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">This table shows the number and percentage of common shares owned for each shareholder known by us to beneficially own 5% or more of our stock as of March 24, 2009.</font></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">Name</font></div></td>
<td valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">No. Shares </font></font></font></div></td>
<td valign="top" width="7%">&#160;</td>
<td valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial; TEXT-DECORATION: underline"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">% of Class </font></font></font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></font></div></td>
<td valign="top" width="18%">&#160;</td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Hardie Family Shares <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,572,957</font></div></td>
<td align="right" valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">20.37</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3000 S. Street, Suite 200</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Sacramento, CA 95816</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Yorktown Energy Partners<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></font></font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">12,257,256</font></div></td>
<td align="right" valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">54.60</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">410 Park Avenue, 19<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> Floor</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">New York, NY 10022&#160;&#160;</font></div></td>
<td align="right" valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Lubar &amp; Associates</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">700 North Water Street</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Suite 1200</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Milwaukee, WI 53202</font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,038,685</font></div></td>
<td align="right" valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">9.08</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div>
<div>
<div align="center">&#160;</div></div>
<div>
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<div align="left">--------------------------------</div>
<div align="left">&#160;</div></td></tr></table></div>
<div>
<div align="right">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
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<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline;
 FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></div></td>
<td align="left" valign="top" width="98%" style="TEXT-ALIGN: left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">The percentages of ownership are calculated based on a total of 22,446,028 common shares outstanding.</font></div></td></tr><tr>
<td align="right" valign="top" width="2%" style="TEXT-ALIGN: left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline;
 FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></div></td>
<td align="left" valign="top" width="98%" style="TEXT-ALIGN: left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Includes 3,426,601 shares owned by Hallador Alternative Assets Fund, 823,041 shares owned by Robert C. Hardie L.P., 298,315 shares owned by Hallador, Inc. and 25,000 shares owned by Sandra Hardie (Steven Hardie's wife.)</font></div></div></td></tr><tr>
<td align="right" valign="top" width="2%" style="TEXT-ALIGN: left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline;
 FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></div></td>
<td align="left" valign="top" width="98%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">Includes 6,557,166 shares owned by <font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">Yorktown Energy Partners, VI L.P. and</font> 5,700,090 shares owned by Yorktown Energy Partners, VII L.P.</font></td></tr></table></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<br>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">33</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">This table shows the number and percentage of common shares beneficially owned by each of our directors and officers and by group at March 24, 2009.&#160;&#160;&#160; Beneficial ownership of certain shares has been, or is being, specifically disclaimed by certain directors in ownership reports filed with the SEC.</font></div>
<div>
<div style="TEXT-ALIGN: left" align="center">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<div align="center">
<div align="center">
<div align="center">
<div align="center">
<div align="center">
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">Name</font></div></td>
<td valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">No. Shares</font></div></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">% of Class <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">David Hardie and Steven Hardie<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4,572,957</font></div></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">20.37</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Bryan H. Lawrence<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">12,307,256</font></div></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">54.83</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Sheldon Lubar<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (4)</font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2,038,685</font></div></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">9.08</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Victor P. Stabio<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(5)</font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">1,033,413</font></div></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">4.56</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Brent K. Bilsland <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(6)</font></font></div></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;365,000</font></div></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;1.63</font></div></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%" style="PADDING-BOTTOM: 2px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Larry Martin</font></div></td>
<td align="right" valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline">&#160;&#160;&#160;&#160;&#160;&#160;29,000</font></font></div></td>
<td valign="top" width="7%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline">&#160;&#160;0.13</font></font></div></td>
<td align="right" valign="top" width="18%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="51%" style="PADDING-BOTTOM: 4px">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">All directors and executive officers as a group</font></div></td>
<td align="right" valign="top" width="12%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline">20,346,311</font></font></div></td>
<td valign="top" width="7%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="12%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline">&#160;&#160;&#160;90.60</font></font></div></td>
<td align="right" valign="top" width="18%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td></tr></table></div></div></div></div></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br>---------------------------------------------------</div></div>
<div style="TEXT-ALIGN: left" align="center">&#160;</div>
<div style="TEXT-ALIGN: left" align="center">&#160;</div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<div>
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></font></div></td>
<td align="left" valign="top" width="98%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">The percentages of ownership are calculated based on a total of 22,446,028 common shares outstanding.</font></div></td></tr><tr>
<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></font></font></font></font></font></font></font></div></td>
<td align="left" valign="top" width="98%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Includes 3,426,601 shares owned by Hallador Alternative Assets Fund, 823,041 shares owned by Robert C. Hardie L.P., 298,315 shares owned by Hallador, Inc. and 25,000 shares owned by Sandra Hardie (Steven Hardie's wife.)</font></div></td></tr><tr>
<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></font></font></font></font></font></font></font></font></div></td>
<td align="left" valign="top" width="98%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Mr. Lawrence&#8217;s address is 410 Park Avenue, 19<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> Floor, New York, NY 10022.&#160; Mr. Lawrence owns 50,000 shares directly.&#160;&#160;The remainder is held by Yorktown Energy Partners VI, L.P., and Yorktown Energy Partners VII, L.P., both affiliated with Mr. Lawrence.</font></div></td></tr><tr>
<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">&#160;(4)</font></font></font></font></font></font></font></font></font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Includes shares owned by Lubar &amp; Associates.</font></div></td></tr><tr>
<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(5)</font></font></font></font></font></font></font></font></font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">Includes 781,193 shares held in trust and 200,000 options exercisable within 60 days.&#160;&#160;It also includes 52,220 shares owned by his family members, over which he has no voting or dispositive power and as to which he disclaims beneficial ownership.</font></div></td></tr><tr>
<td align="right" valign="top" width="2%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(6)</font></font></font></font></font></font></font></font></font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 10pt; FONT-FAMILY: arial">In
addition to Mr. Bilsland's ownership in us, he and other family members own an aggregate 12% interest in Sunrise Coal, LLC<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: arial">.</font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></div></td></tr></table></div></div>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">34</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: arial">ITEM 13.&#160;&#160; CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.</font></div></td></tr></table></div></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our Audit Committee consists of all board members other than Mr. Stabio.&#160;&#160;Our Compensation Committee consists of Messrs. David and Steven Hardie and Mr. Lawrence.&#160;&#160;We have no nominating committee.&#160;&#160;None of our committees have charters.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We do not have an audit committee financial expert serving on our audit committee.&#160; We believe that the additional costs to recruit a financial expert exceed the benefits, if any.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We had four board meetings and four audit committee meetings during 2008 and all members attended at least 75% of the meetings.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">We have entered into significant equity transactions with Yorktown and other entities that invest with Yorktown.&#160; Yorktown, our largest shareholder, owns about 55% of our common stock and represents one of the five seats on our board.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 14.&#160;&#160; PRINCIPAL ACCOUNTANT FEES AND SERVICES.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">The fees incurred for 2008 and 2007 were:</font></div>
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<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="top" width="39%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2008</font></div></td>
<td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">2007</font></div></td>
<td align="left" valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160;</font></td>
<td align="left" valign="top" width="39%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="11%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
<td align="left" valign="top" width="39%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Audit Fees</font></font></font></div></td>
<td align="left" valign="top" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="top" width="10%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">141,500</font></div></td>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="top" width="11%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">150,500</font></div></td>
<td align="left" valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
<td align="left" valign="top" width="39%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Tax fees</font></font></font></div></td>
<td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="right" valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">51,000</font></div></td>
<td align="left" valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
<td align="left" valign="top" width="39%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Total fees</font></font></font></div></td>
<td align="left" valign="top" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">141,500</font></div></td>
<td align="left" valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td align="left" valign="top" width="3%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">$</font></div></td>
<td align="right" valign="top" width="11%" style="BORDER-BOTTOM: black 4px double">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">201,500</font></div></td>
<td align="left" valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial; TEXT-DECORATION: underline">Pre-approval Policy</font></font></font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">In 2003 the Audit Committee adopted a formal policy concerning approval of audit and non-audit services to be provided by Ehrhardt Keefe Steiner &amp; Hottman PC (EKSH).&#160; The policy requires that all services EKSH provides to us be pre-approved by the Committee.&#160; The Committee approved all services provided by EKSH during 2008 and 2007.</font></div>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">35</font></div>
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<br>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">PART IV</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Arial">ITEM 15.&#160;&#160;&#160;EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">See Item 8. for an index of our financial statements.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Because we are a smaller reporting company we are not required to provide financial statement schedules.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial">Our exhibit index is as follows:</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div>
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.1</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Restated Articles of Incorporation of Kimbark Oil and Gas Company, effective September 24, 1987&#160; <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.2</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Articles of Amendment to Restated Articles of Incorporation of Kimbark Oil &amp; Gas Company, effective December 14, 1989, to effect change of name to Hallador Petroleum Company and to change the par value and number of authorized
shares of common stock <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.3</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Amendment to Articles of Incorporation dated December 31, 1990 to effect the one-for-ten reverse stock split <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">3.4</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">By-laws of Hallador Petroleum Company, effective November 9, 1993 <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.1</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Purchase and Sale Agreement dated December 31, 2005 between Hallador Petroleum Company, as Purchase and Yorktown Energy Partners II, L.P., as Seller relating to the purchase and sale of limited partnership interests in Savoy
Energy Limited Partnership<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (5)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.2</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Letter of Intent dated January 5, 2006 between Hallador Petroleum Company and Sunrise Coal, LLC<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (6)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.3</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Subscription Agreement - by and between Hallador Petroleum Company and Yorktown Energy Partners VI, L.P., et al dated February 22, 2006.<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (5)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.4</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Subscription Agreements - by and between Hallador Petroleum Company and Hallador Alternative Assets Fund LLC, et al dated February 14, 2006.<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (6)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.5</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Continuing Guaranty, dated April 19, 2006, by Hallador Petroleum Company in favor of Old National Bank <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(9)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.6</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Collateral Assignment of Hallador Master Purchase/Sale Agreement, dated April 19, 2006, among Hallador Petroleum Company, Hallador Petroleum, LLLP, and Hallador Production Company and Old National Bank <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(9)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.7</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Reimbursement Agreement, dated April 19, 2006, between Hallador Petroleum Company and Sunrise Coal, LLC <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(9)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.8</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Membership Interest Purchase Agreement dated July 31, 2006 by and between Hallador Petroleum Company and Sunrise Coal, LLC. <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(10)</font></font></font></font></div></td></tr><tr>
<td valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.9</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Subscription Agreements - by and between Hallador Petroleum Company and Yorktown Energy Partners VII, L.P., et al dated October 5, 2007<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (10)</font></font></font></font></div></td></tr><tr>
<td align="left" valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.10</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Purchase and Sale Agreement dated effective as of October 5, 2007 between Hallador Petroleum Company, as Purchaser and Savoy Energy Limited Partnership, as Seller <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(12)</font></font></font></font></div></td></tr><tr>
<td align="left" valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.11</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">First Amendment to Credit Agreement, Waiver and Ratification of Loan Documents dated June 28, 2007 by and between Sunrise Coal, LLC, Hallador Petroleum Company and Old National Bank<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (12)</font></font></font></font></div></td></tr><tr>
<td align="left" valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.12</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Amended and Restated Continuing Guaranty, dated as of June 28, 2007, between Hallador Petroleum Company, Sunrise Coal, LLC, and Old National Bank. <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(13)</font></font></font></font></div></td></tr><tr>
<td align="left" valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.13</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Hallador Petroleum Company Restricted Stock Unit Issuance Agreement dated as of June 28, 2007, between Hallador Petroleum Company and Victor P. Stabio<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(13)*</font></font></font></font></div></td></tr><tr>
<td align="left" valign="top" width="6%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.14</font></div></td>
<td align="left" valign="top" width="94%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial">Hallador Petroleum Company Restricted Stock Unit Issuance Agreement dated as of July 19, 2007, between Hallador Petroleum Company and Brent Bilsland<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(14)*</font></font></font></font></div></td></tr></table>
<div>&#160;</div>
<div>
<div>&#160;</div>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<div id="FTR">
<div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div></div>
<div id="PN" style="PAGE-BREAK-AFTER: always">
<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">36</font></div>
<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div></div></div></div>
<div>&#160;</div>
<div>
<div>
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.15</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Hallador Petroleum Company 2008 Restricted Stock Unit Plan.<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(15)*</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.16</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Form of Amended and Restated Purchase and Sale Agreement dated July 24, 2008 to purchase additional minority interest from Sunrise Coal, LLC's minority members <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(16)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.17</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Form of Hallador Petroleum Company Restricted Stock Unit Issuance Agreement dated July 24, 2008<font style="DISPLAY: inline; FONT-FAMILY: arial">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(16)*</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.18</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Credit Agreement dated December&#160;12, 2008, by and among Sunrise Coal, LLC, Hallador Petroleum Company as a Guarantor, PNC Bank, National Association as administrative agent for the lenders, and the other lenders party thereto. <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(17)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.19</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Continuing Agreement of Guaranty and Suretyship dated December&#160;12, 2008, by Hallador Petroleum Company in favor of PNC Bank, National Association <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(17)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">10.20</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Amended and Restated Promissory Note dated December&#160;12, 2008, in the principal amount of $13,000,000, issued by Sunrise Coal, LLC in favor of Hallador Petroleum Company <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(17)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">14</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Code Of Ethics For Senior Financial Officers. <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(8)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">21.1</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">List of Subsidiaries<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> (2)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">23.1</font></td>
<td align="left" valign="top" width="79%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">Consent from EKSH <font size="2" style="FONT-SIZE: 12pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(18)</font></font></font></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">31.1</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">SOX 302 Certification - CEO <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(18)</font></font></div></td></tr><tr>
<td align="left" valign="top" width="8%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">31.2</font></div></font></td>
<td align="left" valign="top" width="79%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">SOX 302 Certification - CFO<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">&#160; (18)</font></font></font></td></tr><tr>
<td align="left" valign="top" width="8%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">32</font></div></td>
<td align="left" valign="top" width="79%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">SOX 906 Certification - CEO and CFO<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(18)</font></font></div></td></tr></table></div></div>
<div>&#160;</div></div>
<div>
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<td>
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<div>
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<tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 8pt; FONT-FAMILY: arial">(</font><font style="FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 8pt; FONT-FAMILY: arial">1)</font>&#160;&#160;Incorporated by reference (IBR) to the 1989 Form 10-K.</font></font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(10) IBR to Form 8-K dated August 1, 2006.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(2)&#160; IBR to the 1990 Form 10-K.</font></div></td>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(11) IBR to Form 10-QSB dated September 30, 2007.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(3)&#160; IBR to the 1992 Form 10-KSB.</font></div></td>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(12) IBR to Form 10-QSB dated June 30, 2007.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(4)&#160; IBR to the 1993 Form 10-KSB.</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160;&#160;&#160; (13) IBR to Form 8-K dated July 2, 2007.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(5) &#160;IBR to Form 8-K dated January 3, 2006.</font></div></td>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(14) IBR to Form 10-KSB dated December 31, 2007.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(6)&#160;&#160;IBR to Form 8-K dated January 6, 2006.</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(15) IBR to March 31, 2007 Form 10-Q.</font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(7)&#160;&#160;IBR to Form 8-K dated February 27, 2006.</font></div></td>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(16) IBR to Form 8-K dated July 24, 2008.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(8)&#160;&#160;IBR to the 2005 Form 10-KSB.</font></div></td>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(17) IBR to Form 8-K dated December 12, 2008.</font></div></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(9)&#160;&#160;IBR to Form 8-K dated April 25, 2006</font></div></td>
<td align="left" valign="top" width="51%">
<div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">(18) Filed herewith</font></div></td></tr><tr>
<td valign="top" width="49%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">&#160; </font></td></tr><tr>
<td align="left" valign="top" width="49%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 12pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 8pt; FONT-FAMILY: arial"><font style="FONT-SIZE: 8pt; FONT-FAMILY: arial">* <font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial">Management
contracts or compensatory plans.</font></font></font></font></font></font></font></font></div></td>
<td valign="top" width="51%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: arial">&#160; </font></td></tr></table></div>
<br>
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<div id="FTR">
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<div id="PN" style="PAGE-BREAK-AFTER: always">
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<div style="WIDTH: 100%; TEXT-ALIGN: center">
<hr style="COLOR: black" noshade size="2"></div></div>
<div id="HDR">
<div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">&#160; </font></div></div></div>
<br>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<br>&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">SIGNATURE</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">&#160;</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">&#160;</font></div>
<div>
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="top" width="28%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td align="left" valign="top" width="102%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;<font style="FONT-WEIGHT: bold">HALLADOR PETROLEUM COMPANY</font></font></td></tr><tr>
<td align="left" valign="top" width="28%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td>
<td align="left" valign="top" width="102%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;</font></td></tr><tr>
<td align="left" valign="top" width="28%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">December 15, 2009</font></div></td>
<td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td align="left" valign="top" width="102%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic; TEXT-DECORATION: underline"><font style="DISPLAY: inline">/S/ W. ANDERSON BISHOP</font></font></div>
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<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Arial"><font size="2">38</font>&#160;&#160;</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font>
<div>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>2
<FILENAME>exhibit23.htm
<DESCRIPTION>CONSENT FROM EKSH
<TEXT>
<html>
<head>
    <title>exhibit23.htm</title>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">EXHIBIT 23.1</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right">&#160;</div></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No 333-163431) of Hallador Petroleum Company, of our report dated March 25, 2009, on the consolidated financial statements of Hallador Petroleum Company which appears in this Form 10-K/A for the year ended December 31, 2008.</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">&#160;</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic"><font style="FONT-STYLE: italic"><font size="2" style="FONT-SIZE: 11pt; FONT-STYLE: italic; FONT-FAMILY: arial">/S/</font>Ehrhardt Keefe Steiner &amp; Hottman PC</font></font></div></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">Ehrhardt Keefe Steiner &amp; Hottman PC</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">December 15, 2009</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Century Gothic">Denver, Colorado</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<br></body>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>exh31vps.htm
<DESCRIPTION>SOX 302 CERTIFICATION - VICTOR P. STABIO, CEO
<TEXT>
<html>
<head>
    <title>exh31vps.htm</title>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Exhibit&#160;31.1</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font style="FONT-SIZE: 12pt; FONT-FAMILY: Arial">CERTIFICATION</font></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">I,&#160;Victor P. Stabio,&#160;certify that:</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">1.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">I have reviewed this&#160;annual report on Form&#160;10-K/A of Hallador Petroleum Company;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">2.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">3.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">4.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">The registrant&#8217;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules&#160;13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules&#160;13a-15(f) and 15d-15(f)) for the registrant and have:</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">a)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">b)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">c)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">d)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">5.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">The registrant&#8217;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">a)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">b)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></div>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div></td></tr></table></div>
<div>
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="top" width="37%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td align="left" valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td align="left" valign="bottom" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic; TEXT-DECORATION: underline"><font style="DISPLAY: inline">/S/VICTOR P. STABIO</font></font></div></td></tr><tr>
<td align="left" valign="top" width="37%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;&#160;December 15, 2009</font></div></td>
<td align="left" valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td align="left" valign="top" width="52%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;Victor P. Stabio, CEO</font></div></td></tr></table></div>
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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>exh31wab.htm
<DESCRIPTION>SOX 302 CERTIFICATION - W. ANDERSON BISHOP, CFO
<TEXT>
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    <title>exh31wab.htm</title>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Exhibit&#160;31.2</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">CERTIFICATION </font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">I, W. Anderson Bishop, certify that:</font></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">1.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">I have reviewed this annual report on Form&#160;10-K/A of Hallador Petroleum Company;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">2.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">3.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">4.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">The registrant&#8217;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules&#160;13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules&#160;13a-15(f) and 15d-15(f)) for the registrant and have:</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">a)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">b)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">c)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">d)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 18pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">5.&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">The registrant&#8217;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br>&#160;</div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">a)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</font></div></td></tr></table></div>
<div style="DISPLAY: block; TEXT-INDENT: 0pt">
<br></div>
<div>
<table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
<td align="right" style="WIDTH: 36pt">
<div><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">b)&#160;&#160;</font></div></td>
<td>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></div>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div></td></tr></table></div>
<div>
<table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td align="left" valign="top" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160; </font></td>
<td align="left" valign="bottom" width="58%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-SIZE: 11pt; FONT-FAMILY: century gothic; TEXT-DECORATION: underline"><font style="FONT-SIZE: 11pt; FONT-FAMILY: century gothic">/<font style="FONT-SIZE: 11pt; FONT-FAMILY: century gothic">S/W. Anderson Bishop</font></font></font></div></td></tr><tr>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">&#160;&#160;December 15, 2009</font></div></td>
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<TYPE>EX-32
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<DESCRIPTION>SOX 906 CERTIFICATION
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 11pt; FONT-FAMILY: Century Gothic">CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: normal; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">In connection with the Annual Report of Hallador Petroleum Company (the "Company"), on Form 10-K/A for the period ended December 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and date indicated below, each hereby certifies pursuant to
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">(1)</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></div></td></tr></table></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">(2)</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></div></td></tr></table></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic">December 15, 2009</font></div></td>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: century gothic; TEXT-DECORATION: underline"><font style="DISPLAY: inline">/S/W. Anderson Bishop</font></font></div>
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