1 SCHEDULE 14C INFORMATION Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 Check the appropriate box: [ ] Preliminary Information Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) [X] Definitive Information Statement BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST - ------------------------------------------------------------------------------- (Name of Registrant as Specified in its Charter) Payment of Filing Fee (Check the appropriate box): [ ] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. 1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------ 2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------ 4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------ 5) Total fee paid: ------------------------------------------------------------------------ [X] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ------------------------------------------------------------------------ 2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------ 3) Filing Party: ------------------------------------------------------------------------ 4) Date Filed: ------------------------------------------------------------------------ 2 NOTICE OF MEETING OF UNITHOLDERS OF BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST TO BE HELD ON DECEMBER 28, 1998 To the Unitholders of BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST: Pursuant to Section 8.02 of the Trust Agreement of Burlington Resources Coal Seam Gas Royalty Trust, a Delaware business trust (the "Trust"), San Juan Partners, L.L.C. ("San Juan"), as a Unitholder owning of record more than ten percent in number of the outstanding units of beneficial interest ("Units") in the Trust, has called and hereby gives notice of a meeting of Unitholders of the Trust. The meeting will be held on December 28, 1998, at 11:00 a.m., local time, at NationsBank Center, 700 Louisiana Street, Suite 3100, Houston, Texas, for the following purposes: 1. To consider and vote upon the Termination Proposal (as defined in the accompanying Information Statement) which contemplates, among other things, the termination of the Trust; and 2. To transact such other business as may properly come before the meeting. Only Unitholders of record at the close of business on December 7, 1998 are entitled to notice of, and to exercise rights (including voting rights) at or in connection with, the meeting. Pursuant to the Trust Agreement of the Trust, no matter other than that stated in this notice will be acted upon at the meeting. SAN JUAN PARTNERS, L.L.C. By: O'Sullivan Oil & Gas Company, Inc., Manager By: /s/ C. N. O'Sullivan -------------------------------------------- Name: C. N. O'Sullivan Title: President Houston, Texas December 8, 1998 3 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST NATIONSBANK, N.A., TRUSTEE 901 MAIN STREET, SUITE 1700 DALLAS, TEXAS 75202 INFORMATION STATEMENT FOR MEETING OF UNITHOLDERS TO BE HELD ON DECEMBER 28, 1998 GENERAL This information statement is furnished to holders ("Unitholders") of units of beneficial interest ("Units") in Burlington Resources Coal Seam Gas Royalty Trust (the "Trust") in connection with a meeting (the "Meeting") of Unitholders of the Trust to be held on December 28, 1998, at 11 a.m., local time, at NationsBank Center, 700 Louisiana Street, Suite 3100, Houston, Texas, for the purpose of considering and voting upon the proposal of a Unitholder for the termination of the Trust and certain related matters as set forth in the accompanying Notice of Meeting of Unitholders. The approximate date on which this information statement is first being sent to Unitholders is December 8, 1998. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY OR WRITTEN CONSENT The Trust exists as a Delaware business trust under the Delaware Business Trust Act pursuant to the Trust Agreement of Burlington Resources Coal Seam Gas Royalty Trust (the "Trust Agreement") entered into effective as of May 1, 1993 by and among Burlington Resources Inc., a Delaware corporation ("Burlington Resources"), Burlington Resources Oil & Gas Company, a Delaware corporation ("BROG"), as grantor, and Mellon Bank (DE) National Association, a national banking association, and NationsBank, N.A., a national banking association (as successor to NationsBank of Texas, N.A., the "Trustee"), as trustees. The Trust owns certain net profits interests (the "Royalty Interests") in BROG's interest in the Fruitland coal formation underlying the Northeast Blanco Unit in the San Juan Basin of New Mexico (the "Underlying Properties"). The Royalty Interests are the only assets of the Trust, other than cash and temporary investments being held for the payment of expenses and liabilities and for distribution to Unitholders. The Meeting has been called and notice thereof given by San Juan Partners, L.L.C. ("San Juan") pursuant to the provisions of Section 8.02 of the Trust Agreement, for the purpose of considering and voting upon the Termination Proposal (as defined in Annex A hereto). The Termination Proposal is being submitted by San Juan to Unitholders for approval in accordance with the terms of that certain Purchase Agreement dated October 21, 1998 by and between BROG and San Juan (the "Purchase Agreement"). The Purchase Agreement provides that in connection with the termination of the Trust and the consummation of the transactions set forth in the Purchase Agreement, the following events shall occur: (i) the termination of that certain Gas Purchase Contract dated effective May 1, 1993 between Meridian Oil Trading Inc. and Meridian Oil Production Inc. (the "Gas Contract"), (ii) the amendment to that certain Gas Gathering, Dehydrating and Treating Agreement dated May 3, 1990 between Meridian Oil Gathering Inc. and Meridian Oil Trading Inc., as previously amended, (iii) the assignment to San Juan of all rights and obligations of BROG and Burlington Resources under the Trust Agreement and that certain Administrative Services Agreement dated effective May 1, 1993 between Burlington Resources and the Trust (the "Administrative Services Agreement"), and (iv) the termination of the obligations of Burlington Resources under the Trust Agreement and the Administrative Services Agreement (other than obligations which by their terms expressly survive termination) and the release of Burlington Resources from such obligations. The Termination Proposal includes not only the proposal to terminate the Trust pursuant to the Trust Agreement, but also the approval of each of the matters provided for in clauses (i) through (iv) above. A more complete description of the Termination Proposal and these matters is contained in Annex A, which accompanies this Information Statement and comprises a part hereof. 1 4 According to the provisions of the Trust Agreement, Unitholders owning of record not less than 10 percent in number of the then outstanding Units may call a meeting of Unitholders. According to Amendment No. 26 to the Schedule 13D filed with the Securities and Exchange Commission (the "Commission") on October 26, 1998 on behalf of San Juan and its affiliates ("San Juan's Amended Schedule 13D"), San Juan was the beneficial owner of 5,867,968 Units, constituting approximately 66.68% of the Units outstanding, at such date. SAN JUAN HAS INFORMED THE TRUSTEE THAT IT INTENDS TO VOTE ALL ITS UNITS IN FAVOR OF THE TERMINATION PROPOSAL. The Trustee knows of no matter other than as stated in the foregoing notice of meeting that is to be presented for consideration at the Meeting, and pursuant to the Trust Agreement, no matter other than that stated in the notice to Unitholders shall be acted upon at the Meeting. The mailing address of the principal executive offices of the Trust is NationsBank Plaza, 901 Main Street, Suite 1700, Dallas, Texas 75202. THIS INFORMATION STATEMENT SHOULD BE READ CAREFULLY AS IT CONTAINS IMPORTANT INFORMATION REGARDING THE EFFECTS AND POSSIBLE EFFECTS AND RISKS OF THE TERMINATION PROPOSAL AS DESCRIBED IN ANNEX A. 2 5 MEETING DATE AND VOTING SECURITIES DATE, TIME AND PLACE OF THE MEETING The Meeting will be held on December 28, 1998 at 11:00 a.m. at 700 Louisiana Street, Suite 3100, Houston, Texas. UNITS OUTSTANDING AND VOTING RIGHTS Pursuant to the Trust Agreement, the close of business on December 7, 1998 (the "Record Date") has been selected by the Trustee as the record date for determination of Unitholders entitled to notice of and to vote at the Meeting ("Record Date Unitholders"). The only securities of the Trust outstanding are the Units. Each Record Date Unitholder shall be entitled to one vote for each Unit owned by such Record Date Unitholder on the Record Date. On the Record Date, there were 8,800,000 Units outstanding and entitled to be voted. VOTING PROCEDURES The Trustee will appoint one or more inspectors of election to act at the Meeting and to make a written report thereof. Prior to the Meeting, the inspectors will sign an oath to perform their duties in an impartial manner and according to the best of their ability. The inspectors will ascertain the number of Units outstanding, determine the Units represented at the Meeting, count all votes and ballots, and perform any other duties required by law. The presence at the meeting in person or by proxy of Unitholders representing a majority of the outstanding Units is necessary to constitute a quorum to conduct business at the meeting. In determining the presence of a quorum, any Units represented by proxies that reflect abstentions will be treated as present and entitled to vote. With respect to the Termination Proposal, the sole proposal scheduled to come before the Meeting, the affirmative vote of the holders of not less than 662/3% of the outstanding Units is required for approval, provided a quorum is present. In the case of this proposal, abstentions or otherwise unvoted Units are effectively treated as "no" votes. Proxies are not being solicited by either the Trust or San Juan in connection with the Meeting. Under the rules of the New York Stock Exchange, brokers who hold shares in street name have discretionary authority to vote on certain "routine" items even if they have not received instructions from the persons entitled to vote such shares. However, brokers do not have authority to vote on "nonroutine" items (such as the Termination Proposal) without such instructions. Such "broker non-votes" (shares held by brokers or nominees as to which they have no discretionary power to vote on a particular matter and have received no instructions from the persons entitled to vote such shares) will be counted as present (if present or represented by proxy at the Meeting) and entitled to vote for purposes of determining whether a quorum is present but are not considered entitled to vote on any nonroutine matter to be acted upon. For matters requiring the affirmative vote of a super-majority of the outstanding Units (such as the Termination Proposal) abstentions and "broker non-votes" are effectively treated as "no" votes. NO RIGHT OF APPRAISAL The Trust is governed by the Delaware Business Trust Act and the Trust Agreement. Neither the Delaware Business Trust Act nor the Trust Agreement provide for any rights of appraisal for dissenting Unitholders. Because Unitholders have no appraisal rights, no action or failure to act by any Unitholder with respect to the vote on the Termination Proposal shall have the effect of compromising or waiving any such rights. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS (a) Security Ownership of Certain Beneficial Owners. The following table sets forth as of December 7, 1998 information with respect to the only Unitholders known to the Trustee to be beneficial owners of more than five percent of the outstanding Units. The following information is based upon San Juan's Amended Schedule 13D. 3 6 Amount and Nature of Beneficial Percent NAME AND ADDRESS OF BENEFICIAL OWNER Ownership of Class - ------------------------------------ --------- -------- San Juan Partners, L.L.C................................................. 5,867,968(1) 66.68% 910 Travis Street, Suite 2150 Houston, Texas 77002 Encap Energy Capital Fund, III, L.P...................................... 5,867,968(2) 66.68% 1100 Louisiana Street, Suite 3150 Houston, Texas 77002 Encap Energy Acquisition III-B Inc....................................... 5,867,968(2) 66.68% 1100 Louisiana Street, Suite 3150 Houston, Texas 77002 ECIC Corporation......................................................... 5,867,968(2) 66.68% 1100 Louisiana Street, Suite 3150 Houston, Texas 77002 BOCP Energy Partners, L.P................................................ 5,867,968(2) 66.68% 1100 Louisiana Street, Suite 3150 Houston, Texas 77002 First Union Investors, Inc............................................... 5,867,968(2) 66.68% One First Union Center, Fifth Floor Charlotte, North Carolina 28288 Charles T. McCord III.................................................... 5,867,968(2) 66.68% 1201 Louisiana, #1048 Houston, Texas 77002 O'Sullivan Oil & Gas Company, Inc........................................ 5,867,968(2) 66.68% 910 Travis Street, Suite 2150 Houston, Texas 77002 Christopher P. Scully.................................................... 5,867,968(2) 66.68% 910 Travis Street, Suite 2150 Houston, Texas 77002 Scott W. Smith Funding, L.L.C............................................ 5,867,968(2) 66.68% 910 Travis Street, Suite 2150 Houston, Texas 77002 John V. Whiting.......................................................... 5,867,968(2) 66.68% 910 Travis Street, Suite 2150 Houston, Texas 77002 Andover Group, Inc.......................................................... 5,867,968(2) 66.68% 910 Travis Street, Suite 2150 Houston, Texas 77002 - ---------- (1) Directly owned. (2) Represents Units directly owned by San Juan Partners, L.L.C., a limited liability company in which the named party holds a membership interest. 4 7 (b) Security Ownership of Management. The Trust has no directors or executive officers. As of December 7, 1998, NationsBank, N.A., the Trustee, did not beneficially own any Units. As of December 7, 1998, Mellon Bank (DE) National Association, the Delaware Trustee, did not beneficially own any Units. (c) Changes in Control. The Trustee knows of no arrangements the operation of which may at a subsequent date result in a change in control of the Trust, unless and to the extent the Termination Proposal or the other matters, agreements and arrangements described herein could be so characterized. UNITHOLDER PROPOSAL FOR TERMINATION OF THE TRUST San Juan, as a Unitholder of the Trust, has called the Meeting for the purpose of conducting a vote of Unitholders on the Termination Proposal. The Trust Agreement provides that the Trust may be terminated prior to January 1, 2003 only upon the affirmative vote in favor of termination by the holders of record of not less than sixty-six and two-thirds percent (66 2/3%) of the then outstanding Units. San Juan held of record and beneficially 5,867,968 Units, representing approximately 66.68% of the then outstanding Units, on the Record Date. SAN JUAN HAS INFORMED THE TRUSTEE THAT IT INTENDS TO VOTE ALL ITS UNITS IN FAVOR OF THE TERMINATION PROPOSAL. If the Termination Proposal is approved at the Meeting by the vote of the requisite percentage of Record Date Unitholders, then December 28, 1998 will be the "Termination Date" of the Trust pursuant to the Trust Agreement. The Trust Agreement specifies the procedure, following the Termination Date, for the sale of the Trust's remaining assets (principally the Royalty Interests) and the distribution of the proceeds from such sale, less certain administrative and other expenses, to Unitholders pursuant to the terms and conditions set forth in the Trust Agreement. See "Termination of the Trust as Proposed by the Termination Proposal" in Annex A hereto. The information contained in Annex A has been prepared by San Juan (except as indicated otherwise therein) and provided to the Trustee for inclusion in this information statement. Annex A contains a brief description of the general nature of the business conducted by San Juan, certain information regarding the background of and reasons for the Termination Proposal, a summary of the material features of the Termination Proposal, certain information regarding San Juan's contractual relationship with Burlington Resources and BROG and their affiliates, and certain additional information which San Juan believes may be of material interest to Unitholders. Set forth on Annex B is a report prepared by Netherland, Sewell & Associates, Inc., independent petroleum engineers (the "Reserve Report Update") summarizing the future net revenues, estimated as of August 31, 1998 to the Royalty Interests and proved reserves attributable to BROG's interest in the Underlying Properties. Set forth on Annex C is a report prepared by Netherland, Sewell & Associates, Inc., independent petroleum engineers (the "Tax Credit Report Update") summarizing the estimated Section 29 tax credits attributable to the Royalty Interests as of August 31, 1998. Although San Juan paid for the preparation of the Reserve Report Update and the Tax Credit Report Update, the information in such reports is the responsibility of Netherland, Sewell & Associates, Inc. and not San Juan, the Trust nor the Trustee. The Trust is by law a passive entity and the Trustee is unable to recommend the approval or disapproval of the Termination Proposal and is unable to engage in any business judgment as to the likely benefit or detriment to Unitholders of such proposal. UNITHOLDERS ARE URGED TO READ ANNEX A CAREFULLY AND IN ITS ENTIRETY. The information in Annex A is the responsibility of San Juan and not the Trust or the Trustee. SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES In connection with the Termination Proposal and the resulting liquidation of the Trust pursuant to the provisions of the Trust Agreement, the Trust will not incur any federal income tax liability as a result of the sale of the Trust's remaining royalty interests in the Underlying Properties (the "Remaining Royalty Interests", and the sale thereof the "NPI Sale") or payment to Unitholders of the net proceeds from such sale (the "Liquidating Distributions"). 5 8 NPI SALE AND LIQUIDATING DISTRIBUTIONS For federal income tax purposes, the NPI Sale will be taxable to the Unitholders of record on the Special Distribution Record Date (defined below). Each Unitholder will recognize gain or loss on the NPI Sale measured by the difference between the Unitholder's share of the amount realized on the NPI Sale and his or her adjusted basis for such Unitholder's Units. The amount realized from the NPI Sale will be allocated to Unitholders in the same manner as the Trustee allocates the income received by the Trust (i.e., to the Unitholders of record on the Special Distribution Record Date). Thereafter, each Unitholder may recognize additional income or loss in an amount equal to his or her share of any income or deductions of the Trust in accordance with his or her own method of accounting. Prior to determining the gain or loss resulting from the NPI Sale, each Unitholder should reduce his tax basis (but not below zero) in the Royalty Interests (and, correspondingly, his Units) by (1) the amount of depletion allowable with respect to the Remaining Royalty Interests through the date of the NPI sale, and (2) by the amount of any return of capital including returns of capital resulting from (i) adjustments to the cash reserve maintained by the Trust during a quarterly period and (ii) an increase in the cash reserve maintained by the Trust in anticipation of Trust expenses incurred or in connection with the NPI Sale and the liquidation of the Trust. See the discussion regarding "Allocations After Vote to Terminate Trust" below. Assuming the Unitholder holds his or her Units as a capital asset, gain or loss from the NPI Sale will be treated as a capital gain or loss. If the Units have been held for more than one year, the gain or loss will constitute a long-term capital gain or loss; otherwise, the gain or loss will constitute a short-term capital gain or loss. Notwithstanding the foregoing, a Unitholder must, upon the NPI Sale, treat as ordinary income his depletion recapture amount, which is an amount equal to the lesser of (i) the gain on such sale attributable to the disposition of the Remaining Royalty Interests or (ii) the sum of the prior depletion deductions taken with respect to the Remaining Royalty Interests (but not in excess of the initial basis of such Units allocated to the Remaining Royalty Interests.) Unitholders will be notified of their respective shares of (a) ordinary income for the Trust's final fiscal year and/or quarter and (b) the amount realized from the NPI Sale, in normal tax-reporting fashion. ALLOCATIONS AFTER VOTE TO TERMINATE TRUST Generally, a Unitholder is entitled to income, depletion and Section 29 tax credits to the extent that he or she is an owner of the economic interest at the time the coal seam gas is produced and sold. Since the inception of the Trust, the Trustee has allocated the income associated with cash paid to the Trust during a calender quarter, and the Section 29 tax credits and depletion allowable with regard to such income, to Unitholders of record on the quarterly record date for such quarter. With respect to each complete calender quarter, the quarterly record date for such calender quarter is generally 63 days following the end of such quarter. San Juan has called the Meeting for the purpose of voting on San Juan's Termination Proposal, which includes a proposal to terminate and liquidate the Trust. Given San Juan's ownership of more that 66 2/3% of the Units, it is expected that the vote at the Meeting will be sufficient to approve the termination of the Trust and the other matters included in the Termination Proposal. If such vote occurs, the Trust Agreement provides that any purchaser of the Remaining Royalty Interests is entitled to all proceeds of production attributable to the Remaining Royalty Interests after the date (the "Termination Date") of the vote in favor of terminating the Trust. As a result, all cash proceeds attributable to the period from the end of the prior calendar quarter to the Termination Date will be allocated (based on a daily proration of the proceeds for the entire calendar quarter) and distributed to Unitholders of record on the Quarterly Record Date on the 63rd day following the end of the calendar quarter in which the Termination Date occurs. However, unlike the allocation of cash proceeds between Unitholders and the purchaser of the Remaining Royalty Interests, income (and, correspondingly, the Section 29 tax credits attributable to such income) and depletion attributable to the Remaining Royalty Interests for the entire calendar quarter in which the Termination Date occurs (and for all subsequent calendar quarters thereafter until the NPI Sale) will be allocated to Unitholders of record on the Quarterly Record Date following the end of such calendar quarter. For the calendar quarter in which the NPI Sale occurs, income (and, correspondingly, the Section 29 tax credits attributable to such income) and depletion attributable to the Remaining Royalty Interests for the period beginning on the first day of such calendar quarter and ending on the date of the NPI Sale will be allocated to Unitholders of record on the Special Distribution Record Date. As described in the Trust Agreement, the "Special Distribution Record Date" means the end of the 15th day following the date of the NPI Sale, unless the date of the NPI Sale is ten days or less prior 6 9 to a Quarterly Record Date, in which case the Distribution Record Date will be the next Quarterly Record Date (unless the Trustee determines that another date is required to comply with applicable law or the rules of any securities exchange or quotation system on which the Units are listed, in which event the Special Distribution Record Date will be such other date). The Trustee will endeavor to cause the Special Distribution Record Date to be a normal Quarterly Record Date, but no assurance can be given that the NPI Sale will occur in such a manner to cause the two dates to occur concomitantly. Cash held by the Trust following the NPI Sale (including (i) the remaining portion of such cash, if any, retained by the Trust following the NPI Sale to pay expenses of the Trust incurred in connection with the liquidation, winding up and reporting requirements, and (ii) any interest earned on proceeds held by the Trust) will be distributed to Unitholders of record on the Special Distribution Record Date. Within ten days following the Special Distribution Record Date, the Trustee anticipates making a distribution of the proceeds from the NPI Sale and any remaining cash reserves of the Trust (but excluding amounts paid to the Trust attributable to the Remaining Royalty Interests after the Termination Date and prior to the date of the NPI Sale) reduced by amounts used by the Trustee to pay liabilities of the Trust or to establish a cash reserve for anticipated expenses of the Trust incurred in connection with the liquidation, winding up and reporting requirements of the Trust. After the Trust has completed all of its obligations regarding the liquidation, winding up and reporting requirements and paid all liabilities and expenses of the Trust, the Trustee will distribute any remaining cash amount to the Unitholders of record on the Special Distribution Record Date. It is possible that the United States Internal Revenue Service ("IRS") may challenge the Trust's use of (i) the Special Distribution Record Date to determine the allocation of (a) the amount realized from the NPI Sale, and (b) for the short period beginning on the first day of the calendar quarter in which the NPI Sale occurs and ending on the date of the NPI Sale, income arising from the Remaining Royalty Interests, Section 29 tax credits attributable to such income, and allowable depletion with regard thereto, or (ii) the quarterly record date allocations for the full or final partial quarter in which the Trust was in existence, or (iii) the allocation of income, depletion and Section 29 tax credits attributable to the Remaining Royalty Interest for any period less than a complete calendar quarter. Any IRS challenge is likely to have a material adverse effect only if successful and only for certain Unitholders. The information above is only a summary of some of the federal income tax consequences generally affecting the Trust and its individual U.S. Unitholders resulting from the liquidation of the Trust. This summary does not address the particular federal income tax consequences applicable to Unitholders other than U.S. individuals nor does it address state or local tax consequences. The tax consequences of the liquidation may affect Unitholders differently depending upon their particular tax situations, and, accordingly, this summary is not a substitute for careful tax planning and reporting on an individual basis. UNITHOLDERS SHOULD CONSULT THEIR TAX ADVISERS TO DETERMINE THE FEDERAL, STATE AND OTHER INCOME TAX CONSEQUENCES OF THE NPI SALE WITH RESPECT TO THEIR PARTICULAR TAX CIRCUMSTANCES. MARKET FOR UNITS The Units are listed and traded on the New York Stock Exchange under the symbol "BRU." The following table sets forth, for the periods indicated, the high and low sales prices per Unit on the New York Stock Exchange and the amount of quarterly cash distributions per Unit made by the Trust. 7 10 Price --------------------------- Distributions High Low per Unit -------- --------- ------------- 1998 First Quarter................................................... $ 9-3/8 $ 6-1/16 $.143235 Second Quarter.................................................. $ 9-7/16 $ 8-13/16 $.210321 Third Quarter................................................... $ 9-1/8 $ 7-1/16 $.210220 Fourth Quarter (through December 3)............................. $10-9/16 $ 8-1/8 $.201541 1997 First Quarter................................................... $9-3/4 $ 7-5/8 $.147801 Second Quarter.................................................. $8-1/4 $ 6-3/4 $.160766 Third Quarter................................................... $8 $ 7-1/16 $.205895 Fourth Quarter.................................................. $7-15/16 $ 5-3/8 $.125486 1996 First Quarter................................................... $13-5/8 $10-1/8 $.332882 Second Quarter.................................................. $11-3/4 $ 8-3/4 $.298843 Third Quarter................................................... $10 $ 8-3/4 $.255385 Fourth Quarter.................................................. $10 $ 8-1/4 $.250990 The closing price of the Units on the New York Stock Exchange Composite Tape on December 3, 1998 was $8-1/8 per Unit. AVAILABILITY OF TRUST AUDITORS Deloitte & Touche LLP serves as independent auditors of the financial statements of the Trust. It is expected that representatives of Deloitte & Touche LLP will attend the Meeting and be available to answer appropriate questions from Unitholders. INCORPORATION BY REFERENCE The following documents filed by the Trust with the Commission are incorporated by reference into this information statement: (a) Annual Report on Form 10-K for the fiscal year ended December 31, 1997; (b) Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 1998; (c) Current Report on Form 8-K dated September 25, 1998; and (d) Trust Agreement of Burlington Resources Coal Seam Gas Royalty Trust effective as of May 1, 1993 (filed as Exhibit 4.1 to the Trust's Form 10-Q for the quarter ended June 30, 1993). All documents subsequently filed by the Trust pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Information Statement and prior to the date of the Meeting shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing thereof. Any statement contained in a document incorporated or deemed incorporated by reference herein shall be deemed to be modified or superseded for purposes of this information statement to the extent that a statement contained herein, or in any subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so 8 11 modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the information statement. The Trustee will provide without charge to each person to whom this information statement is provided, upon the written request of any such person and by first class mail or equally prompt means within one day of receipt of such request, a copy of any and all information that has been incorporated by reference in this information statement (not including exhibits to the information that is incorporated by reference unless such exhibits are specifically incorporated by reference into the information that the information statement incorporates). Requests for such information should be directed to Ron E. Hooper, Vice President and Administrator of the Trustee, NationsBank, N.A., Trustee, 901 Main Street, Suite 1700, Dallas, Texas 75202. BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST By: NATIONSBANK, N.A., Trustee By: /s/ Ron E. Hooper -------------------------------- RON E. HOOPER Vice President and Administrator Dallas, Texas December 7, 1998 9 12 ANNEX A CERTAIN INFORMATION CONCERNING SAN JUAN AND THE TERMINATION PROPOSAL INTRODUCTION TO THE TERMINATION PROPOSAL San Juan Partners, L.L.C., a Texas limited liability company ("San Juan"), was organized in January 1998 for the following purposes: (i) to, directly or indirectly, acquire, invest in, own and dispose of the units of beneficial interest (the "Units") of the Burlington Resources Coal Seam Gas Royalty Trust, a Delaware business trust (the "Trust"), (ii) to, directly or indirectly, invest in, own and dispose of interests in the properties owned by the Trust and other interests in the Northeast Blanco Unit in San Juan and Rio Arriba Counties, New Mexico, and (iii) to exercise all of the rights and powers conferred upon San Juan pursuant to agreements relating to the business of San Juan. Since inception, San Juan has not engaged in any material business other than that incident to its organization and in connection with the transactions described in this Annex A. San Juan is seeking to initiate proceedings to terminate the Trust. According to the terms of the Trust Agreement among Meridian Oil Production, Inc., Burlington Resources, Inc. ("BRI"), Mellon Bank (DE) National Association (the "Delaware Trustee") and NationsBank N.A., (as successor to NationsBank of Texas, N.A., the "Trustee") dated May 1, 1993 (the "Trust Agreement"), the Trust may terminate prior to January 1, 2003 only upon the affirmative vote in favor of termination by holders of at least 662/3% of the outstanding Units. A meeting of the Unitholders may be called by Unitholders owning of record not less than 10% of the then outstanding Units. San Juan currently beneficially owns more than 662/3% as of the Record Date (as defined in the Information Statement) of the outstanding Units. See "Interest of San Juan in the Units" below. In accordance with the terms of the Purchase and Sale Agreement (the "Purchase Agreement") dated October 21, 1998 between San Juan and Burlington Resources Oil & Gas Company ("BROG"), San Juan has called a meeting of the Unitholders be called as soon as practicable for the purpose of voting on the termination and liquidation of the Trust. As required by the Trust Agreement, the notice of such meeting must be distributed at least 20, but not more than 60, days prior to the date of the meeting. The Information Statement is being delivered to Unitholders in connection with the calling and holding of a meeting of Unitholders to terminate the Trust. At the meeting of the Unitholders described in the Information Statement, San Juan intends to vote any and all Units beneficially owned by it at the time of such meeting in favor of terminating the Trust. Following such meeting, if holders of record of at least 662/3% of the Units vote to terminate the Trust, it is expected that the Trustee will commence the liquidation process in accordance with the terms of the Trust Agreement, and that the existence of the Trust will continue until the affairs of the Trust are liquidated and wound up. See "Termination of the Trust as Proposed by the Termination Proposal -- Liquidation Procedure." The liquidation and winding up of the Trust will be conducted by the Trustee in accordance with the procedures therefor specified in the Trust Agreement. Under the Purchase Agreement, San Juan will acquire certain leases, leasehold interests and overriding royalty interests of BROG (collectively, the "Leases") in and to the Fruitland coal formation in the Northeast Blanco Unit, in San Juan and Rio Arriba Counties, New Mexico (the "Underlying Properties"), as well as certain related assets and other contractual rights of BROG and its affiliates, 13 including certain rights under the Trust Agreement to offer to purchase the Trust's Remaining Royalty Interests (as defined in the Trust Agreement) following the termination of the Trust as described herein. See "Background to the Termination Proposal -- Purchase Agreement with BROG" and "Termination of the Trust as Proposed by the Termination Proposal -- Liquidation Procedure." In accordance with the terms of the Trust Agreement, upon consummation of the sale of the Trust's Remaining Royalty Interests, the Trust will distribute the net proceeds from such sale to the Unitholders pro rata and once such distributions have been made, the Trust will be dissolved. Following the date of the requisite Unitholder vote to terminate the Trust (defined in the Trust Agreement and herein as the "Termination Date"), in accordance with Section 9.03(f) of the Trust Agreement, neither the Trust nor the Unitholders will be entitled to any sales proceeds of production attributable to the Remaining Royalty Interests after the Termination Date. Instead, under the Trust Agreement, the purchaser of the Remaining Royalty Interests in accordance with Sections 9.03(c) through (e) of the Trust Agreement will be entitled to all such sales proceeds. See "Reasons for and Interest of San Juan in the Termination Proposal" below. Under the Purchase Agreement, San Juan and BROG agreed that in connection with the Closing (defined below) and as a result of the termination of the Trust, the following events shall occur: (i) the Gas Contract (defined below) shall terminate as described herein, (ii) the Gathering Agreement (defined below) shall be amended as described herein, (iii) BROG and BRI shall assign their rights and obligations under the Trust Agreement and the Administrative Services Agreement (defined below) to San Juan and San Juan shall assume such rights and obligations, and (iv) the obligations of BRI under the Trust Agreement and the Administrative Services Agreement (other than the obligations relating to the windup of the Trust and any such obligations which by their express terms survive the termination of the Trust) shall terminate and BRI shall be released therefrom (the proposal to terminate the Trust and the events described in clauses (i) through (iv) above being referred to herein as the "Termination Proposal"). The Purchase Agreement provides that the Gas Contract shall be terminated as of the end of the month in which the Termination Date occurs, and the Gathering Agreement shall be amended to provide for an annual escalation of the delivery fees of one cent per Mcf each year beginning January 1, 1999 (with a maximum cap on such fees). Additionally, the term of the Gathering Agreement shall be amended to continue until December 31, 2007. IDENTITY AND BACKGROUND OF SAN JUAN San Juan was organized in January 1998 for the purposes described above under "Introduction to the Termination Proposal." The principal executive offices of San Juan are located at 910 Travis Street, Suite 2150, Houston, Texas 77002, and its telephone number is (713) 759-2030. The name, citizenship, business address and recent principal occupation of the manager of San Juan are set forth in Schedule I to this Annex A to the Information Statement. The members of San Juan are (i) EnCap Energy Capital Fund III, L.P., a Texas limited partnership ("EnCap Energy"), (ii) EnCap Energy Acquisition III-B, Inc., a Texas corporation ("EnCap B"), (iii) ECIC Corporation, a Texas corporation ("ECIC"), (iv) BOCP Energy Partners, L.P., a Texas limited partnership ("BOCP"), (v) First Union Investors, Inc., a North Carolina corporation ("First Union Investors"), (vi) Andover Group, Inc., a Texas corporation ("Andover"), (vii) Charles T. McCord III, (viii) O'Sullivan - 2 - 14 Oil & Gas Company, Inc., a Texas corporation ("O'Sullivan Oil"), (ix) Christopher P. Scully ("Scully"), (x) Scott W. Smith Funding, L.L.C., a Texas limited liability company ("Smith Funding"), and (xi) John V. Whiting ("Whiting"). EnCap Energy, EnCap B, ECIC and BOCP are sometimes collectively referred to herein as the "EnCap Group." Andover, McCord, O'Sullivan Oil, Scully, Smith Funding and Whiting are sometimes collectively referred to herein as the "O'Sullivan Group." The EnCap Group, the First Union Investors and the O'Sullivan Group are sometimes collectively referred to herein as the "Parents." The EnCap Group, the First Union Investors and the O'Sullivan Group have approximately a 55.1%, 24.9% and 20.0% respective interest in San Juan. The EnCap Group. The principal business of EnCap Energy is engaging in oil and gas investments. EnCap Investments L.C., a Texas limited liability company ("EnCap Investments"), is the general partner of EnCap Energy. The executive offices of EnCap Energy are located at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of EnCap B is engaging in oil and gas investments. The executive offices of EnCap B are located at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. EnCap Energy Capital Fund III-B, L.P. is the sole shareholder of EnCap B. Current information concerning the directors and executive officers of EnCap B is set forth on Schedule I hereto. EnCap Energy Capital Fund III-B, L.P. is a Texas limited partnership with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of EnCap Energy Capital Fund III-B, L.P. is engaging in oil and gas investments. EnCap Investments is the general partner of EnCap Energy Capital Fund III-B, L.P. The principal business of ECIC is engaging in oil and gas investments. ECIC's principal executive offices are located at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. Energy Capital Investments Company PLC ("Energy Capital") is the sole shareholder of ECIC. Current information concerning the directors and executive officers of ECIC is set forth on Schedule I hereto. Energy Capital is a company registered in England and Wales under the Companies Act 1985 under number 2867571, with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of Energy Capital is engaging in oil and gas investments. Energy Capital is the sole shareholder of ECIC. Current information concerning the directors of Energy Capital is set forth on Schedule I hereto. EnCap Investments is a Texas limited liability company with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. EnCap Investments is the general partner of EnCap Energy and EnCap Energy Capital Fund III-B, L.P. The principal business of EnCap Investments is engaging in oil and gas investments. Current information concerning the members and managing directors of EnCap Investments is set forth on Schedule I hereto. The principal business of BOCP is engaging in oil and gas investments. The principal executive offices of BOCP are located at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. Banc One Capital Partners VIII, Ltd. is the general partner of BOCP. - 3 - 15 Banc One Capital Partners VIII, Ltd. is an Ohio limited liability company, with its principal executive offices at 150 East Gay Street, Columbus, Ohio 43215. The principal business of Banc One Capital Partners, VIII, Ltd. is operating a closed-end investment fund ("Business") that acts as the general partner of BOCP and to engage in other activities necessary or incidental to such Business. The managing member of Banc One Capital Partners VIII, Ltd. is BOCP Holdings Corporation. Current information concerning the managers of Banc One Capital Partners VIII, Ltd. is set forth on Schedule I hereto. BOCP Holdings Corporation is an Ohio corporation with its principal executive offices at 150 East Gay Street, Columbus, Ohio 43215. The principal business of BOCP Holdings Corporation is investments. BOCP Holdings is a wholly-owned subsidiary of Banc One Capital Holdings Corporation, an Ohio corporation. Current information concerning the directors and executive officers of BOCP Holdings Corporation is set forth on Schedule I hereto. Banc One Capital Holdings Corporation is an Ohio corporation with its principal executive offices at 150 East Gay Street, Columbus, Ohio 43215 and is a wholly-owned subsidiary of BANC ONE CORPORATION. The principal business of Banc One Capital Holdings Corporation is investments. Current information concerning the directors and executive officers of Banc One Holdings Corporation is set forth on Schedule I hereto. BANC ONE CORPORATION is an Ohio corporation with its principal executive offices at 150 E. Broad Street, Columbus, Ohio 43271. BANC ONE CORPORATION is a bank holding company that provides a full range of consumer and commercial banking and related financial services. Current information concerning the directors and executive officers of BANC ONE CORPORATION is set forth on Schedule I hereto. First Union Investors and First Union Corporation. First Union Investors is a wholly-owned subsidiary of First Union Corporation, a North Carolina corporation. The principal business of First Union Investors is engaging in various investment activities on behalf of First Union Corporation and its affiliates. First Union Corporation is a registered bank holding company that is principally engaged in the business of banking through its subsidiaries. The principal executive offices of First Union Investors and First Union Corporation are located at One First Union Center, Charlotte, North Carolina 28288. Current information concerning the directors and executive officers of First Union Investors and First Union Corporation is set forth on Schedule I hereto. First Union National Bank, a wholly-owned subsidiary of First Union Corporation, has investment discretion, but not voting authority for 200 Units. The address of First Union National Bank is One First Union Center, Charlotte, North Carolina 28288. The O'Sullivan Group. The principal business of Andover is real estate development. Andover's principal executive offices are located at 910 Travis Street, Suite 2205, Houston, Texas 77002. A. John Knapp, Jr., a United States citizen, is the controlling shareholder and President of Andover. His business address is 910 Travis Street, Suite 2205, Houston, Texas 77002. The principal employment of Mr. Knapp for the preceding five years has been acting as President of Andover. Current information concerning the directors and executive officers of Andover is set forth on Schedule I hereto. - 4 - 16 Charles T. McCord III, a United States citizen, is the President and owner of McCord Investment, Inc. and the general partner of McCord Production, Ltd. His business address and the business address of McCord Production, Ltd. is 1201 Louisiana, Suite 1048, Houston, Texas 77002. The principal business of McCord Production, Ltd. is the exploration, acquisition and enhancement of oil and gas properties. In addition to his employment with McCord Production, Ltd., for the preceding five years Mr. McCord has been the managing member of CTM 1994, LLC and CTM 1995, LLC, which are all engaged in the business of oil and gas exploration and production. The business address of McCord Investments, Inc., CTM 1994, LLC and CTM 1995, LLC is 1201 Louisiana Street, Suite 1048, Houston, Texas 77002. The principal business of McCord Investments, Inc. is oil and gas exploration and production. The principal business of O'Sullivan Oil is oil and gas exploration and production. The principal executive offices of O'Sullivan Oil are located at 910 Travis Street, Suite 2150, Houston, Texas 77002. C. N. O'Sullivan, a United States citizen, is the sole shareholder and the President of O'Sullivan Oil. His business address is 910 Travis Street, Suite 2150, Houston, Texas 77002. The principal employment of Mr. O'Sullivan for the preceding five years has been acting as President of O'Sullivan Oil. Current information concerning the director and executive officers of O'Sullivan Oil is set forth on Schedule I hereto. Christopher P. Scully, a United States citizen, is the President of Scully Oil & Gas Company and Excelsior Exploration Corporation. His business address, and the business address of Scully Oil & Gas Company and Excelsior Exploration Corporation, is 910 Travis Street, Suite 2150, Houston, Texas 77002. The principal business of Scully Oil & Gas Company and Excelsior Exploration Corporation is oil and gas exploration and production. Mr. Scully has been President of Scully Oil & Gas Company from 1994 to the present and has been President of Excelsior Exploration Corporation from 1989 to the present. The principal business of Smith Funding is to own a membership interest in San Juan. The principal executive offices of Smith Funding are located at 910 Travis Street, Suite 2150, Houston, Texas 77002. Current information concerning the members and managers of Smith Funding is set forth on Schedule I hereto. John V. Whiting, a United States citizen, is a Consulting Operations Manager for O'Sullivan Oil. His business address is 910 Travis Street, Suite 2150, Houston, Texas 77002. From 1993 to 1995, Mr. Whiting was an Operations Manager for Main Energy, Inc., an oil and gas exploration and production company, and a Vice President of Main Operating Co, Inc., a consulting and contract operation firm. The principal executive offices of both Main Energy, Inc. and Main Operating Co., Inc. are 1111 Fannin, Suite 1346, Houston, Texas 77002, and the principal business of both companies is oil and gas exploration and production. From 1995 to 1996, Mr. Whiting acted as an independent consultant for engineering and operations and the principal address from which such operations were conducted is 5200 Nett, Houston, Texas 77007. From 1996 to 1997, he was employed as Vice President of O'Sullivan Oil. During the last five years, neither San Juan, the Parents, nor to the best knowledge of San Juan and the Parents, any of the persons listed in Schedule I, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, neither San Juan, the Parents, nor to the best knowledge of San Juan and the Parents, any of the persons listed in Schedule I was a party to a civil proceeding of a judicial or - 5 - 17 administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. INTEREST OF SAN JUAN IN THE UNITS As of October 28, 1998, San Juan beneficially owned an aggregate of 5,867,968 Units, constituting approximately 66.68% of the currently outstanding Units (the percentage of Units being based upon 8,800,000 Units outstanding as of October 23, 1998 as set forth in the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998). Pursuant to the Amended and Restated Limited Liability Company Regulations of San Juan, the Parents have shared voting and dispositive power over the 5,867,968 Units beneficially owned by San Juan and may be deemed to be the beneficial owner thereof. See "Security Ownership of Certain Beneficial Owners" in the Information Statement. BACKGROUND TO THE TERMINATION PROPOSAL Set forth below is a description of the contacts, agreements and other arrangements relating to San Juan's proposal to initiate proceedings to pursue the termination of the Trust and the other aspects of the Termination Proposal. See also "Reasons for and Interest of San Juan in the Termination Proposal -- Existing Interest in the Underlying Properties." Request for Inspection of Records. During the week of October 13, 1997, Scott W. Smith, a consultant to O'Sullivan Oil and a member and manager of Smith Funding, spoke with Ron E. Hooper, Vice President of the Trustee, pursuant to a telephone conversation. During such conversation, Mr. Smith, on behalf of C. N. O'Sullivan, President of O'Sullivan Oil, requested an opportunity to review the ownership ledger of the Trust. Mr. Hooper requested that Mr. Smith provide written notice of such request. - 6 - 18 On October 20, 1997, Mr. Smith sent the following letter by overnight courier to the Trustee: October 20, 1997 Federal Express Nationsbank of Texas, N.A., Trustee Burlington Resources Coal Seam Gas Royalty Trust 910 Main Street, Suite 1700 Dallas, Texas 75202 Attention: Mr. Ron Hooper Re: Inspection of Books Gentlemen: Pursuant to Article 12.01 of the Trust Agreement of the Burlington Resources Coal Seam Gas Royalty Trust dated May 1, 1993, by and between Meridian Oil Production, Inc., Burlington Resources, Inc., Mellon Bank National Association and Nationsbank of Texas, N.A., Chris N. O'Sullivan, as the owner of 20,000 units of said trust is hereby requesting the opportunity to review the ownership ledger of the trust at your earliest convenience. Mr. O'Sullivan owns these units in Account No. 32004087 at the firm of Morgan Keegan & Company, Inc. Should you have any questions concerning his position, please contact Mr. William Vaseliades at (713) 840-3628. We are looking forward to hearing from you as soon as possible to schedule a mutually agreeable appointment. Very truly yours, Scott W. Smith SWS/ncy On or about October 21, 1997, Mr. Smith contacted Mr. Hooper by telephone regarding the request to review the ownership ledger of the Trust. Mr. Hooper responded that the Trustee would confer with its counsel concerning the Trustee's response to the request. During the week of October 27, 1997, Mr. Smith contacted the Trustee by telephone. During this telephone conversation with Mr. Hooper, a meeting date of November 11, 1997, was set for Mr. Smith to review the ownership ledger concerning the Units. On November 11, 1997, at the offices of the Trustee, Mr. Smith reviewed a Unit ownership ledger, dated as of September 2, 1997. - 7 - 19 On November 24, 1997, Mr. Smith contacted the Trustee by telephone. Mr. Smith requested information concerning the calculation of the tax credit allocation in connection with the 1997 fourth quarter distribution, which was announced on November 1, 1997. Donald Yuchs, a representative of the Trustee, in response to the request of Mr. Smith, faxed Mr. Smith several sheets regarding the cash and tax credit allocation for the fourth quarter distribution. Tender Offer of San Juan. On January 20, 1998, San Juan commenced a tender offer to purchase 5,446,860 Units at a price of $8.25 per Unit. Because fewer than the requisite 5,446,860 Units were tendered pursuant to the tender offer, San Juan did not purchase any Units in accordance with the terms of the tender offer. The tender offer expired in accordance with its terms on February 17, 1998. Competing Tender Offer of Devon. On February 13, 1998, Devon Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Devon Energy Corporation, a Nevada corporation ("Devon"), a competing bidder and entity not affiliated with San Juan, commenced a tender offer to purchase any and all of the Units at a price of $8.75 per Unit. San Juan understands that Devon purchased 356,228 Units in accordance with the terms of the tender offer. The tender offer expired in accordance with its terms on March 13, 1998. Purchases of Units. Between February 17, 1998 and October 6, 1998, San Juan acquired an aggregate of 5,248,328 Units in a series of open market acquisitions and privately-negotiated transactions. Acquisition of Proxy. On March 11, 1998, San Juan acquired the right to vote 165,000 Units (the "Put Units"). The Put Units cannot be disposed of by their holder (the "Put Unitholder") unless they are first offered to San Juan. In addition, the Put Unitholder has the right to sell the Put Units to San Juan for a one year period expiring March 11, 1999 at a price of $9.25 per Unit. A definitive written agreement concerning the Put Units has not been finalized. Agreement with Devon. On July 10, 1998, San Juan entered into a letter agreement (the "Devon Agreement") concerning the sale of 356,228 Units by Devon to San Juan. For as long as San Juan continues to own 50% or more of the outstanding Units, Devon has agreed, pursuant to the Devon Agreement, that it shall not acquire any additional Units without the written consent of San Juan. The Devon Agreement further provides that, if, within eighteen months after execution of the Devon Agreement, San Juan should acquire the underlying working interest (the "Working Interest") in the Underlying Properties from BRI, and the Remaining Royalty Interests presently held by the Trust are subsequently consolidated into the properties owned by San Juan, then Devon shall have ten days to purchase an undivided 6.70% of the 19.6% working interest/16.5% net revenue interest owned by San Juan by paying 6.70% of San Juan's direct out-of-pocket expenses reasonably incurred in San Juan's acquisition of the Units and the Working Interest, including financing costs. Upon consummation of the Purchase Agreement, San Juan will acquire the Working Interest. San Juan is not presently aware of Devon's intentions regarding its purchase right under the Devon Agreement if the transactions contemplated under the Purchase Agreement are consummated. Additional Contacts and Negotiations. During August and the first half of September 1998, San Juan and BROG engaged in the negotiation of a letter of intent relating to the purchase by San Juan of interests of BROG in and to the Underlying Properties, including the Leases and certain other assets and contractual rights. In connection therewith, after a series of telephone calls among San Juan, BROG and the Trustee, representatives of San Juan, Encap, BROG and - 8 - 20 the Trustee met in Houston on September 4, 1998 to discuss the timetable for the letter of intent and a definitive agreement, as well as mechanics for the preparation and filing of a proxy or information statement relating to the proposed termination of the Trust. Letter of Intent with BROG. On September 17, 1998, San Juan entered into a letter of intent (the "Letter of Intent") with BROG. The Letter of Intent contemplated the purchase by San Juan of interests of BROG in and to the Underlying Properties, including the Leases and certain other assets and contractual rights. The Letter of Intent provided that San Juan and BROG would enter into a definitive purchase and sale agreement which would provide for an effective date of July 1, 1998 and govern the transactions contemplated by the Letter of Intent. Following the signing of the Letter of Intent, San Juan and BROG began negotiating the definitive purchase and sale agreement. Purchase Agreement with BROG. General. On October 21, 1998, San Juan entered into the Purchase Agreement with BROG, as contemplated by the Letter of Intent. Pursuant to the terms of the Purchase Agreement, BROG has agreed to sell (or cause to be sold), and San Juan has agreed to buy, all of BROG's right, title and interest in and to (i) the Leases; (ii) the wells, fixtures and equipment in connection with the Leases; (iii) that certain Northeast Blanco Unit Agreement dated July 16, 1951 (the "Unit Agreement") and that certain Unit Operating Agreement dated July 16, 1951, as amended on May 14, 1959 and January 24, 1991 (the "Unit Operating Agreement"), insofar as same cover the Fruitland coal formation; (iv) certain gas purchase contracts, product purchase and sale agreements, gas gathering agreements and gas processing agreements related to the Leases (to the extent they are assignable) including, but not limited to, that certain Gas Purchase Contract dated effective May 1, 1993, by and between Meridian Oil Trading Inc. and Meridian Oil Production Inc. (the "Gas Contract"); (v) any equipment leases and rental contracts related to the interests conveyed, to the extent assignable; (vi) the rights of BROG, if any, under the Trust Agreement to the extent assignable; and (vii) the rights of BROG, as assignor, under that certain Net Profits Interest Conveyance (the "Net Profits Conveyance") dated effective May 1, 1993 from Meridian Oil Production Inc. to the Trust (collectively, the "Interests"). In addition, the Purchase Agreement provides that San Juan shall acquire (x) certain rights of BRI under the Trust Agreement and that certain Administrative Services Agreement dated effective May 1, 1993 by and between BRI and the Trust (the "Administrative Services Agreement") and (y) certain rights of Burlington Resources Trading Inc. ("BRTI") under that certain Gathering Agreement (defined herein), all as described below. The effective date of the conveyances contemplated under the Purchase Agreement is July 1, 1998 (the "Effective Time"). Substantially all of the working interests owned by BROG under the Leases are burdened by the Remaining Royalty Interests, which comprise the Trust assets and the Units thereof. San Juan has agreed to pay a purchase price of $20,750,000 cash for the Interests, which amount may be adjusted, among other things, (i) for certain Title Defects or Environmental Defects (as those terms are defined in the Purchase Agreement) associated with the Interests; (ii) in the event of certain casualty losses or upon the failure of BROG to obtain certain required consents to an assignment of a Lease; or (iii) for certain natural gas imbalances with respect to the Interests. Under the Purchase Agreement, San Juan and BROG agreed that in connection with the Closing (as defined below) and as a result of the termination of the Trust, the following events shall occur: (i) the - 9 - 21 Gas Contract shall terminate as described herein, (ii) the Gathering Agreement shall be amended as described herein, (iii) BROG and BRI shall assign their rights and obligations under the Trust Agreement and the Administrative Services Agreement to San Juan and San Juan shall assume such rights and obligations, and (iv) the obligations of BRI under the Trust Agreement and the Administrative Services Agreement (other than the obligations relating to the windup of the Trust and any such obligations which by their express terms survive the termination of the Trust, including BRI's indemnification obligations to the Trustee) shall terminate and BRI shall be released therefrom. Indemnities under the Purchase Agreement. As of the Closing Date (as defined below), BROG has agreed to retain and perform (except to the extent expressly assumed by San Juan pursuant to the Purchase Agreement) the liabilities and obligations of BROG (i) that relate to periods prior to the Effective Time and which arise under the Trust Agreement or the Net Profits Conveyance; (ii) that relate to periods prior to the Effective Time arising under existing leases, operating agreements, gas purchase contracts or other agreements relating to the Interests; and (iii) that relate to the gross negligence or willful misconduct of BROG during the period between the Effective Time and the Closing Date. In addition, BROG has agreed, to the fullest extent permitted by law, to indemnify San Juan and certain of its related parties for claims arising out of (i) the ownership or operation of the Interests prior to the Effective Time, (ii) BROG's retention of certain obligations or liabilities in accordance with the terms of the Purchase Agreement, (iii) the breach by BROG of its representations contained in the Purchase Agreement, and (iv) the breach by BROG of any of its agreements and covenants contained in the Purchase Agreement. Notwithstanding the preceding, the indemnity does not include (x) matters pertaining to title to the Interests, (y) any claims with respect to any and all actual, alleged or threatened gas balancing liabilities and obligations, or (z) any claims with respect to any violation of environmental laws (regardless of the dollar amount in issue) waived pursuant to the Purchase Agreement or any other claims relating to the Interests (including environmental claims) expressly assumed by San Juan under the Purchase Agreement. As of the Closing Date, San Juan has agreed to assume and perform (except to the extent expressly retained by BROG pursuant to the Purchase Agreement) the liabilities and obligations of BROG that pertain to the ownership and operation of the Interests (i) that relate to periods after the Effective Time and arise under the Trust Agreement or the Net Profits Conveyance, (ii) that relate to periods after the Effective Time and that arise under the existing leases, operating agreements, gas purchase contracts or other agreements relating to the Interests, (iii) in connection with balancing of overproduction or underproduction from the Interests relating to periods before or after the Effective Time, (iv) that relate to environmental claims, to the extent the aggregate cost to remediate such environmental claims does not exceed $250,000, net to BROG's interest in the affected Interests, and (v) for any violation of environmental laws waived pursuant to the Purchase Agreement. As of the Closing Date, San Juan has also agreed to assume and perform the liabilities and obligations of BRI that relate to periods after the Effective Time and arise under the Administrative Services Agreement. Additionally, as of the Closing Date, San Juan has agreed to assume and perform any and all liabilities and obligations to comply with all laws and governmental regulations with respect to the Interests relating to events which occur after the Effective Time. San Juan has further agreed, to the fullest extent permitted by law, to indemnify BROG, BRI and certain of their related parties (the "Seller Parties") from and against any and all claims attributable to or - 10 - 22 arising out of the following: (i) the ownership or operation of the Interests subsequent to the Effective Time, (ii) San Juan's assumption of any obligation or liability contained in the Purchase Agreement, (iii) the breach by San Juan of its representations, agreements or covenants contained in the Purchase Agreement, and (iv) any act, omission, event, condition or circumstance involving or relating to the Interests occurring or existing before the Effective Time that was waived pursuant to the terms of the Purchase Agreement. San Juan has also agreed, to the fullest extent permitted by law, to indemnify and hold the Seller Parties harmless from and against any and all claims attributable to or arising out of any claims or actions by or through any holder of any interest in the Trust in connection with the transactions contemplated by the Purchase Agreement or the termination or liquidation of the Trust as contemplated by the Purchase Agreement. In addition, San Juan has agreed, to the fullest extent permitted by law, to indemnify the Seller Parties from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Seller Parties become subject under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), insofar as such loss, claim, damage, liability or action arises out of or is based upon, (i) any actual or alleged untrue statement of a material fact contained in any preliminary or definitive proxy statement, information statement, other solicitation material or any other document filed by or on behalf of San Juan with the Securities and Exchange Commission (the "Commission"), or any other statement publicly made by or on behalf of San Juan in connection with the proposal by San Juan to terminate the Trust or any actions taken by or behalf of San Juan after such termination, or (ii) the actual or alleged omission to state in any preliminary or definitive proxy statement, information statement, other solicitation material or any other document filed by or on behalf of San Juan with the Commission, or any other statement publicly made by or on behalf of San Juan in connection with the proposal by San Juan to terminate the Trust or any actions taken by or on behalf of San Juan after such termination, any material fact required to be stated therein or necessary to make the statements therein not misleading. San Juan, however, will not be liable to the extent that any such claim arises out of, or is based upon, (x) any fraudulent misrepresentation, gross negligence or willful misconduct of BROG or (y) any untrue statement or omission included in any such preliminary or definitive proxy statement, information statement or other solicitation material in reliance upon and in conformity with written information furnished to San Juan or the trustee of the Trust by or on behalf of BROG or any third party specifically for inclusion therein. If the indemnification described above is unavailable for any reason or is insufficient to hold harmless the Seller Parties in respect of any such loss, claim, damage or liability, or any action in respect thereof, then San Juan shall, in lieu of indemnifying the Seller Parties, contribute to the amount paid or payable by the Seller Parties as a result of such loss, claim, damage or liability, or action in respect thereof, in such proportion as appropriate to reflect the relative fault of San Juan with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to whether the actual or alleged untrue statement of a material fact or omission to state a material fact relates to information supplied by San Juan to the Seller Parties. Closing under the Purchase Agreement. The Purchase Agreement provides that the closing of the transactions under such agreement is to be held no later than ten business days following the Purchase Agreement Trust Termination Date (as defined below), or at such other time as BROG and San Juan may - 11 - 23 agree (the "Closing" or the "Closing Date"). Pursuant to the terms of the Purchase Agreement, the "Purchase Agreement Trust Termination Date" is the date on which all of the following conditions have been fully satisfied: (i) the Unitholders of the Trust have approved, by an affirmative vote or consent, the termination and liquidation of the Trust in accordance with Article VIII and Section 9.02 of the Trust Agreement and (ii) the clearance or approval of the transactions contemplated in clause (i) above and any related filings required or advisable under applicable laws and regulations by all governmental authorities and with any applicable stock exchange requirements. The obligation of BROG to close the transactions contemplated by the Purchase Agreement is subject to certain conditions, including (i) the termination of all of BRI's obligations (other than obligations relating to the winding-up of the Trust and any obligations which expressly survive the termination of the Trust) under the Trust Agreement and under the Administrative Services Agreement; (ii) that the total adjustments to the purchase price do not exceed $4,000,000; (iii) there being no pending legal or equitable action seeking to enjoin, prohibit or declare illegal the purchase and sale of the Interests as contemplated by the Purchase Agreement; and (iv) all consents, approvals and waivers required to be obtained in order to consummate the transactions shall have been obtained, other than consents and approvals that are customarily obtained after the consummation of similar transactions. The obligation of San Juan to close the Purchase Agreement is also subject to certain similar conditions. At the Closing, (i) San Juan will execute and BROG will cause Burlington Resources Gathering Inc. ("BRGI"), as successor-in-interest to Meridian Oil Gathering Inc. ("MOGI") to execute and deliver an amendment to the Gathering Agreement, pursuant to which BRGI will agree to gather, dehydrate, treat and deliver up to 58,000 MCFD of San Juan's gas for a specified fee through at least December 31, 2007; (ii) San Juan will execute, and BROG will cause BRTI, as successor-in-interest to MOTI, to execute and deliver, an agreement pursuant to which the Gas Contract will be terminated, on the last day of the month in which the Purchase Agreement Trust Termination Date occurs; and (iii) San Juan shall execute and deliver and BROG shall cause BRTI to execute and deliver, an agreement whereby each time San Juan receives a bona fide offer from a third party to purchase gas produced from the Interests for a term of greater than six months, BRTI shall have a right of first refusal for five business days to purchase such gas upon the same terms contained in such offer. Termination of the Purchase Agreement. Except as otherwise provided in the Purchase Agreement, if all of the conditions to Closing described in the Purchase Agreement have not been satisfied or waived by the respective parties on or before April 1, 1999 (or such later date as may be mutually agreed upon by the parties in writing), the Purchase Agreement will terminate; provided, however, the Purchase Agreement shall not terminate automatically on April 1, 1999 if (i) the conditions to closing set forth in the Purchase Agreement have not been satisfied solely because the transactions contemplated by the Purchase Agreement are still pending approval or clearance from the Commission or other regulatory agency, or (ii) such approvals or clearances have been received, but because of the delay involved in obtaining such approvals or clearances, adequate time does not remain to accomplish the steps subsequent to receiving such approvals or clearances necessary for all such conditions to have been met. Each party will remain liable for any willful failure to satisfy any conditions to Closing required to be satisfied by it or for such party's breach of any of its representations, covenants or other obligation contained in the Purchase Agreement. In addition, if San Juan fails to timely initiate proceedings to terminate or liquidate the Trust in accordance with Article VIII and Sections 9.02 and 9.03 of the Trust Agreement, San Juan is required to pay to BROG $2,000,000 as liquidated damages. - 12 - 24 Covenants under the Purchase Agreement. During the period from the date of the Purchase Agreement to Closing, BROG has agreed to consult with San Juan with respect to matters concerning the Interests, including certain authorizations for expenditures, and with respect to all other material decisions to be made with respect to the Interests. From the date of the Purchase Agreement until its termination, BROG has agreed that it will not, and will use its commercially reasonable efforts to cause its officers, directors, employees, financial or legal advisors not to, directly or indirectly, (i) take any action to solicit, initiate or encourage any proposal to acquire from BROG the Interests, or any interest therein, (ii) engage in negotiations with, or disclose any nonpublic information relating to the Interests or afford access to the properties, books or records of BROG or any of its subsidiaries to, any person that may be considering making, or has made, a proposal to acquire the Interests, or (iii) exercise its right under Section 9.03(c) of the Trust Agreement to make a cash offer to purchase all of the Remaining Royalty Interests at any time prior to the sixtieth day following the date of the Unitholder Meeting (at which the Unitholders approve the termination of the Trust). BROG has agreed in the Purchase Agreement that it will, and will cause its directors, employees, officers and financial and legal advisors to, cease immediately and cause to be terminated all activities, discussions or negotiations, if any, with any persons conducted heretofore with respect to any proposal by any person to acquire the Interests, or any interest therein. In addition to the foregoing, to the extent the amount of certain "Price Credits" in the "Price Credit Accounts" under the Gas Contract decreases as measured at certain points in time from the Effective Time through the Gas Contract termination date, BRTI shall pay to San Juan an amount equal to such difference. If such Price Credits have increased over such time periods, San Juan shall pay to BRTI an amount equal to such difference. A copy of the Purchase and Sale Agreement is included as an exhibit to San Juan's Amendment No. 26 to Schedule 13D dated October 21, 1998, and all references to the Purchase Agreement herein are qualified in their entirety by reference to such Agreement. TERMINATION OF THE TRUST AS PROPOSED BY THE TERMINATION PROPOSAL Termination of the Trust. According to the terms of the Trust Agreement, the Trust may terminate prior to January 1, 2003, only upon the affirmative vote in favor of termination of the Trust by the holders of at least 662/3% of the outstanding Units. A meeting of the Unitholders may be called by Unitholders owning of record not less than 10% of the then outstanding Units. San Juan currently beneficially owns more than 662/3% of the outstanding Units. Meeting of Unitholders. Pursuant to the Purchase Agreement, San Juan agreed that, in its capacity as a record owner of at least 10% of the outstanding Units, it would call a meeting (or request that a meeting be called) of the Unitholders (the "Unitholder Meeting") to be held as soon as reasonably practicable under the circumstances for the purpose of voting on the termination of the Trust in accordance with Article VIII and Section 9.02 of the Trust Agreement. On October 29, 1998, San Juan delivered notice to the Trustee stating its desire to call as soon as practicable, a meeting of the Unitholders to consider and vote upon the Termination Proposal. - 13 - 25 As required under the Trust Agreement, the notice of the meeting must be distributed at least 20, but not more than 60, days prior to the date of the meeting. At the meeting of the Unitholders as described in the Information Statement, San Juan intends to vote any and all Units owned by it or over which it has voting control at the time of such meeting in favor of the Termination Proposal. At the meeting, if the holders of at least 662/3% of the Units vote in favor of the Termination Proposal, it is expected that the Trustee will commence the liquidation process in accordance with the terms of the Trust Agreement, and the Trust will continue until all of the affairs of the Trust are liquidated and wound up in accordance with Article IX of the Trust Agreement. In connection with the meeting, San Juan is not soliciting proxies from the Unitholders to vote on the Termination Proposal. In connection with the meeting of Unitholders, the Purchase Agreement obligates San Juan to (i) prepare (or cause to be prepared) and use (alone or with others) its commercially reasonable efforts to have cleared by the Commission as promptly as practicable such information regarding the Termination Proposal as is required to be included in a proxy or information statement and all other proxy or informational materials to be filed with the Commission for such meeting and (ii) otherwise comply with all legal requirements applicable to it under federal (including, without limitation, the Exchange Act), state or local law and the rules of The New York Stock Exchange, Inc. applicable to it (including without limitation, the requirements applicable to it arising under the Trust Agreement). The Purchase Agreement provides that such filed material will include a statement that San Juan intends to vote its Units and the Units for which it controls the voting rights at the Unitholder meeting "for" approval of the Termination Proposal. Under the Purchase Agreement, BROG has agreed to notify the Trustee in writing pursuant to the Trust Agreement to prepare and file with the Commission, use its commercially reasonable efforts to have cleared by the Commission and thereafter mail to the Unitholders a definitive proxy or information statement of the Trust that includes a description of the Termination Proposal. The Purchase Agreement provides that when the statement has been cleared by the Commission for mailing, BROG (upon San Juan's request) shall notify the Trustee in writing to mail the definitive proxy or information statement, as applicable, to the Trust Unitholders as of the applicable record date. San Juan has agreed to use its reasonable best efforts to assure under the circumstances that the proxy or information statement and any amendments or supplements thereto will, when filed, comply as to form in all material respects with the requirements of the Exchange Act applicable to San Juan. San Juan has also agreed to use its reasonable best efforts to assure under the circumstances that, at the time the proxy or information statement or any amendment or supplement thereto is first mailed to the Unitholders and at the time such Unitholders vote on the approval of the Termination Proposal, the proxy or information statement, as supplemented or amended, if applicable, will, to San Juan's knowledge, not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. These representations and warranties, however, do not apply to statements or omissions included in the proxy or information statement or any amendment or supplement thereto based upon information furnished to San Juan by BROG or any other person for use (or incorporation by reference) therein. The Purchase Agreement provides that San Juan shall pay all reasonable costs (other than legal fees and expenses incurred by the Trustee or the Trust) incurred by BROG, BRI and their respective - 14 - 26 affiliates related to the preparation of this information statement or any other document that is required to be filed on behalf of the Trust with the Commission or mailed to Unitholders in connection with the transactions contemplated hereby. Liquidation Procedure. Set forth below is a summary of procedures concerning the liquidation of the Trust as currently provided in the Trust Agreement and assuming that the transactions contemplated by the Purchase Agreement have been consummated, including the assignment by BROG of its rights under the Trust Agreement to San Juan. Within five business days following the Termination Date, the Trust must (i) provide San Juan (as successor to BROG's and BRI's rights under the Trust Agreement) and the Delaware Trustee or its successor with written notice of the termination of the Trust and (ii) engage an investment banking firm (the "Advisor") to assist the Trustee in selling the Remaining Royalty Interests. The Purchase Agreement provides that the consummation of the transactions contemplated thereunder shall occur when all of the conditions to closing under the Purchase Agreement have been satisfied or waived, which is currently expected to be a date which is within ten days following the date of the approval of the Unitholders of the termination of the Trust. See "-- Closing under the Purchase Agreement" above. Under Section 9.03(c) of the Trust Agreement, San Juan (as successor to BROG's and BRI's rights under the Trust Agreement) may, but is not obligated to, make a written cash offer to purchase the Remaining Royalty Interests, which offer must be delivered to the Trustee within 60 days following the Termination Date (the "Option Period Termination Date"). It is the current intention of San Juan to waive its right to make an offer to purchase the Remaining Royalty Interests under Section 9.03(c) of the Trust Agreement; however, no assurances can be given that San Juan will waive its rights to make such an offer. If San Juan does make an offer to purchase the Remaining Royalty Interests, the Trustee must decide, based on the recommendation of the Advisor, whether to accept the offer. The Trustee must provide written notice to San Juan of its decision regarding any such offer by the later of (i) the Option Period Termination Date and (ii) the tenth business day after the date the Trustee receives San Juan's offer. The Trustee's notice must state that the Trustee (i) accepts the offer (which acceptance is conditional on the receipt of an opinion of the Advisor of the fairness of San Juan's offer to the Unitholders from a financial point of view) or (ii) defers action on the offer. If the Trustee accepts San Juan's offer, San Juan and the Trustee must use their best efforts to close the purchase within 30 days of San Juan's receipt of notice of acceptance. See also "Reasons for and Interest of San Juan in the Termination Proposal" below. If the Trustee defers action on San Juan's offer, such offer shall be deemed withdrawn and the Trustee must use its best efforts, with the Advisor's assistance, to obtain other cash offers for the Remaining Royalty Interests. The Trustee must notify San Juan of the highest acceptable offer (which under the Trust Agreement must be an all cash offer), if any, received by the Trust within 120 days following the Termination Date. Under Section 9.03(e) of the Trust Agreement, San Juan may, but is not obligated to, purchase all of the Remaining Royalty Interests (i) if the highest acceptable offer is more than 105% of San Juan's original offer under Section 9.03(c) of the Trust Agreement, or if San Juan did not make an offer under Section 9.03(c) of the Trust Agreement, for a cash purchase price equal to 105% of the highest acceptable offer and (ii) if the highest acceptable offer is equal to or less than 105% of San Juan's original offer under Section 9.03(c) of the Trust Agreement, for a cash purchase price equal to the - 15 - 27 highest acceptable offer. San Juan must provide written notice of its election to purchase the Remaining Royalty Interests under Section 9.03(e) of the Trust Agreement within five business days of San Juan's receipt of notice of the highest acceptable offer. San Juan and the Trustee must use their best efforts to close the purchase within 30 days of San Juan's receipt of notice of the highest acceptable offer. If no other acceptable cash offers are received for the Remaining Royalty Interests, the Trustee may request that San Juan submit another offer. If San Juan makes an offer, and the Trustee accepts it, the acceptance will be conditional upon receipt of an opinion of the Advisor of the fairness, from a financial point of view, of the offer to the Unitholders. Section 9.03(e) of the Trust Agreement provides that San Juan and the Trustee must use their best efforts to close the purchase within 30 days of San Juan's receipt of notice of acceptance of the offer. Pursuant to Section 9.03(g) of the Trust Agreement, if any assets or property of the Trust estate have not been sold, or no definitive agreement for their sale has been entered into, within one year after the Termination Date, the Trustee will cause the property to be sold at public auction to the highest cash bidder (which may be San Juan or any of its affiliates). Notice of such auction must be mailed to each Unitholder at least 30 days prior to the date thereof. More comprehensive information concerning meetings of the Unitholders and the termination and liquidation of the Trust is included in the Trust Agreement (which was filed as Exhibit 3.1 to the Registration Statement on Form S-3, Registration No. 33-61164, as amended, by BRI with the Commission on its own behalf and as sponsor of the Trust), and the information regarding such meetings and the termination and liquidation of the Trust set forth in this Information Statement is qualified in its entirety by reference to the Trust Agreement. REASONS FOR AND INTEREST OF SAN JUAN IN THE TERMINATION PROPOSAL General. San Juan is seeking to initiate proceedings to terminate the Trust pursuant to the Termination Proposal for the reasons set forth below. If San Juan is the successful bidder for the Trust's Remaining Royalty Interests, San Juan expects that it will receive certain benefits not realized generally by the Unitholders. In addition, San Juan expects to realize certain benefits that will be realized by all the Unitholders generally, even if San Juan is not the purchaser of the Remaining Royalty Interests. See "Interest of Unitholders in the Termination Proposal." It should be noted that no assurances can be given that the benefits expected to inure to San Juan or the Unitholders as set forth in this section and under "Interest of Unitholders in the Termination Proposal" below will ultimately be realized, and if so, the extent to which these benefits will be realized. The realization of the beneficial effects expected to occur as set forth below are based upon a number of factors and assumptions, any of which proven untrue or which do not occur, could adversely affect the outcome of the results anticipated below. For example, as noted in this discussion, no assurance can be given that San Juan will bid or offer to purchase the Remaining Royalty Interests, and if so, the terms thereof, or whether such purchase will ultimately be consummated. The failure of San Juan to effect such purchase may have the effect of negating the benefits which would otherwise be expected to be derived therefrom. The degree of the benefits expected to be realized from the section 29 tax credits may be subject to the tax treatment of a particular Unitholder and the matters set forth in "Summary of Federal Income Tax Consequences - Allocations After Vote to Terminate Trust" contained in the Information - 16 - 28 Statement to which this Annex A is attached. No assurances can be given that any ultimate purchaser of the Remaining Royalty Interests will attribute additional value to any or all of the factors discussed below (including the termination of the Gas Contract, the amendment of the Gathering Contract, and the non-distribution of the proceeds of production attributable to the Remaining Royalty Interests), and if so, whether any such additional value will be ultimately realized by the Unitholders. Benefits Expected from the Purchase of the Remaining Royalty Interests. It is the current intention of San Juan to offer to purchase the Remaining Royalty Interests following an affirmative vote of the Unitholders to terminate the Trust through the exercise of the rights under Section 9.03(e) of the Trust Agreement assigned from BROG as described above. See "Termination of the Trust as Proposed by the Termination Proposal -- Liquidation Procedure." However, whether San Juan will so offer, and if so, be successful, will be dependent on a number of factors, including the price and terms of the offers or bids received from any third party bidders. For these reasons, no assurances can be given that San Juan will offer, and if so, be successful in its efforts, to acquire the Remaining Royalty Interests. Assuming that San Juan acquires the Leases and other Interests from BROG in accordance with the Purchase Agreement and San Juan is the purchaser of the Remaining Royalty Interests from the Trust, then San Juan expects to benefit from the increased aggregate value of the combined Remaining Royalty Interests and the Leases. First, in the event that San Juan is successful in acquiring the Remaining Royalty Interests, it is anticipated that San Juan would seek to merge its title in and to the Remaining Royalty Interests into its title in and to the Leases acquired from BROG under the Purchase Agreement, so that the Remaining Royalty Interests would terminate and the value of the Leases would increase as a result of no longer being burdened thereby. Secondly, San Juan believes that by owning both the Remaining Royalty Interests and the Leases, the value of such interests will increase through San Juan's ability to influence the operations of the Underlying Properties. As owner of leasehold and working interests in the Underlying Properties, San Juan would have rights to consent to and participate in decisions concerning future exploration, development and exploitation of such interests to the extent of its interests therein. Following any merger of title of the Remaining Royalty Interests and such leasehold interests, San Juan may elect to sell or exchange such combined interests, or it may elect to retain such combined interests for its own account. San Juan would be entitled to any economic gain realized as a result of such sale or exchange and any increase in value accruing during San Juan's ownership of such combined interests. In addition, San Juan will be allocated a portion of the Section 29 tax credits generated by the Underlying Properties by virtue of its ownership of an economic interest in the Underlying Properties. San Juan will be able to monetize these Section 29 tax credits by selling or exchanging its economic interest, and thereby the entitlement to the Section 29 tax credits, in the Underlying Properties to an unrelated third party while retaining a production payment or by forming a partnership with an unrelated third party and shifting most of the Section 29 tax credits to the unrelated party through the utilization of special allocations within the partnership. See Annex C to the Information Statement for information concerning Section 29 tax credits as of August 31, 1998 prepared by the Trust's independent petroleum engineers. The Unitholders generally will not realize directly any of the benefits described above; however, the Unitholders may indirectly benefit from any increased value of the Remaining Royalty Interests as a result of the approval of the Termination Proposal and the resulting liquidation of the Trust, due to the increased values inherent in the combined interests perceived by a purchaser thereof. In addition to the - 17 - 29 benefits described above, San Juan expects that it will realize the benefits realized by the Unitholders generally in connection with the transactions contemplated under the Termination Proposal. See "Interest of Unitholders in the Termination Proposal." Benefits Expected if San Juan does not Purchase the Remaining Royalty Interests. If San Juan is not the purchaser of the Remaining Royalty Interests, then San Juan believes that it will benefit indirectly through its beneficial ownership of Units from the ultimate sale of the Remaining Royalty Interests following the termination and liquidation of the Trust as described herein. See "Interest of Unitholders in the Termination Proposal." In the event that San Juan is unsuccessful in acquiring the Remaining Royalty Interests and the Remaining Royalty Interests are sold to a third party bidder, then the leases subject thereto will continue to be burdened by the Remaining Royalty Interests pursuant to the terms of the Net Profits Interest Conveyance. Existing Interest in the Underlying Properties. Effective as of September 1, 1997, O'Sullivan Oil and Scully Oil & Gas Company acquired a 0.0572% non-operating working/0.05033% net revenue interest in the Underlying Properties. The president and sole shareholder of Scully Oil & Gas Company is Christopher P. Scully. Christopher P. Scully and O'Sullivan Oil are each affiliated with San Juan. See "Identity and Background" above. INTEREST OF UNITHOLDERS IN THE TERMINATION PROPOSAL General. San Juan believes that the termination and liquidation of the Trust and the effectuation of the other events set forth herein as part of the Termination Proposal will provide certain benefits to all of the Unitholders generally. San Juan believes that it, in its capacity as a Unitholder, will realize the benefits described herein. See "Reasons for and Interest of San Juan in the Termination Proposal -- General." Increase in Value of Units as a Result of the Termination Proposal. San Juan believes that the following aspects of the Termination Proposal will increase the value of the Remaining Royalty Interests, and in turn, the Units: (i) the elimination of the Price Credit Account; (ii) the amendment to the Gathering Agreement; and (iii) following the Termination Date, the value of the Remaining Royalty Interests will increase because the proceeds from production attributable to the Remaining Royalty Interests will be held for the ultimate purchaser of such interests. Under the Gas Contract currently in place, BRTI is obligated to purchase the gas attributable to BROG's Interests. The monthly price to be paid is subject to adjustment, but BRTI must pay a specified minimum price for the gas it purchases. However, BRTI is entitled to a credit when the minimum price exceeds the Index Price (as defined in the Gas Contract), and the amount of this credit is credited to the Price Credit Account (as defined in the Gas Contract). BRTI is entitled to recoup the credit in the Price Credit Account under certain circumstances when the Index Price exceeds the minimum price. When BRTI recoups amounts accrued in the Price Credit Account, distributions with respect to proceeds from the sale of production attributable to the interests of BROG in the Underlying Properties, as well as the Remaining Royalty Interests owned by the Trust, are resultingly reduced. San Juan understands that the amount of the Price Credit Account as of July 1, 1998 was approximately $4.116 million. The Gas Contract terminates upon the termination of the Trust, and at such time the credit in the Price Credit Account shall be eliminated without payment by San Juan, as successor in interest to BROG, or the Trust - 18 - 30 to BRTI. Thus, it is expected that the Trust, and in turn the Unitholders, will realize a benefit of approximately $3.9 million upon the termination of the Trust. In connection with and as part of the Termination Proposal, it is expected that the Gathering Agreement will be amended to provide a ceiling on gathering cost escalations and further to include a fixed amount escalator provision. Under the current terms of the Gathering Agreement, there are no ceilings on the escalation provisions, which if in place would have the effect of capping future costs of gathering natural gas. These amendments should benefit the ultimate purchaser of the properties, and indirectly the Unitholders, as positively affecting the value of the Remaining Royalty Interests. Following the Termination Date, in accordance with Section 9.03(f) of the Trust Agreement, neither the Trust nor the Unitholders will be entitled to any proceeds of production attributable to the Remaining Royalty Interests after the Termination Date. Instead, under the Trust Agreement, the purchaser of the Remaining Royalty Interests under Sections 9.03(c) through (e) of the Trust Agreement will be entitled to all such proceeds. However, even though the Unitholders will not directly receive distributions from the proceeds of production after the Termination Date, it is anticipated that the Unitholders should indirectly benefit from such proceeds when final distributions are made after the sale of the Remaining Royalty Interests. After the Termination Date, it is expected that the value of the Remaining Royalty Interests will increase due to the purchaser's right to the proceeds from production after the Termination Date. This increased value in the Remaining Royalty Interests should be passed through to the Unitholders following the sale of the Remaining Royalty Interests through the distribution of the net sales proceeds to the Unitholders. Potential Purchase of Remaining Royalty Interests by San Juan at a Premium. Finally, San Juan believes that implementation of the termination and liquidation process set forth in the Trust Agreement will benefit the Unitholders in two respects. First, as provided in Section 9.03(c) of the Trust Agreement, San Juan, by acquiring BROG's preferential right to bid for the Trust's properties, would have the right to make a preemptive bid for the Remaining Royalty Interests. However, San Juan currently intends to waive this right and allow third parties to bid for the Remaining Royalty Interests. However, San Juan will retain the right to bid in the subsequent auction process along with other third parties. Secondly, assuming that the Trustee has obtained third party offers for the purchase of the Remaining Royalty Interests, San Juan, as the successor to BROG's and BRI's interests under Section 9.03(e) of the Trust Agreement, will have the right to purchase the Trust's Remaining Royalty Interests for an amount equal to 105% of the highest bid amount. Thus, the Unitholders have the potential to realize an additional 5% over the highest bid amount if San Juan exercises this right. There can be no assurance given, however, that San Juan will exercise this right. See "Termination of the Trust as Proposed by the Termination Proposal -- Liquidation Procedure." POTENTIAL EFFECTS OF TERMINATION OF THE TRUST ON MARKET FOR THE UNITS; NYSE LISTING; EXCHANGE ACT REGISTRATION An affirmative vote to terminate and liquidate the Trust could adversely affect the liquidity and market value of the Units held by the public. Following such a vote but prior to the complete liquidation of the Trust, the Units may be delisted by the New York Stock Exchange ("NYSE"), and the registration of the Units under the Exchange Act may be terminated. Following the completion of a liquidation of - 19 - 31 the Trust, the Units shall be delisted from the NYSE and deregistered under the Exchange Act if they have not yet been so delisted and deregistered as of such time. According to the NYSE's published guidelines, the NYSE would consider delisting the Units if, among other things, (i) the operating assets of the Trust have been or are to be substantially reduced such as by sale, spin off, distribution, or discontinuance, or the Trust has ceased to be an operating company or discontinued a substantial portion of its operations or business; (ii) liquidation of the Trust has been authorized and the Trust is committed to proceed; or (iii) the registration of the Trust under the Exchange Act is no longer effective. In the event of the delisting of the Units by the NYSE, it is possible that, prior to the complete liquidation of the Trust, the Units would continue to trade on another securities exchange or in the over-the-counter market and that price quotations would be reported by such exchange, by the National Association of Securities Dealers, Inc. (the "NASD") through the NASD Automated Quotation System ("Nasdaq") or by other sources. The extent of the public market for Units and the availability of such quotations would, however, depend upon such factors as the number of Unitholders remaining at such time, the interest in maintaining a market in such Units on the part of securities firms, the possible termination of registration under the Exchange Act as described below and other factors. The Units will be delisted from the NYSE upon the completion of the liquidation of the Trust if they have not been so deregistered prior to such time. The Units are currently registered under the Exchange Act. The vote of the Unitholders to terminate the Trust may result in the Units becoming subject to deregistration under the Exchange Act. Registration of the Units under the Exchange Act may be terminated upon application of the Trust to the Commission if the Units are no longer listed on a national securities exchange and there are fewer than 300 Unitholders of record. Termination of registration of the Units under the Exchange Act would substantially reduce the information required to be furnished by the Trust to Unitholders and to the Commission and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act and the requirements of furnishing a proxy statement or information statement in connection with Unitholders' meeting pursuant to Section 14(a) or 14(c) of the Exchange Act, no longer applicable to the Trust. Furthermore, the ability of "affiliates" of the Trust and persons holding "restricted securities" of the Trust to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. In addition, if registration of the Units under the Exchange Act were terminated, the Units would no longer be eligible for listing or Nasdaq reporting. It is the present intention of San Juan to seek to cause the Trust to apply for termination of registration of the Units as soon as practicable under the circumstances following Unitholder approval of the termination of the Trust if the requirements for termination of registration are met. The Units will be deregistered under the Exchange Act upon the completion of the liquidation of the Trust if they have not been so deregistered prior to such time. The Units are presently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Units for the purpose of buying, carrying or trading in securities ("Purpose Loans"). Depending upon factors such as the number of record holders - 20 - 32 of the Units and the number and market value of publicly held Units, following the termination of the Trust, the Units may no longer constitute margin securities for purposes of the Federal Reserve Board's margin regulations and, therefore, could no longer be used as collateral for Purpose Loans made by brokers. In addition, if registration of the Units under the Exchange Act were terminated, the Units would no longer constitute margin securities. - 21 - 33 SCHEDULE I DIRECTORS, MANAGERS, EXECUTIVE OFFICERS OR CONTROLLING PERSONS OF THE ACQUIRORS 1. The Purchaser. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of the manager of the Purchaser. Except as set forth below, the manager does not own any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- O'Sullivan Oil O'Sullivan Oil is a Texas corporation with its principal executive offices at 910 Travis Street, Suite 2150, Houston, Texas 77002. The principal business of O'Sullivan Oil is oil and gas exploration and production. C. N. O'Sullivan, a United States citizen, is the controlling shareholder and the President of O'Sullivan Oil. His business address is 910 Travis Street, Suite 2150, Houston, Texas 77002. The principal employment of Mr. O'Sullivan for the preceding five years has been acting as President of O'Sullivan Oil. 2. EnCap B. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of EnCap B. Each of the persons listed below is a director of EnCap B. The business address of each director and executive officer, unless otherwise indicated below, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. Each of the persons listed below is a United States citizen. None of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Gary R. Petersen Gary R. Petersen is Vice President and Treasurer of EnCap B, the Vice President and Secretary/Treasurer of ECIC, and Managing Director of EnCap. His business address, and the business address of EnCap B, ECIC and EnCap, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and the principal business of all such entities is engaging in oil and gas investments. Mr. Petersen has been employed in the capacity of Managing Director of EnCap from 1988 to the present. In addition, Mr. Petersen is a director of ECIC, Equus II Corporation, Harken Energy Corporation and Nuevo Energy Corporation. The address of ECIC is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and its principal business is oil and gas investments. The address of Equus II Corporation is 2929 Allen Parkway, Suite 2500, Houston, Texas 77019, and its principal business is investing. The address of Harken Energy Corporation is 5605 N. MacArthur Blvd., Suite 400, Irving, Texas 75038, and its principal business is oil and gas exploration, development and production. The address of Neuvo Energy Company is 1331 Lamar, Suite 1650, Houston, Texas 77010, and its principal business is exploration for, and the acquisition, exploitation, development and production of crude oil and natural gas. D. Martin Phillips D. Martin Phillips is Vice President and Secretary of EnCap B and Managing Director of EnCap. His business address, and the business address of EnCap B and EnCap, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and the principal business of both such entities is engaging in oil and gas investments. Mr. Phillips has been employed in the capacity of Managing Director of EnCap from 1989 to the present. David B. Miller David B. Miller is Vice President of EnCap B and Managing Director of EnCap. His business address, and the business address of EnCap B and EnCap, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and the principal business of both such entities is engaging in oil and gas investments. Mr. Miller has been I-1 34 employed in the capacity of the Managing Director of EnCap from 1988 to the present. Robert L. Zorich Robert L. Zorich is President of EnCap B, President of ECIC, and Managing Director of EnCap. His business address, and the business address of EnCap B, ECIC and EnCap, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and the principal business of all such entities is engaging in oil and gas investments. Mr. Zorich has been employed in the capacity of Managing Director of EnCap from 1988 to the present. In addition, Mr. Zorich is a director of ECIC and Benz Energy, Ltd. The address of ECIC is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and its principal business is oil and gas investments. 3. ECIC. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of ECIC. Each of the persons listed below is a director of ECIC. The business address of each director and executive officer, unless otherwise indicated below, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. Each of persons listed below is a United States citizen. None of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Gary R. Petersen See Part 2 above. Robert L. Zorich See Part 2 above. 4. Energy Capital. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director of Energy Capital. None of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Peter C. Tudball C.B.E. Peter Tudball C.B.E. is a citizen of the United Kingdom. His business address is Casu Investments Ltd., London House, 53-54 Haymarket, London SW1Y 4RP. Mr. Tudball retired in 1993 as Managing Director and Vice Chairman of Graig Shipping PLC, which is in the shipping business. He is currently employed as a Non-executive Director of various companies. Sir Peter G. Cazalet Sir Peter G. Cazalet is a citizen of the United Kingdom. His business address is 15 Thames Walk, Hestor Road, London SW11 38G. Sir Cazalet retired in 1989 as Managing Director of British Petroleum. In addition, he retired in 1996 as Chairman of AVP PLC. He is currently employed as a Non-executive Director of P & O PLC and other companies. Leo G. Deschuyteneer Leo G. Deschuyteneer is a citizen of Belgium. Mr. Deschuyteneer is currently employed as Executive Director of Sofina SA, a financial holding company, and his business address and the address of Sofina SA is 38 Rue de Naples, B-1050, Brussels, Belgium. He is also currently employed as a Non-executive Director of other companies. I-2 35 Eugene Fiedorek Eugene Fiedorek, a United State citizen, is Managing Director of EnCap. The business address of EnCap is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002, and the principal business EnCap is engaging in oil and gas investments. Mr. Fiedorek has been employed in the capacity of Managing Director of EnCap from 1988 to the present. In addition, Mr. Fiedorek is a director of Apache Corporation, Aviva Petroleum, Inc. and Matador Petroleum Corp. The address of Apache Corporation is One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400, and its principal business is the exploration, development and production of natural gas, crude oil and natural gas liquids. The address of Aviva Petroleum, Inc. is 8235 Douglas Avenue, Suite 400, Dallas, Texas 75225, and its principal business is the exploration, production and development of oil and gas. The address of Matador Petroleum Corp. is 8340 Meadow Road #158, Dallas, Texas 75231, and its principal business is oil and gas exploration and development. Alan B. Henderson Alan B. Henderson is a citizen of the United Kingdom. Mr. Henderson is currently employed as Chairman of Ranger Oil (UK) Ltd. and his business address and the address of Ranger Oil (UK) Ltd. is Ranger House, Walnut Tree Close, Guildford, Surrey GU1 4US. He is also currently employed as a Non-executive Director of other companies. James F. Ladner James F. Ladner is a citizen of Switzerland. Mr. Ladner is Executive Director of RP & C International, an investment banker, and his business address and the address of RP & C International is Gartenstrasse 10, CH-8002, Zurich, Switzerland. He is also currently employed as a Non-executive Director of other companies. Gary R. Petersen See Part 2 above. William W. Vanderfelt William W. Vanderfelt is a citizen of the United Kingdom. Mr. Vanderfelt is Managing Partner of Petercam S.A., a stock brokerage firm, and his business address and the address of Petercam S.A. is 19 Place Sainte-Gudule, B-1000, Brussels, Belgium. 5. EnCap. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each member and managing director of EnCap. Each managing director is a member of EnCap. The business address of each member and managing director, unless otherwise indicated below, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. Each member and managing director of EnCap is a United States citizen. None of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Eugene C. Fiedorek See Part 4 above. David B. Miller See Part 2 above. D. Martin Phillips See Part 2 above. Gary R. Petersen See Part 2 above. Robert L. Zorich See Part 2 above. I-3 36 6. Banc One Capital Partners VIII, Ltd. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each manager of Banc One Capital Partners VIII, Ltd. Each of the managers of Banc One Capital Partners VIII, Ltd. is a United States citizen. None of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- David R. Meuse David R. Meuse is Chairman, President and Chief Executive Officer of Banc One Capital Holdings Corporation. His business address, and the address of Banc One Capital Holdings Corporation, is 150 E. Gay Street, 24th Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Holdings Corporation is investments. Mr. Meuse has been employed in the capacity of Chairman, President and Chief Executive Officer of Banc One Capital Holdings Corporation since 1993. James J. Henson James J. Henson is Executive Vice President of Banc One Capital Holdings Corporation and Executive Vice President of BOCP Holdings Corporation. His business address, and the address of Banc One Capital Holdings Corporation, is 150 E. Gay Street, 24th Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Holdings Corporation is investments. Mr. Henson has been employed in the capacity of Executive Vice President of Banc One Capital Holdings Corporation since 1993. Michael J. Endres Michael J. Endres is Vice Chairman of Banc One Capital Corporation and Chairman and President of BOCP Holdings Corporation. His business address, and the address of Banc One Capital Holdings Corporation, is 150 E. Gay Street, 24th Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Holdings Corporation is investments. Mr. Endres has been employed in the capacity of Vice Chairman of Banc One Capital Corporation since 1992. The address of BOCP Holdings Corporation is 150 E. Gay Street, Columbus, Ohio 43215, and its principal business is investments. 7. BOCP Holdings Corporation. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director of BOCP Holdings Corporation. Directors are indicated by an asterisk (*). Each of the directors and executive officers of BOCP Holdings Corporation is a United States citizen. None of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Michael J. Endres* See Part 6 above. William P. Boardman* William P. Boardman is Senior Vice President of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43215. The principal business of BANC ONE CORPORATION is banking. Mr. Boardman has been employed with BANC ONE CORPORATION for the preceding five years. I-4 37 Ronald D. Brooks* Ronald D. Brooks has been Chairman, President and Chief Executive Officer of Banc One Capital Corporation since 1993. His business address, and the address of Banc One Capital Corporation, is 150 E. Gay Street, 22nd Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Corporation is investments. Prior to 1993, Mr. Brooks was Vice Chairman of Banc One Capital Corporation. Frederick L. Cullen* Frederick L. Cullen is President and Chief Operating Officer of Banc One Ohio Corporation. His business address, and the address of Banc One Ohio Corporation, is 100 E. Broad Street, Columbus, Ohio 43215, and its principal business is owning and managing Bank One, N.A. and Bank One Trust Company. Mr. Cullen has been employed with Banc One Ohio Corporation for the preceding five years. G. Lee Griffin* G. Lee Griffin is Chairman and Chief Executive Officer of Banc One Louisiana Corporation. His business address, and the address of Banc One Louisiana Corporation, is Bank One Tower - Suite 2100, 451 Florida Street, Baton Rouge, Louisiana 70801. The principal business of Banc One Louisiana Corporation is owning and managing Bank One, Louisiana. Mr. Griffin has been employed with Banc One Louisiana Corporation, or its predecessor, Premier Bancorp, for the preceding five years. Daniel J. Jessee* Daniel J. Jessee has been Vice Chairman of Banc One Capital Corporation since 1994. His business address, and the address of Banc One Capital Corporation, is 150 E. Gay Street, 22nd Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Corporation is investments. Prior to 1994, Mr. Jessee was Managing Director of Banc One Capital Corporation. David J. Kundert* David J. Kundert has been Chairman and Chief Executive Officer of Banc One Investment Management Group, or its predecessor, since 1995. His business address, and the address of Banc One Investment Management Group, is 1111 Polaris Parkway-B2, Columbus, Ohio 43240. The principal business of Banc One Investment Management Group is acting as a fiduciary branch, managing trusts for business and individual clients and managing client 401(k)s. Mr. Kundert is also President and Chief Executive Officer of Banc One Investment Advisors Corporation. The business address of Banc One Investment Advisors Corporation is 1111 Polaris Parkway-B2, Columbus, Ohio 43240. The principal business of Banc One Investment Advisors Corporation is acting as an investment advisory affiliate and managing BANC ONE CORPORATION's 401(k) plan and mutual funds. Mr. Kundert has been employed in the capacity of Chairman and Chief Executive Officer of Banc One Investment Advisors Corporation since 1992. Robert F. B. Logan* Robert F. B. Logan is currently retired. From 1995 to his retirement in 1996, Mr. Logan was President and Chief Executive Officer of Bank One, Arizona. His address, and the address of Bank One, Arizona, is 241 North Central - 36th Floor, Phoenix, Arizona 85004. The principal business of Bank One, Arizona is banking. From 1992 to 1995, Mr. Logan was retired. Donald L. McWhorter* Donald L. McWhorter is currently retired. Prior to his retirement in 1994, Mr. McWhorter was employed with BANC ONE CORPORATION. His address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43215. The principal business of BANC ONE CORPORATION is banking. I-5 38 David R. Meuse* See Part 6 above. James V. Pickett* James V. Pickett is Vice Chairman of Banc One Capital Corporation. His business address, and the address of Banc One Capital Corporation, is 150 E. Gay Street, 22nd Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Corporation is investments. Mr. Pickett has been employed in the capacity of Vice Chairman of Banc One Capital Corporation since 1993. Prior to February 1993, Mr. Pickett was Chairman of Pickett Companies. The address of Pickett Companies is 150 E. Gay Street, 22nd Floor, Columbus, Ohio 43215, and its principal business is real estate asset management. William E. Roberts* William E. Roberts is Vice Chairman of Banc One Capital Corporation. His business address, and the address of Banc One Capital Corporation, is 150 E. Gay Street, 22nd Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Corporation is investments. Mr. Roberts has been employed in the capacity of Vice Chairman of Banc One Capital Corporation since 1993. Prior to this position, Mr. Roberts was Chairman of Pickett Companies. The business address of Pickett Companies is 150 E. Gay Street, 22nd Floor, Columbus, Ohio 43215. Ronald G. Steinhart* Ronald G. Steinhart has been Chairman and Chief Executive Officer of Banc One Commercial Banking Group since 1996. His business address, and the address of Banc One Commercial Banking Group, is 150 E. Gay Street, Columbus, Ohio 43215. The principal business of Banc One Commercial Banking Group is commercial banking. From 1992 to 1996, Mr. Steinhart was President of Bank One, Texas. The business address of Bank One, Texas is 1717 Main Street, Dallas, Texas 75201. The principal business of Bank One, Texas is banking. 8. Banc One Capital Holdings Corporation. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of Banc One Capital Holdings Corporation. Directors are indicated by an asterisk (*). Each of the directors and executive officers of Banc One Capital Holdings Corporation is a United States citizen. None of such individuals owns any Units. John B. McCoy* John B. McCoy is Chairman of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43215. The principal business of BANC ONE CORPORATION is banking. In addition, Mr. McCoy serves as a director of Cardinal Health, Inc., Ameritech Corporation, Federal Home Loan Mortgage Corporation and Tenneco, Inc. The address of Cardinal Health, Inc. is 5555 Glendon Court, Dublin, Ohio 43016, and its principal business is the wholesale distribution of pharmaceuticals and related health care products. The address of Ameritech Corporation is 30 South Wacker Drive, Chicago, Illinois 60606, and its principal business is communications services. The address of Federal Home Loan Mortgage Corporation is 8200 Jones Branch Drive, McLean, Virginia 22102, and its principal business is providing residential mortgages. The address of Tenneco, Inc. is 1275 King Street, Greenwich, Connecticut 06831, and its principal business is manufacturing automotive parts and packaging. Mr. McCoy has been employed with BANC ONE CORPORATION for the preceding five years. David R. Meuse* See Part 6 above. I-6 39 James J. Henson* See Part 6 above. Ronald D. Brooks* See Part 7 above. David J. Kundert* See Part 7 above. Michael J. Endres* See Part 6 above. Brad L. Pospichel Brad L. Pospichel has been Executive Vice President and Treasurer of Banc One Capital Holdings Corporation since 1993. His business address, and the address of Banc One Capital Holdings Corporation, is 150 E. Gay Street, 24th Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Holdings is investments. Prior to 1993, he was Treasurer of Banc One Capital Corporation. The address of Banc One Capital Corporation is 150 E. Gay Street, 24th Floor, Columbus, Ohio 43215, and its principal business is investments. Carter K. McDowell Carter K. McDowell has been Senior Vice President and Director of Compliance of Banc One Capital Holdings Corporation since September 1997. His business address, and the address of Banc One Capital Holdings, is 150 E. Gay Street, 24th Floor, Columbus, Ohio 43215. The principal business of Banc One Capital Holdings is investments. From 1992 to September 1997, Mr. McDowell was Practice Group Head for Regulatory and Compliance (Legal Department) for BANC ONE CORPORATION. The address of BANC ONE CORPORATION is 100 E. Broad Street, Columbus, Ohio 43215, and its principal business is banking. 9. BANC ONE CORPORATION. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of BANC ONE CORPORATION. Directors are indicated by an asterisk (*). Each of the directors and executive officers of BANC ONE CORPORATION is a United States citizen. To the knowledge of Acquirors, none of such individuals owns any Units. Bennett Dorrance* Bennett Dorrance is an investor and Chairman and Managing Director of DMB Associates. His business address, and the address of DMB Associates, is 410 North 44th Street, Phoenix, Arizona 85008. The principal business of DMB Associates is real estate investment and development. Mr. Dorrance also serves as Vice Chairman of Campbell Soup Company, Inc. and is a director of UDC Homes, Inc. The address of Campbell Soup Company, Inc. is Campbell Place, Camden, New Jersey 08103-1799, and its principal business is the manufacturing and marketing of convenience food products. The address of UDC Homes, Inc. is 6710 North Scottsdale Road, Scottsdale, Arizona 85253, and its principal business is home construction. Charles E. Exley, Jr.* Charles E. Exley, Jr. is a Corporate Director of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. In addition, Mr. Exley is a director of Merck & Co., Inc. The address of Merck & Co. is One Merck Drive, Whitehouse Station, New Jersey, 08889-0100, and its principal business is pharmaceuticals. I-7 40 E. Gordon Gee* E. Gordon Gee is President of The Ohio State University. His business address, and the address of The Ohio State University, is Columbus, Ohio 43210. In addition, Dr. Gee is a director of Abercrombie & Fitch, Inc., ASARCO, Inc., Columbia Gas of Ohio, Glimcher Realty Trust, Intimate Brands, Inc. and The Limited, Inc. The address of Abercrombie & Fitch, Inc. is Four Limited Parkway East, P.O. Box 182168 Reynoldsburg, Ohio 43218, and its principal business is the purchase, distribution and sale of men's and women's casual apparel. The address of ASARCO, Inc. is 180 Maiden Lane, New York, New York 10038, and its principal business is the production of nonferrous metals, specialty chemicals and aggregates. The address of Columbia Gas of Ohio is 200 Civic Center Drive South, Columbus, Ohio 43215 and its principal business is gas operations. The address of Glimcher Realty Trust is 20 South Third Street, Columbus, Ohio 43215, and its principal business is owning, leasing, acquiring, developing and operating enclosed regional malls, community shopping center properties and single tenant retail properties. The address of Intimate Brands, Inc. is Three Limited Parkway, P.O. Box 16000, Columbus, Ohio 43216, and its principal business is the purchase, distribution and sale of lingerie, personal care products and women's apparel. The address of The Limited, Inc. is Three Limited Parkway, P.O. Box 16000, Columbus, Ohio 43216, and its principal business is the purchase, distribution and sale of women's apparel, lingerie, men's apparel, personal care products, children's apparel and a wide variety of sporting goods. John R. Hall* John R. Hall has been retired since 1996. From 1992 to 1996, Mr. Hall was Chairman and Chief Executive Officer of Ashland, Inc. His business address, and the address of Ashland, Inc., is 1000 Ashland Drive, Russell, Kentucky 41169. The principal business of Ashland, Inc. is oil refining and the manufacturing and distribution of chemicals. Mr. Hall also serves as a director of Reynolds Metals Company, Humana Inc., CSX Corporation and UCAR International, Inc. The address of Reynolds Metals Company is 6601 W. Broad Street, Richmond, Virginia 23261, and its principal business is the manufacturing of aluminum. The address of Humana Inc. is 500 West Main Street, Louisville, Kentucky 40202, and its principal business is managed health care products. The address of CSX Corporation is 901 East Cary Street, Richmond, Virginia 23219-4031, and its principal business is rail freight transportation and distribution services. The address of UCAR International is 39 Old Ridgebury Road, Danbury, Connecticut 06817-0001, and its principal business is the manufacture of graphite and carbon electrodes. Laban P. Jackson, Jr.* Laban P. Jackson, Jr. is Chairman and Chief Executive Officer of Clear Creek Properties, Inc. His business address, and the address of Clear Creek Properties, Inc., is 101 Prosperous Place, Lexington, Kentucky 40509. The principal business of Clear Creek Properties, Inc. is real estate development. John W. Kessler* John W. Kessler is Chairman of The New Albany Company. The principal business of The New Albany Company is real estate development. In addition, Mr. Kessler has been Chairman of Marsh & McLennan Real Estate Advisors, Inc., a real estate development company since 1980, and Chairman of John W. Kessler Company, a real estate development company, since 1975. Mr. Kessler has been employed with The New Albany Company for the preceding five years. Richard J. Lehmann* Richard J. Lehmann has been President of BANC ONE CORPORATION since 1995 and Chief Operating Officer of BANC ONE CORPORATION since 1996. I-8 41 His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. From 1991 to 1995, Mr. Lehmann was Chairman and Chief Executive Officer of Banc One Arizona Corporation (formerly, Valley National Corporation) and Bank One, Arizona, N.A. (formerly, Valley National Bank). The address of Banc One Arizona Corporation is 201 North Central Avenue, Phoenix, Arizona 85004, and its principal business is owning and managing Banc One Arizona, N.A., Bank One, Utah, N.A. and Banc One Arizona Investment Corporation. The address of Bank One, Arizona, N.A. is 241 North Central --36th Floor, Phoenix, Arizona 85004, and its principal business is banking. John B. McCoy* See Part 8 above. John G. McCoy* John G. McCoy is Chairman of the BANC ONE CORPORATION Executive Committee. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Mr. McCoy has been employed with BANC ONE CORPORATION for the preceding five years. Thekla R. Shackelford* Thelka R. Shackelford is an education consultant. In addition, Ms. Shackelford is a director of Wendy's International, Inc. and Fiserv Inc. The address of Wendy's International, Inc. is P.O. Box 256, 4288 West Dublin-Granville Road, Dublin, Ohio 43017-0256, and its principal business is quick service restaurants. The address of Fiserv Inc. is 255 Fiserv Drive, Brookfield, Wisconsin 53045, and its principal business is computer technology and related products. Ms. Shackelford has been an education consultant for the preceding five years. Alex Shumate* Alex Shumate is Office Managing Partner of the Columbus office of Squire, Sanders & Dempsey. His business address, and the address of Squire, Sanders & Dempsey, is 41 South High Street, #1300, Columbus, Ohio 43215. Squire, Sanders & Dempsey are attorneys-at-law. Mr. Shumate has been employed with Squire, Sanders & Dempsey for the preceding five years. Frederick P. Stratton, Jr* Frederick P. Stratton, Jr. is Chairman and Chief Executive Officer of Briggs & Stratton Corporation. His business address, and the address of Briggs & Stratton Corporation, is 12301 West Wirth Street, Wauwatosa, Wisconsin 53222. The principal business of Briggs & Stratton Corporation is the manufacture of air cooled gasoline engines for outdoor power equipment. Mr. Stratton is also a director of Midwest Express Holdings, Inc., Weyco Group, Inc., Wisconsin Electric Power Company and Wisconsin Energy Corporation. The address of Midwest Express Holdings, Inc. is 6744 South Howell Avenue, Oak Creek, Wisconsin 53154, and its principal business is the operation of a single-class, premium service passenger jet airline. The address of Weyco Group, Inc. is 234 E. Reservoir Avenue, P.O. Box 1188, Milwaukee, Wisconsin 53201, and its principal business is the manufacture, purchase and distribution of men's footwear. The address of Wisconsin Electric Power Company is 231 West Michigan Street, P.O. Box 2045, Milwaukee, Wisconsin 53201, and its principal business is electric, gas and steam utilities. The address of Wisconsin Energy Corporation is 231 West Michigan Street, P.O. Box 2949, Milwaukee, Wisconsin 53201, and its principal business is electric, gas and steam utilities. I-9 42 Robert D. Walter* Robert D. Walter is Chairman and Chief Executive Officer of Cardinal Health, Inc. His business address, and the address of Cardinal Health, Inc., is 5555 Glendon Court, Dublin, Ohio 43016. The principal business of Cardinal Health, Inc. is the wholesale distribution of pharmaceuticals and related health care products. Mr. Walter is also a director of Karrington Health, Inc. and Westinghouse Electric Corporation. The address of Karrington Health, Inc. is 919 Old Henderson Road, Columbus, Ohio 43220 and its principal business is developing, owing and operating assisted living residences. The address of Westinghouse Electric Corporation is Westinghouse Building, 11 Stanwix Street, Pittsburgh, Pennsylvania 15222-1384, and it is a global company operating in the fields of entertainment, technology and industry. John C. Tolleson* John C. Tolleson was formerly Chairman and Chief Executive Officer of First USA, Inc. His business address, and the address of First USA, Inc., is 1601 Elm Street, 47th Floor, Dallas, Texas 75201. The principal business of First USA, Inc. is issuing credit cards and providing other credit-related services. In addition, Mr. Tolleson was Chairman and Chief Executive Officer of First USA Financial, Inc. The principal business of First USA Financial, Inc. is conducting the operations of First USA, Inc. Mr. Tolleson was also a director of First USA Bank and First USA Federal Savings Bank. The principal business of First USA Bank is issuing credit cards. The principal business of First USA Federal Savings Bank is providing financial services to card holders. Mr. Tolleson is also a chairman of First USA Paymentech, which is a payment processor. The address of First USA Financial, Inc., First USA Bank, First USA Federal Savings Bank and First USA Paymentech is 1601 Elm Street, 47th Floor, Dallas, Texas 75201. John F. Havens* John F. Havens is an honorary director of BANK ONE CORPORATION. He is currently retired. Prior to his retirement, he was chairman of BANC ONE CORPORATION. The address of BANC ONE CORPORATION is 100 E. Broad Street, Columbus, Ohio 45271, and its principal business is banking. Steven A. Bennett Steven A. Bennett is Senior Vice President and General Counsel of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Mr. Bennett has been employed with BANC ONE CORPORATION for the preceding five years. William P. Boardman See Part 6 above. Bobby L. Doxey Bobby L. Doxey has been Senior Vice President and Controller of BANC ONE CORPORATION since May 1996. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Prior to 1996, Mr. Doxey served as Chief Financial Officer of Bank One, Texas, N.A. The principal business of Bank One, Texas, N.A. is banking, and its address is 1717 Main Street, Dallas, Texas 75201. Roman J. Gerber Roman J. Gerber is Executive Vice President of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Mr. Gerber has been employed with BANC ONE CORPORATION for the preceding five years. I-10 43 William C. Leiter William C. Leiter is Senior Vice President of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Mr. Leiter has been employed with BANC ONE CORPORATION for the preceding five years. Richard D. Lodge Richard D. Lodge is Senior Vice President of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Mr. Lodge has been employed with BANC ONE CORPORATION for the preceding five years. Michael J. McMennamin Michael J. McMennamin is Executive Vice President and Chief Financial Officer of BANC ONE CORPORATION. His business address, and the address of BANC ONE CORPORATION, is 100 E. Broad Street, Columbus, Ohio 43271. The principal business of BANC ONE CORPORATION is banking. Mr. McMennamin has been employed with BANC ONE CORPORATION for the preceding five years. 9. First Union Investors. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of First Union Investors. Each person listed below is a director of First Union Investors. Each of the directors and executive officers of First Union Investors is a United States citizen. To the knowledge of Acquirors, none of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Robert T. Atwood Robert T. Atwood is Executive Vice President and Chief Financial Officer of First Union Corporation and Executive Vice President of First Union Investors. His business address, the address of First Union Corporation, and the address of First Union Investors is One First Union Center, Charlotte, North Carolina 28288. First Union Corporation is registered as a bank holding company. The principal business of First Union Investors is engaging in various investment activities on behalf of First Union Corporation and its affiliates. Mr. Atwood has been employed with First Union Corporation for the preceding five years. Edward E. Crutchfield Edward E. Crutchfield is Chairman and Chief Executive Officer of First Union Corporation. His business address, and the address of First Union Corporation, is One First Union Center, Charlotte, North Carolina 28288. First Union Corporation is registered as a bank holding company. Mr. Crutchfield has been employed with First Union Corporation for the preceding five years. In addition, Mr. Crutchfield is a director of Bernhardt Industries, Inc., Liberty Corporation and V F Corporation. The address of Bernhardt Industries, Inc. is P.O. Box 740, Lenoir, North Carolina 28645, and its principal business is the manufacturing of furniture. The address for Liberty Corporation is Post Office Box 789, Wade Hampton Boulevard, Greenville, S. C. 29602, and its principal business is life insurance and television broadcasting. The address of V F Corporation is 1047 North Park Road, Wyomissing, Pennsylvania 19610, and its principal business is the design, manufacture and marketing of apparel. John R. Georgius John R. Georgius is President and Chief Operating Officer of First Union Corporation and President of First Union Investors. His business address, the address of First Union Corporation, and the address of First Union Investors is One First Union Center, Charlotte, North Carolina 28288. First Union I-11 44 Corporation is registered as a bank holding company. The principal business of First Union Investors is engaging in various investment activities on behalf of First Union Corporation and its affiliates. Mr. Georgius has been employed with First Union Corporation for the preceding five years. 10. First Union Corporation. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of First Union Corporation. Directors are indicated by an asterisk (*). Each of the directors and executive officers of First Union Corporation is a United States citizen. To the knowledge of Acquirors, none of such individuals owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- A. Dano Davis* A. Dano Davis is Chairman, Principal Executive Officer and a director of Winn-Dixie Stores, Inc. His business address, and the address of Winn-Dixie Stores, Inc., is 5050 Edgewood Court, Jacksonville, Florida 32254. The principal business of Winn-Dixie Stores, Inc. is retail grocery sales. Mr. Davis has been employed with Winn-Dixie Stores, Inc. for the preceding five years. In addition, Mr. Davis is a director of American Heritage Life Investment Corporation. The address of American Heritage Life Investment Corporation is American Heritage Life Building, 1776 American Heritage Life Drive, Jacksonville, Florida 32224, and its principal business is life insurance. Roddey Dowd, Sr.* Since April 1998, Roddey Dowd, Sr. has served as Chairman of the Executive Committee of Charlotte Pipe and Foundry Company. His business address, and the address of Charlotte Pipe and Foundry Company, is P.O. Box 35430, Charlotte, North Carolina 28235. The principal business of Charlotte Pipe and Foundry Company is manufacturing pipe and fittings. Mr. Dowd has been employed with Charlotte Pipe and Foundry Company for the preceding five years. In addition, Mr. Dowd is a director of Ruddick Corporation. The address of Ruddick Corporation is 2000 Two First Union Center, Charlotte, North Carolina 28282, and its principal business is a diversified holding company. William H. Goodwin, Jr.* William H. Goodwin, Jr. is Chairman of CCA Industries. His business address, and the address of CCA Industries, is 901 East Cary Street, Suite 1400, Richmond, Virginia 23219. The principal business of CCA Industries is manufacturing sports and other equipment. CCA Industries is also a diversified holding company. Mr. Goodwin has been employed with CCA Industries for the preceding five years. Mr. Goodwin is also a director of Bassett Furniture Industries, Incorporated. The address of Bassett Furniture Industries, Incorporated is 3525 Fairystone Park Highway, Bassett, Virginia 24055, and its principal business is manufacturing and selling furniture. Norwood H. Davis* Norwood H. Davis is Chairman of the Board, Chief Executive Officer and a director of Trigon Healthcare, Inc., a managed healthcare company. The address of Trigon Healthcare, Inc. is 2015 Staples Mill Road, Richmond, Virginia 23230. Mr. Davis has been employed by Trigon Healthcare, Inc. for the preceding five years. Mr. Davis is also a director of Hilb, Rogal and Hamilton Company. The address of Hilb, Rogal and Hamilton Company is 4235 Innslake Drive, Glen Allen, Virginia 23060, and it is a provider of insurance agents, brokers and services. I-12 45 Radford D. Lovett* Radford D. Lovett is Chairman of Commodores Point Terminal Corp. His business address, and the address of Commodores Point Terminal Corp, is 1600 Independent Square, Jacksonville, Florida 32202. The principal business of Commodores Point Terminal Corp is operating a marine terminal and a real estate management company. Mr. Lovett has been employed with Commodores Point Terminal Corp. for the preceding five years. In addition, Mr. Lovett is a director of American Heritage Life Investment Corporation, Florida Rock Industries, Inc., FRP Properties, Inc. and Winn-Dixie Stores, Inc. The address of American Heritage Life Investment Corporation is American Heritage Life Building, 1776 American Heritage Life Drive, Jacksonville, Florida 32224, and its principal business is life insurance. The address of Florida Rock Industries, Inc. is 155 East 21st Street, Jacksonville, Florida 32206, and its principal business is the production and sale of ready mixed concrete and the mining, processing and sale of sand, gravel and crushed stone. The address for FRP Properties, Inc. is 155 East 21st Street, Jacksonville, Florida 32206, and its principal business is transportation and real estate. The address of Winn-Dixie Stores, Inc. is 5050 Edgewood Court, Jacksonville, Florida 32254-3699, and its principal business is retail grocery sales. Randolph N. Reynolds* Randolph N. Reynolds is Vice Chairman and a director of Reynolds Metals Company. His business address, and the address of Reynolds Metals Company, is 6601 W. Broad Street, Richmond, Virginia 23261. The principal business of Reynolds Metals Company is the manufacturing of aluminum. Mr. Reynolds has been employed with Reynolds Metals Company for the preceding five years. G. Alex Bernhardt, Sr.* G. Alex Bernhardt, Sr. is Chairman and Chief Executive Officer of Bernhardt Furniture Company. His business address, and the address of Bernhardt Furniture Company, is P.O. Box 740, Lenoir, North Carolina 28645. The principal business of Bernhardt Furniture Company is the manufacturing of furniture. Prior to 1996, Mr. Bernhardt was President and Chief Executive Officer of Bernhardt Furniture Company. Mr. Bernhardt is also a director of Duke Energy Corporation. The address of Duke Energy Corporation is 422 S. Church Street, PB04G, Charlotte, North Carolina 28242, and it is an electric utility. W. Waldo Bradley* W. Waldo Bradley is Chairman of Bradley Plywood Corporation. His business address, and the address of Bradley Plywood Corporation, is P.O. Box 1408, Savannah, Georgia 31402-1408. The principal business of Bradley Plywood Corporation is wholesale distribution of building materials. Mr. Bradley has been employed with Bradley Plywood Corporation for the preceding five years. In addition, Mr. Bradley is a director of AGL Resources, Inc. The address for AGL Resources, Inc. is 303 Peachtree Street, N.E., Atlanta, Georgia 30308, and its principal business is the distribution of natural gas. Ernest E. Jones* Since October 1998, Ernest E. Jones has served as President and Chief Executive Officer of Private Industry Counsel. Private Industry Counsel is located at 1617 J.F.K. Boulevard, Philadelphia, Pennsylvania 19103. Prior to October 1998, Mr. Jones served as Executive Director of Greater Philadelphia Urban Affairs Coalition, located at 1207 Chestnut Street, Philadelphia, Pennsylvania 19107. Mr. Jones was employed by this Coalition for the five years preceding his current employment with Private Industry Counsel. Mackey J. McDonald* Mackey J. McDonald is President, Chief Executive Officer and a director of VF Corporation. His business address, and the address of VF Corporation, is I-13 46 1047 North Park Road, Wyomissing, Pennsylvania 19610. VF Corporation is a manufacturer of apparel. Mr. McDonald has been employed with VF Corporation for the preceding five years. Mr. McDonald is also a director of Hersey Foods Corporation. The address of Hershey Foods Corporation is P.O. Box 810, Hershey, Pennsylvania, 17033-0810, and its principal business is the production, marketing and distribution of sugar and confectionary products. Lanty L. Smith* Lanty L. Smith is Chairman of Precision Fabrics Group, Inc. His business address, and the address of Precision Fabrics Group, Inc., is 301 North Elm Street, Suite 600, Greensboro, North Carolina 27401. The principal business of Precision Fabrics Group, Inc. is the manufacturing of technical, high-performance textile products. Mr. Smith has been employed with Precision Fabrics Group, Inc. for the preceding five years. Mr. Smith is also Chairman of The Greenwood Group, Inc. and a director of Oakwood Homes Corporation. The address of Oakwood Homes Corporation is P.O. Box 7886, Gransboro, North Carolina, 27417-0386, and it is a vertically integrated manufacturer of mobile homes. Robert J. Brown* Robert J. Brown is Chairman, President and Chief Executive Officer of B&C Associates, Inc. His business address, and the address of B&C Associates, Inc., is P.O. Box 2636, High Point, North Carolina 27261. The principal business of B&C Associates, Inc. is public relations and marketing research. Mr. Brown has been employed with B&C Associates, Inc. for the preceding five years. In addition, Mr. Brown is also a director of Duke Energy Corporation, Republic Industries, Inc. and Sonoco Products Company. The address of Duke Energy Corporation is 422 S. Church Street, PB04G, Charlotte, North Carolina 28242, and it is an electric utility. The address of Republic Industries, Inc. is 110 S.E. 6th Street, Ft. Lauderdale, Florida 33301, and its principal business is refuse systems. The address for Sonoco Products Company is Post Office Box 160, Hartsville, South Carolina 29550-0160, and its principal business is the manufacture of paperboard-based and plastic-based packaging products. Terrence A. Larsen* Terrence A. Larsen is the retired Vice Chairman of First Union Corporation. For the preceding five years, Mr. Larsen was employed by CoreStates Financial Corporation and CoreStates Bank, N.A. and served as Chairman, President and Chief Executive Officer. Herbert Lotman* Herbert Lotman is Chairman, President and Chief Executive Officer of Keystone Foods Corporation, a food manufacturer and distributor. The address of Keystone Foods Corporation is 401 City Avenue, Suite 800, Bala Cynwyd, Pennsylvania 19004. Mr. Lotman has been employed by Keystone Foods Corporation for the preceding five years. Mr. Lotman is also a director of Vestaur Securities, Inc. The address of Vestaur Securities, Inc. is P.O. Box 7558, Philadelphia, Pennsylvania 19101, and it is an investment fund. Edward E. Crutchfield* See Part 10 above. R. Stuart Dickson* R. Stuart Dickson has been Chairman of the Executive Committee of Ruddick Corporation since 1994. He is also a director of Ruddick Corporation. His business address, and the address of Ruddick Corporation, is 2000 Two First Union Center, Charlotte, North Carolina 28282. Ruddick Corporation is a diversified holding company. Prior to 1994, he was Chairman of Ruddick Corporation. Mr. Dickson is also a director of Dimon Incorporated, PCA International Inc., Textron, Inc. and United Dominion Industries. The address of I-14 47 Dimon Incorporated is 512 Bridge Street, Danville, Virginia 24541, and its principal business is as a leaf tobacco merchant. The address of PCA International, Inc. is 815 Matthews-Mint Hill Road, Matthews, North Carolina 28105, and its principal business is the sale of photographic color portraits. The address of Textron, Inc. is 40 Westminster Street, Providence, Rhode Island 02903, and its principal business is manufacturing aerospace, consumer, industrial and other products. The address of United Dominion Industries is 2300 One First Union Center, 301 South College Street, Charlotte, North Carolina 28202-6039, and its principal business is engineering equipment for heating, air drying and purification, fluid handling, heat exchange, compaction, food processing, material handling equipment, steel doors and aerospace applications. B. F. Dolan* B. F. Dolan is an investor. His business address is 1990 Two First Union Center, Charlotte, North Carolina 28282. Prior to being an investor, Mr. Dolan was Chairman of Textron, Inc., in Providence, Rhode Island. Textron, Inc. manufactures aerospace, consumer, industrial and other products. In addition, Mr. Dolan is a director of FPL Group, Inc. and Polaris Industries, Inc. The address of FPL Group, Inc. is 700 Universe Boulevard, Juno Beach, Florida 33408, and it is a public utility holding company. The address of Polaris Industries, Inc. is 1225 Highway 169 North, Minneapolis, Minnesota 55441, and its principal business is manufacturing snowmobiles, recreational and utility vehicles, along with related accessories, clothing and replacement parts. John R. Georgius* See Part 10 above. Ruth G. Shaw* Ruth G. Shaw has been Executive Vice President and Chief Administrative Officer of Duke Energy Corporation since June 1997. Her business address, and the address of Duke Energy Corporation, is 422 S. Church Street, PB04G, Charlotte, North Carolina 28242. Duke Energy Corporation is an electric utility. Ms. Shaw has been employed by Duke Energy Corporation for the preceding five years. In addition, Ms. Shaw is a director of AppleSouth, Inc. and Texas Eastern Products Pipeline Company. The address of AppleSouth, Inc. is Hancock at Washington, Madison, Georgia 30650, and it is a restaurant operating company. Edward E. Barr* Edward E. Barr is Chairman of Sun Chemical Corporation. His business address, and the address of Sun Chemical Corporation, is 222 Bridge Plaza South, Fort Lee, New Jersey 07024. Sun Chemical Corporation is a graphic arts materials manufacturer. Mr. Barr has been employed with Sun Chemical Corporation for the preceding five years. In addition, Mr. Barr is a director of United Water Resources Inc. The address of United Water Resources Inc. is 200 Old Hook Road, Harrington Park, New Jersey 07640, and its principal business is ownership of regulated water and wastewater utilities. Arthur M. Goldberg* Arthur M. Goldberg is Executive Vice President (President of Gaming Operations) and a director of Hilton Hotels Corporation. His business address, and the address of Hilton Hotels Corporation, is 9336 Civic Center Drive, Beverly Hills, California 90210. The principal business of Hilton Hotels Corporation is lodging and casinos. Prior to 1996, Mr. Goldberg was Chairman, President and Chief Executive Officer of Bally Entertainment Corporation. The address of Bally Entertainment Corporation is 8700 West Bryn Mawr Avenue, Chicago, Illinois 60631, and its principal business is casinos and entertainment. In addition, Mr. Goldberg is a director of DiGiorgio Corporation. The address I-15 48 of DiGiorgio Corporation is 380 Middlesex Avenue, Carteret, New Jersey 07008, and it is an independent wholesale food distributor. Frank M. Henry* Frank M. Henry is Chairman of Frank Martz Coach Company. His business address, and the address of Frank Martz Coach Company, is P.O. Box 1007, Wilkes-Barre, Pennsylvania 18773. The principal business of Frank Martz Coach Company is bus transportation. Mr. Henry has been employed with Frank Martz Coach Company for the preceding five years. In addition, Mr. Henry is a director of Cable Michigan, Inc. and Commonwealth Telephone Enterprises, Inc. The address of Cable Michigan, Inc. is 105 Carnegie Center, Princeton, New Jersey 08540, and it is a diversified international telecommunications and high technology company. The address of Commonwealth Telephone Enterprises, Inc. is P.O. Box 800, Dallas, Pennsylvania 18612, and its principal business is diversified international telecommunications and high technology. Joseph Neubauer* Joseph Neubauer is Chairman and Chief Executive Officer of ARAMARK Corporation. His business address, and the address of ARAMARK Corporation, is ARA Tower, 1101 Market Street, Philadelphia, Pennsylvania 19107. The principal business of ARAMARK Corporation is provider or manager of food, leisure, uniform, health education and distribution services. Mr. Neubauer has been employed with ARAMARK Corporation for the preceding five years. Mr. Neubauer is also a director of Bell Atlantic Corporation and Federated Department Stores, Inc. The address for Bell Atlantic Corporation is 1717 Arch Street, Philadelphia, Pennsylvania 19103, and its principal business is telecommunications. The address for Federated Department Stores, Inc. is 151 West 34th Street, New York, New York 10001, and its principal business is the sale of apparel, cosmetics, home furnishings and other consumer goods. Patricia A. McFate* Patricia A. McFate is the Senior Scientist and Program Director of Center for National Security Negotiations of Science Applications International Corporation, a systems engineering company. The address of the Center is 1710 Goodridge Drive, McLean, Virginia 22102. Ms. McFate has been employed by this corporation for the preceding five years. James M. Seabrook* James M. Seabrook is Chairman and Chief Executive Officer of Seabrook Brothers and Sons, Inc., a frozen foods processor. The address of Seabrook Brothers and Sons, Inc. is 85 Finley Road, Seabrook, New Jersey 08302. Mr. Seabrook has been employed by this company for the preceding five years. Mr. Seabrook also serves as director of New Jersey Manufacturers Insurance Company and New Jersey Reinsurance Company. Raymond W. Smith* Raymond W. Smith is Chairman, Chief Executive Officer and director of Bell Atlantic Corporation, a telecommunications and services company. The address of Bell Atlantic Corporation is 1310 North Court House, Arlington, Virginia 22201. Mr. Smith has been employed by Bell Atlantic for the preceding five years. Mr. Smith also serves as director of USAirways Group, Inc., Westinghouse Electric Corp. and CBS Corporation. The address of USAirways Group, Inc. is 2345 Crystal Drive, Arlington, Virginia 22227, and its primary business is commercial aviation. Westinghouse Electric Corp. is located at 11 Stanwix Street, Pittsburgh, Pennsylvania 15222, and its principal business is the manufacture and distribution of engines and turbines. CBS Corporation is located at 51 West 52nd Street, New York, New York 10019, and it is a nationally recognized telephone and radio broadcasting company. I-16 49 Malcom S. McDonald* Now retired, Malcom S. McDonald was formerly Chairman and Chief Executive Officer of First Union National Bank -- VA/MD/DC. He served as Chairman of the Board and Chief Executive Officer of Signet Banking Corporation from December 1996 to November 1997, President and Chief Executive Officer from May 1996 to December 1996 and President and Chief Operating Officer prior to May 1996. His business address, and the address of First Union -- VA/MD/DC, is P.O. Box 25970, Richmond, Virginia 23260-5970. The principal business of First Union -- VA/MD/DC is banking. Charles M. Shelton, Sr.* Charles M. Shelton, Sr. is General Partner of The Shelton Companies. His business address, and the address of The Shelton Companies, is 301 S. College Street, Suite 3600, Charlotte, North Carolina 28202. The principal business of The Shelton Companies is investments. Mr. Shelton has been employed with The Shelton Companies for the preceding five years. Marion A. Cowell, Jr. Marion A. Cowell, Jr. is Executive Vice President, Secretary and General Counsel of First Union Corporation. His business address, and the address of First Union Corporation, is One First Union Center, Charlotte, North Carolina 28288. The principal business of First Union Corporation is a registered bank holding company. Mr. Cowell has been employed with First Union Corporation for the preceding five years. Robert T. Atwood See Part 10 above. B. J. Walker B. J. Walker is Vice Chairman of First Union Corporation. His business address, and the address of First Union Corporation, is One First Union Center, Charlotte, North Carolina 28288. First Union Corporation is registered as a bank holding company. Mr. Walker has been employed with First Union Corporation for the preceding five years. 12. Andover. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of the director and executive officer of Andover. The director and executive officer of Andover is a United States citizen. The director and executive officer does not own any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- A. John Knapp, Jr. A. John Knapp, Jr. is the President and Secretary of Andover. His business address, and the address of Andover, is 910 Travis Street, Suite 2205, Houston, Texas 77002. The principal business of Andover is real estate development. The principal employment of Mr. Knapp for the preceding five years has been acting as President of Andover. 13. O'Sullivan Oil. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of the director and executive officer of O'Sullivan Oil. The director and executive officer does not own any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- C. N. O'Sullivan C. N. O'Sullivan, a United States citizen, is the President and Secretary of O'Sullivan Oil. His business address is 910 Travis Street, Suite 2150, Houston, I-17 50 Texas 77002. The principal business of O'Sullivan Oil is oil and gas exploration and production. The principal employment of Mr. O'Sullivan for the preceding five years has been acting as President of O'Sullivan Oil. 14. Smith Funding. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each member and manager of Smith Funding. The business address of each member and manager, unless otherwise indicated below, is 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. Managers are indicated by an asterisk (*). None of the members or managers of Smith Funding owns any Units. Present Principal Occupation or Employment; Material Occupations, Name Positions, Offices or Employments for the Past Five Years ---- ----------------------------------------------------------------- Scott W. Smith* Scott W. Smith, a United States citizen, is a consultant to O'Sullivan Oil, and his business address and the business address of O'Sullivan Oil is 910 Travis Street, Suite 2150, Houston, Texas 77002. The principal business of O'Sullivan Oil is oil and gas exploration and production. From 1990 to 1996, Mr. Smith acted as land manager for Triad Energy Corporation, and from 1997 to present he has been Manager of Land/Marketing for O'Sullivan Oil. The business address of Triad Energy Corporation is 1616 Voss, Suite 650, Houston, Texas, 77057, and its principal business is oil and gas exploration and production. A. John Knapp, Jr.* See Part 12 above. R. Randall Grace* R. Randall Grace, a United States citizen has been an investment associate at Chilton Capital Management since 1997. Chilton Capital Management is a registered investment advisory firm. The business address of Chilton Capital Management, and Mr. Grace's business address, is 910 Travis Street, Suite 2200, Houston, Texas 77002. From September 1994 to January 1997, Mr. Grace was employed with Willowbrook Riding Stables, Inc., a New York corporation. The business address of Willowbrook Riding Stables, Inc. is Rural Route 1, Box 143, Clinton Corners, New York 12514, and its principal business is training and selling horses. Prior to September 1994, Mr. Grace was a student. Locke Investments, L.P. Locke Investments, L.P. is a Texas limited partnership with its principal L.P. executive offices at 910 Travis Street, Suite 2206, Houston, Texas 77002, and its principal business is real estate development. The general partner of Locke Investments, L.P. is James L. Goettee, Jr. Mr. Goettee, a United States citizen, is a principal in Andover Development, LLC, which is engaged in real estate development. His business address, and the address of Andover Development, LLC, is 910 Travis Street, Suite 2206, Houston, Texas 77002. Prior to joining Andover Development, LLC in 1996, Mr. Goettee was a student. Allen R. Schubert Allen R. Schubert, a United States citizen, is a principal of Schubert Properties, a real estate development company. His business address, and the address of Schubert Properties, is 1300 Post Oak Boulevard, Suite 1100, Houston, Texas 77056. Mr. Schubert has been engaged in real estate development for the past five years. Christopher L. Knapp Christopher L. Knapp, a United States citizen, is a partner in Chilton Capital Management, an investment advisory firm. His business address, and the address of Chilton Capital Management, is 910 Travis Street, Suite 2200, Houston, Texas 77002. Prior to joining Chilton Capital Management in 1996, Mr. Knapp had I-18 51 been employed since 1985 by Brown Brothers Harriman, an investment firm. The business address of Brown Brothers Harriman is 4900 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas. Breckinridge L. Knapp Breckinridge L. Knapp, a United States citizen, is an associate of Heritage Finance and Trust, an investment management firm. His business address, and the address of Heritage Finance and Trust, is 12 Cours des Bastions, 1205 Geneva, Switzerland. Prior to joining Heritage Finance and Trust in 1997, Mr. Knapp was employed by Citibank, #16 KQUAI, General Guissuu #1204, Geneva, Switzerland. The principal business of Citibank is commercial banking. I-19 52 ANNEX B RESERVE REPORT UPDATE (Attached) 53 [Letterhead of Netherland, Sewell & Associates, Inc.] November 9, 1998 Mr. Ron E. Hooper Burlington Resources Coal Seam Gas Royalty Trust NationsBank of Texas, N.A., Trustee NationsBank Plaza 901 Main Street, 17th Floor Dallas, Texas 75202 Dear Mr. Hooper: In accordance with your request, we have estimated, as of August 31, 1998, the (1) future net revenue to the Burlington Resources Coal Seam Gas Royalty Trust (Trust) net profits interest and (2) proved reserves to the Burlington Resources Oil & Gas Company (Burlington) interest in the Fruitland Coal Formation underlying the Northeast Blanco Unit, Rio Arriba and San Juan Counties, New Mexico, as listed in the accompanying tabulations. The Trust net profits interest is derived from the Burlington interest in such proved reserves. This report has been prepared using constant prices and costs and conforms to the guidelines of the Securities and Exchange Commission (SEC). The estimated net proved reserves in this report are defined as the portion of the gross reserves attributable to the Burlington interest to which the net profits interest is applied. As presented in the accompanying summary projection, Table I, we estimate the Burlington net reserves and future net revenue to the Trust net profits interest, as of August 31, 1998, to be: Burlington Net Reserves Trust Future Net Revenue ------------------------ --------------------------- Condensate Gas Present Worth Category (Barrels) (MCF) Total at 10% - ---------------- ---------- ---------- ----------- ------------- Proved Developed 0 67,837,801 $47,782,200 $29,766,200 Gas volumes are expressed in thousands of standard cubic feet (MCF) at the contract temperature and pressure bases. These properties no longer produce commercial volumes of condensate. This report includes a summary projection of reserves and revenue along with one-line summaries of reserves, economics, and basic data by lease. For the purposes of this report, the term "lease" refers to a single economic projection. The estimated reserves and future revenue shown in this report are for proved developed reserves only. Our study indicates that there are no proved undeveloped reserves for these properties at this time. 54 In accordance with SEC guidelines, our estimates do not include any value for probable or possible reserves which may exist for these properties. This report does not include any value which could be attributed to interests in undeveloped acreage. Future gross revenue in this report is to the Burlington interest prior to deducting state production taxes and ad valorem taxes. Future net revenue is the 95 percent net profits interest share to the Trust after deducting the Burlington working interest share of these taxes, future capital costs, and operating expenses, but before consideration of federal income taxes. Our estimates of future net revenue have not been adjusted to account for the Section 29 nonconventional fuels federal income tax credit. In accordance with SEC guidelines, the future net revenue has been discounted at an annual rate of 10 percent to determine its "present worth." The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the Trust net profits interest. For the purposes of this report, a field inspection of the properties has not been performed nor has the mechanical operation or condition of the wells and their related facilities been examined. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs which may be incurred due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment nor the cost of abandoning the properties. The gas price used in this report is based on the August 1998 net price received, adjusted for BTU content, gathering fee, and shrinkage. This price is also adjusted as specified in the gas purchase contract under provisions related to the sharing price and price credit account and is held constant in accordance with SEC guidelines. Lease and well operating costs are based on operating expense records provided by Burlington. These costs include the per-well overhead expenses allowed under joint operating agreements along with costs estimated to be incurred at and below the district and field levels. General and administrative overhead expenses of the Trustee are not included. Lease and well operating costs are held constant in accordance with SEC guidelines. Capital costs are included as required for workovers and production equipment. We have made no investigation of potential gas volume and value imbalances which may have resulted from overdelivery or underdelivery to the Burlington interest. Therefore, our estimates of reserves and future revenue do not include adjustments for the settlement of any such imbalances; our projections are based on Burlington receiving its net revenue interest share of estimated future gross gas production. The reserves included in this report are estimates only and should not be construed as exact quantities. They may or may not be recovered; if recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. The sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions included in this report due to governmental policies and uncertainties of supply and demand. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which legal or accounting, rather than engineering and geological, interpretation may be controlling. As in all aspects of oil and gas evaluation, there are uncertainties inherent 55 in the interpretation of engineering and geological data; therefore, our conclusions necessarily represent only informed professional judgments. The titles to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from Burlington Resources Oil & Gas Company and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. We are independent petroleum engineers, geologists, and geophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Basic geologic and field performance data together with our engineering work sheets are maintained on file in our office. Very truly yours, /s/ Frederic D. Sewell DDS:PJA 56 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT TOTAL PROVED DEVELOPED RESERVES SAN JUAN BASIN, NEW MEXICO GROSS REVENUE PERIOD GROSS NET GROSS NET INCL PROD+ADVAL TAXES PROD+AV NET CAP OPERATING NET CUM P.W. ENDING OIL/COND OIL/COND GAS GAS OIL GAS TOTAL TAXES INVSTMT EXPENSE REVENUE 10.000% - -------- MB------ MB------ MMF------ MMF----- M$------ M$------ M$------ M$----- M$----- M$------ M$------ M$------ 12-31-98 0.000 0.000 24878.838 4076.645 0.0 4037.9 4037.9 357.0 531.8 398.3 2590.0 2549.3 12-31-99 0.000 0.000 60197.523 9862.354 0.0 9768.7 9768.7 862.8 1063.6 977.2 6466.4 8505.3 12-31- 0 0.000 0.000 46543.500 7625.704 0.0 7553.4 7553.4 668.1 0.0 561.1 6008.7 13550.2 12-31- 1 0.000 0.000 37646.093 6168.834 0.0 6110.2 6110.2 540.3 0.0 560.1 4759.7 17182.8 12-31- 2 0.000 0.000 31287.295 5127.672 0.0 5078.7 5078.7 449.2 0.0 555.6 3870.8 19868.7 12-31- 3 0.000 0.000 26530.043 4348.692 0.0 4307.3 4307.3 381.1 0.0 550.1 3208.0 21892.5 12-31- 4 0.000 0.000 22829.727 3742.698 0.0 3706.7 3706.7 327.8 0.0 542.1 2695.6 23438.3 12-31- 5 0.000 0.000 19925.797 3267.102 0.0 3495.8 3495.8 309.1 0.0 542.1 2512.7 24747.9 12-31- 6 0.000 0.000 17501.727 2869.952 0.0 3245.0 3245.0 286.9 0.0 532.6 2303.8 25840.3 12-31- 7 0.000 0.000 15410.176 2527.123 0.0 2857.2 2857.2 253.3 0.0 510.3 1989.3 26697.9 12-31- 8 0.000 0.000 13650.536 2238.653 0.0 2530.8 2530.8 223.3 0.0 491.1 1725.3 27373.9 12-31- 9 0.000 0.000 12221.496 2004.417 0.0 2266.8 2266.8 200.3 0.0 487.8 1499.4 27908.1 12-31-10 0.000 0.000 10928.286 1792.340 0.0 2026.3 2026.3 180.2 0.0 476.6 1302.6 28329.9 12-31-11 0.000 0.000 9813.308 1609.474 0.0 1819.6 1819.6 161.8 0.0 470.1 1129.3 28662.5 12-31-12 0.000 0.000 8797.299 1442.805 0.0 1631.1 1631.1 144.3 0.0 460.1 975.5 28923.7 SUBTOTAL 0.000 0.000 358161.644 58704.465 0.0 60435.5 60435.5 5345.5 1595.4 8115.2 43037.1 28923.7 REMAING 0.000 0.000 55613.396 9133.336 0.0 10326.0 10326.0 912.5 0.0 4417.7 4745.1 29766.2 TOTAL OF 41.9 YRS 0.000 0.000 413775.040 67837.801 0.0 70761.5 70761.5 6258.0 1595.4 12532.9 47782.2 29766.2 CUM PROD 0.936 603206.094 ULTIMATE 0.936 1016981.134 BASED ON CONSTANT PRICES AND COSTS PRESENT WORTH PROFILE FOR 12.00 PCT, PRESENT WORTH M$ 27758.3 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL FOR 14.00 PCT, PRESENT WORTH M$ 26032.2 REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. FOR 18.00 PCT, PRESENT WORTH M$ 23216.9 FOR 20.00 PCT, PRESENT WORTH M$ 22055.6 NETHERLAND, SEWELL & ASSOCIATES, INC. - DALLAS & HOUSTON FOR 24.00 PCT, PRESENT WORTH M$ 20095.5 TABLE I 57 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NEW MEXICO TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------ ----------------- MB------ MB------ MMF----- MMF----- M$----- M$----- M$--- M$----- M$---- M$----- M$------ ---- N E W M E X I C O BASIN FIELD, RIO ARRIBA COUNTY 001111 NE BLANCO CAP CSTS 0.000 0.000 0.000 0.000 0.0 0.0 0.0 1595.4 0.0 -1595.4 -1521.7 1.0 001025 NE BLANCO UN 211 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001090 NE BLANCO UN 212 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001055 NE BLANCO UN 218 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001104 NE BLANCO UN 400 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001073 NE BLANCO UN 400R 0.000 0.000 7168.631 1182.824 0.0 1213.9 107.3 0.0 149.2 909.4 654.9 23.8 001076 NE BLANCO UN 401 0.000 0.000 2330.090 384.464 0.0 389.5 34.6 0.0 87.6 253.9 204.6 13.5 001002 NE BLANCO UN 402 0.000 0.000 1535.391 253.340 0.0 264.8 23.5 0.0 110.4 124.4 82.3 17.3 001008 NE BLANCO UN 403R 0.000 0.000 1964.669 324.170 0.0 332.9 29.8 0.0 99.5 193.9 147.0 15.5 001057 NE BLANCO UN 404R 0.000 0.000 2804.251 462.701 0.0 476.8 42.3 0.0 115.8 303.1 218.1 18.2 001068 NE BLANCO UN 406 0.000 0.000 3786.477 624.769 0.0 649.2 57.1 0.0 137.2 431.9 289.7 21.8 001044 NE BLANCO UN 407 0.000 0.000 1567.390 258.620 0.0 268.2 23.9 0.0 100.8 136.8 94.4 15.7 001101 NE BLANCO UN 408 0.000 0.000 2637.475 435.183 0.0 453.0 40.2 0.0 123.6 274.9 183.4 19.5 001069 NE BLANCO UN 409 0.000 0.000 4784.669 789.470 0.0 805.9 71.1 0.0 122.6 581.4 439.3 19.4 001028 NE BLANCO UN 410 0.000 0.000 1131.659 186.723 0.0 190.9 17.0 0.0 79.2 90.0 69.1 12.1 001029 NE BLANCO UN 411 0.000 0.000 3380.524 557.786 0.0 566.3 50.0 0.0 94.3 400.9 306.3 14.6 001039 NE BLANCO UN 412 0.000 0.000 11796.805 1946.473 0.0 2018.0 178.3 0.0 189.2 1567.8 1025.3 30.5 001075 NE BLANCO UN 413R 0.000 0.000 4464.899 736.708 0.0 773.5 68.2 0.0 155.1 522.6 317.1 24.8 001013 NE BLANCO UN 414 0.000 0.000 9974.495 1645.792 0.0 1716.8 151.8 0.0 172.8 1322.7 821.3 27.7 001001 NE BLANCO UN 415 0.000 0.000 1821.550 300.556 0.0 309.5 27.5 0.0 99.0 173.8 127.2 15.4 001085 NE BLANCO UN 416 0.000 0.000 1132.389 186.844 0.0 193.0 17.3 0.0 87.4 84.2 59.6 13.5 001074 NE BLANCO UN 417 0.000 0.000 2186.156 360.715 0.0 363.1 32.0 0.0 76.3 242.0 203.4 11.6 001051 NE BLANCO UN 418 0.000 0.000 7351.209 1212.950 0.0 1255.5 111.3 0.0 164.1 931.4 629.3 26.3 001024 NE BLANCO UN 419 0.000 0.000 7811.124 1288.835 0.0 1366.4 120.8 0.0 213.6 980.4 535.3 34.5 001046 NE BLANCO UN 420 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001005 NE BLANCO UN 421R 0.000 0.000 8308.509 1370.904 0.0 1409.7 124.9 0.0 159.7 1069.1 754.5 25.5 001045 NE BLANCO UN 422 0.000 0.000 3850.585 635.346 0.0 656.9 58.1 0.0 132.2 443.3 309.6 20.9 001007 NE BLANCO UN 423R 0.000 0.000 4467.034 737.061 0.0 766.5 67.9 0.0 144.7 526.5 346.3 23.0 001018 NE BLANCO UN 424 0.000 0.000 10812.623 1784.083 0.0 1842.3 163.0 0.0 179.3 1425.3 964.5 28.8 001009 NE BLANCO UN 425R 0.000 0.000 5681.151 937.390 0.0 988.8 87.5 0.0 170.8 694.1 400.8 27.4 001015 NE BLANCO UN 426 0.000 0.000 2268.782 374.349 0.0 386.8 34.2 0.0 110.5 229.9 164.1 17.3 001102 NE BLANCO UN 427R 0.000 0.000 4815.461 794.551 0.0 832.5 73.6 0.0 156.7 572.3 353.7 25.0 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 1 58 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NEW MEXICO TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ----------------- --- --- MB------ MMF------ ------- ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O BASIN FIELD, RIO ARRIBA COUNTY 001111 NE BLANCO CAP CSTS 0. 0. 0.000 0.000 18.620 18.620 0.000 0.000 0.00 0.00 0.99 0.99 0.0 0.0 001025 NE BLANCO UN 211 0. 1. 0.932 83.605 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001090 NE BLANCO UN 212 0. 1. 0.000 6.534 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001055 NE BLANCO UN 218 0. 1. 0.000 96.877 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001104 NE BLANCO UN 400 0. 1. 0.000 16.500 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001073 NE BLANCO UN 400R 0. 1. 0.000 13432.441 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001076 NE BLANCO UN 401 0. 1. 0.000 8408.331 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001002 NE BLANCO UN 402 0. 1. 0.000 11327.885 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001008 NE BLANCO UN 403R 0. 1. 0.000 7250.652 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001057 NE BLANCO UN 404R 0. 1. 0.000 9527.143 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001068 NE BLANCO UN 406 0. 1. 0.000 5877.589 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001044 NE BLANCO UN 407 0. 1. 0.000 5787.021 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001101 NE BLANCO UN 408 0. 1. 0.000 8270.947 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001069 NE BLANCO UN 409 0. 1. 0.000 18556.452 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001028 NE BLANCO UN 410 0. 1. 0.000 2138.794 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001029 NE BLANCO UN 411 0. 1. 0.000 14759.195 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001039 NE BLANCO UN 412 0. 1. 0.000 34108.424 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001075 NE BLANCO UN 413R 0. 1. 0.000 11868.214 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001013 NE BLANCO UN 414 0. 1. 0.000 23631.358 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001001 NE BLANCO UN 415 0. 1. 0.004 4109.788 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001085 NE BLANCO UN 416 0. 1. 0.000 3020.991 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001074 NE BLANCO UN 417 0. 1. 0.000 8164.881 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001051 NE BLANCO UN 418 0. 1. 0.000 20560.788 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001024 NE BLANCO UN 419 0. 1. 0.000 28684.176 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001046 NE BLANCO UN 420 0. 1. 0.000 175.328 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001005 NE BLANCO UN 421R 0. 1. 0.000 26893.383 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001045 NE BLANCO UN 422 0. 1. 0.000 10242.725 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001007 NE BLANCO UN 423R 0. 1. 0.000 15456.396 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001018 NE BLANCO UN 424 0. 1. 0.000 31938.664 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001009 NE BLANCO UN 425R 0. 1. 0.000 13335.222 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001015 NE BLANCO UN 426 0. 1. 0.000 4637.888 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001102 NE BLANCO UN 427R 0. 1. 0.000 12395.513 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 2 59 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NEW MEXICO TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------- ---------------- MB------- MB------ MMF----- MMF----- M$------ M$------ M$----- M$----- M$----- M$------ M$------ ---- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001041 NE BLANCO UN 428 0.000 0.000 5413.943 893.300 0.0 937.3 82.9 0.0 163.7 656.2 399.5 26.2 001038 NE BLANCO UN 429R 0.000 0.000 2976.077 491.052 0.0 513.2 45.4 0.0 132.2 319.0 206.0 21.0 001047 NE BLANCO UN 430 0.000 0.000 803.208 132.530 0.0 132.3 11.5 0.0 55.0 62.4 52.8 8.1 001022 NE BLANCO UN 431 0.000 0.000 5138.941 847.925 0.0 901.0 79.9 0.0 189.4 600.3 328.2 30.5 001034 NE BLANCO UN 432 0.000 0.000 6046.802 997.722 0.0 1030.0 91.0 0.0 150.7 749.1 516.2 24.0 001004 NE BLANCO UN 433 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001095 NE BLANCO UN 434 0.000 0.000 6281.131 1036.386 0.0 1072.4 94.4 0.0 155.2 781.2 529.7 24.8 001108 NE BLANCO UN 435 0.000 0.000 2318.540 382.559 0.0 400.8 35.4 0.0 123.5 230.0 145.5 19.5 001106 NE BLANCO UN 436 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001050 NE BLANCO UN 437 0.000 0.000 2699.307 445.386 0.0 467.7 41.4 0.0 131.6 279.8 173.5 20.9 001107 NE BLANCO UN 438R 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001066 NE BLANCO UN 439 0.000 0.000 8033.281 1325.491 0.0 1393.2 123.1 0.0 185.3 1030.7 605.1 29.8 001082 NE BLANCO UN 440 0.000 0.000 2606.640 430.095 0.0 450.3 39.8 0.0 127.6 268.6 171.9 20.2 001100 NE BLANCO UN 441R 0.000 0.000 1087.594 179.453 0.0 180.2 16.1 0.0 61.7 97.6 80.4 9.2 001062 NE BLANCO UN 442 0.000 0.000 2489.286 410.732 0.0 425.8 37.8 0.0 117.1 257.4 178.3 18.4 001042 NE BLANCO UN 443 0.000 0.000 1968.756 324.844 0.0 343.0 30.2 0.0 130.4 173.5 104.3 20.6 001059 NE BLANCO UN 444 0.000 0.000 15899.583 2623.431 0.0 2755.6 243.5 0.0 220.9 2176.2 1259.7 35.7 001070 NE BLANCO UN 445 0.000 0.000 3505.498 578.408 0.0 600.7 53.1 0.0 133.3 393.4 265.5 21.1 001061 NE BLANCO UN 446 0.000 0.000 467.781 77.184 0.0 76.4 6.9 0.0 34.5 33.6 29.8 4.7 001086 NE BLANCO UN 447 0.000 0.000 5838.619 963.372 0.0 998.3 88.3 0.0 154.3 718.2 484.3 24.6 001093 NE BLANCO UN 448 0.000 0.000 2815.999 464.640 0.0 487.9 42.9 0.0 133.6 295.8 182.6 21.2 001067 NE BLANCO UN 449 0.000 0.000 2469.523 407.472 0.0 430.1 37.9 0.0 141.5 238.1 143.4 22.5 001040 NE BLANCO UN 450 0.000 0.000 932.096 153.796 0.0 154.1 13.6 0.0 58.2 78.2 64.1 8.6 001084 NE BLANCO UN 451 0.000 0.000 2234.506 368.693 0.0 389.9 34.5 0.0 137.9 207.0 122.4 21.9 001043 NE BLANCO UN 452 0.000 0.000 456.903 75.389 0.0 75.4 6.6 0.0 50.9 16.8 13.7 7.4 001032 NE BLANCO UN 453 0.000 0.000 3346.574 552.185 0.0 585.9 51.7 0.0 162.4 353.2 200.3 26.0 001078 NE BLANCO UN 454 0.000 0.000 1043.923 172.247 0.0 173.6 15.5 0.0 64.4 89.0 73.6 9.6 001049 NE BLANCO UN 455 0.000 0.000 9444.548 1558.351 0.0 1620.1 143.1 0.0 181.7 1230.4 793.9 29.2 001052 NE BLANCO UN 456 0.000 0.000 2792.713 460.797 0.0 489.1 43.3 0.0 152.4 278.9 158.3 24.3 001056 NE BLANCO UN 457 0.000 0.000 2486.840 410.329 0.0 434.9 38.6 0.0 144.9 238.9 138.4 23.1 001103 NE BLANCO UN 458 0.000 0.000 629.465 103.861 0.0 103.9 9.0 0.0 54.1 38.5 32.1 7.9 001027 NE BLANCO UN 459 0.000 0.000 6051.894 998.563 0.0 1038.7 91.9 0.0 160.9 746.8 490.5 25.7 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 3 60 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NEW MEXICO TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ----------------- --- --- MB------ MMF------ ------- ------- ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001041 NE BLANCO UN 428 0. 1. 0.000 10574.295 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001038 NE BLANCO UN 429R 0. 1. 0.000 6523.948 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001047 NE BLANCO UN 430 0. 1. 0.000 2530.225 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001022 NE BLANCO UN 431 0. 1. 0.000 12670.860 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001034 NE BLANCO UN 432 0. 1. 0.000 13898.580 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001004 NE BLANCO UN 433 0. 1. 0.000 315.822 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001095 NE BLANCO UN 434 0. 1. 0.000 13310.083 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001108 NE BLANCO UN 435 0. 1. 0.000 6601.137 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001106 NE BLANCO UN 436 0. 1. 0.000 263.337 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001050 NE BLANCO UN 437 0. 1. 0.000 4858.571 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001107 NE BLANCO UN 438R 0. 1. 0.000 108.814 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001066 NE BLANCO UN 439 0. 1. 0.000 19844.371 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001082 NE BLANCO UN 440 0. 1. 0.000 4162.911 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001100 NE BLANCO UN 441R 0. 1. 0.000 4058.048 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001062 NE BLANCO UN 442 0. 1. 0.000 4556.603 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001042 NE BLANCO UN 443 0. 1. 0.000 5265.427 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001059 NE BLANCO UN 444 0. 1. 0.000 31410.458 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001070 NE BLANCO UN 445 0. 1. 0.000 8367.868 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001061 NE BLANCO UN 446 0. 1. 0.000 1863.860 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001086 NE BLANCO UN 447 0. 1. 0.000 16246.680 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001093 NE BLANCO UN 448 0. 1. 0.000 7283.702 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001067 NE BLANCO UN 449 0. 1. 0.000 5439.622 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001040 NE BLANCO UN 450 0. 1. 0.000 3368.802 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001084 NE BLANCO UN 451 0. 1. 0.000 6232.436 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001043 NE BLANCO UN 452 0. 1. 0.000 851.717 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001032 NE BLANCO UN 453 0. 1. 0.000 7965.951 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001078 NE BLANCO UN 454 0. 1. 0.000 2747.407 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001049 NE BLANCO UN 455 0. 1. 0.000 26138.622 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001052 NE BLANCO UN 456 0. 1. 0.000 4716.997 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001056 NE BLANCO UN 457 0. 1. 0.000 7436.054 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001103 NE BLANCO UN 458 0. 1. 0.000 1081.209 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001027 NE BLANCO UN 459 0. 1. 0.000 12954.264 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 4 61 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NEW MEXICO TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------- ---------------- MB------- MB------ MMF------ MMF----- M$------ M$------ M$----- M$----- M$----- M$------ M$------ ---- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001083 NE BLANCO UN 460 0.000 0.000 5635.940 929.930 0.0 970.2 85.9 0.0 160.2 688.1 439.3 25.6 001021 NE BLANCO UN 461 0.000 0.000 2912.116 480.499 0.0 509.0 45.2 0.0 153.6 295.1 170.3 24.5 001054 NE BLANCO UN 462 0.000 0.000 8625.170 1423.153 0.0 1461.5 129.1 0.0 159.3 1114.3 793.6 25.5 001023 NE BLANCO UN 463 0.000 0.000 4562.059 752.740 0.0 786.6 69.3 0.0 151.5 537.1 341.7 24.2 001011 NE BLANCO UN 464 0.000 0.000 1264.529 208.647 0.0 217.0 19.4 0.0 95.5 97.1 65.2 14.8 001081 NE BLANCO UN 465 0.000 0.000 5294.621 873.612 0.0 910.2 80.3 0.0 155.4 640.6 413.8 24.8 001058 NE BLANCO UN 466 0.000 0.000 2464.569 406.654 0.0 408.5 36.0 0.0 74.2 283.4 235.4 11.3 001036 NE BLANCO UN 467 0.000 0.000 1902.687 313.943 0.0 327.8 29.0 0.0 112.9 176.7 115.8 17.7 001094 NE BLANCO UN 468 0.000 0.000 5276.536 870.629 0.0 926.2 81.7 0.0 192.3 619.6 333.8 31.0 001088 NE BLANCO UN 469 0.000 0.000 9654.051 1592.919 0.0 1660.3 146.9 0.0 185.9 1261.3 792.9 29.9 001010 NE BLANCO UN 470 0.000 0.000 55.866 9.218 0.0 9.1 0.7 0.0 7.4 0.9 0.9 1.2 001099 NE BLANCO UN 471 0.000 0.000 900.959 148.659 0.0 149.9 13.4 0.0 63.6 69.3 56.0 9.5 001092 NE BLANCO UN 472 0.000 0.000 1716.771 283.267 0.0 297.5 26.3 0.0 118.6 144.7 92.6 18.7 001053 NE BLANCO UN 473 0.000 0.000 10159.515 1676.321 0.0 1748.9 154.6 0.0 189.7 1334.5 830.8 30.5 001087 NE BLANCO UN 474 0.000 0.000 657.425 108.475 0.0 109.2 9.6 0.0 58.1 39.3 31.7 8.6 001098 NE BLANCO UN 475 0.000 0.000 2887.433 476.427 0.0 504.5 44.6 0.0 152.2 292.2 170.3 24.3 001063 NE BLANCO UN 476 0.000 0.000 9920.499 1636.882 0.0 1727.9 153.2 0.0 200.3 1306.2 734.2 32.3 001020 NE BLANCO UN 477 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001031 NE BLANCO UN 478 0.000 0.000 3070.115 506.569 0.0 523.4 46.4 0.0 121.6 337.6 240.4 19.2 003002 NE BLANCO UN 479R 0.000 0.000 5122.859 845.272 0.0 890.7 78.7 0.0 164.7 615.1 360.6 26.4 001096 NE BLANCO UN 480 0.000 0.000 5829.745 961.908 0.0 1014.9 89.9 0.0 172.3 715.3 411.2 27.6 001012 NE BLANCO UN 481 0.000 0.000 3638.462 600.346 0.0 621.9 55.1 0.0 131.9 413.1 284.8 20.9 001079 NE BLANCO UN 482 0.000 0.000 6543.990 1079.758 0.0 1134.3 100.3 0.0 174.6 816.7 487.2 28.0 001026 NE BLANCO UN 483 0.000 0.000 6207.935 1024.309 0.0 1068.7 94.6 0.0 165.0 768.8 488.9 26.4 001105 NE BLANCO UN 484 0.000 0.000 249.045 41.092 0.0 40.7 3.6 0.0 28.0 8.6 7.6 3.6 001030 NE BLANCO UN 485 0.000 0.000 12238.974 2019.431 0.0 2102.7 185.6 0.0 197.5 1633.4 1030.6 31.8 001035 NE BLANCO UN 486 0.000 0.000 3737.030 616.610 0.0 646.1 57.0 0.0 144.9 422.1 263.5 23.1 001065 NE BLANCO UN 487 0.000 0.000 9399.439 1550.908 0.0 1633.2 144.5 0.0 195.2 1228.8 709.4 31.5 001014 NE BLANCO UN 488 0.000 0.000 19292.195 3183.212 0.0 3381.2 299.3 0.0 257.6 2683.6 1387.8 41.9 001071 NE BLANCO UN 489 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001064 NE BLANCO UN 490 0.000 0.000 7476.698 1233.655 0.0 1289.1 113.8 0.0 175.7 949.4 590.1 28.2 001080 NE BLANCO UN 491 0.000 0.000 112.224 18.517 0.0 18.3 1.6 0.0 15.5 1.2 1.1 1.5 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 5 62 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ----------------- --- --- MB------ MM------ ----- ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001083 NE BLANCO UN 460 0. 1. 0.000 9180.859 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001021 NE BLANCO UN 461 0. 1. 0.000 4924.924 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001054 NE BLANCO UN 462 0. 1. 0.000 15852.151 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001023 NE BLANCO UN 463 0. 1. 0.000 9668.207 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001011 NE BLANCO UN 464 0. 1. 0.000 2224.061 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001081 NE BLANCO UN 465 0. 1. 0.000 16764.659 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001058 NE BLANCO UN 466 0. 1. 0.000 9224.934 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001036 NE BLANCO UN 467 0. 1. 0.000 4555.617 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001094 NE BLANCO UN 468 0. 1. 0.000 11611.755 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001088 NE BLANCO UN 469 0. 1. 0.000 23011.730 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001010 NE BLANCO UN 470 0. 1. 0.000 343.505 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 2.5 2.6 001099 NE BLANCO UN 471 0. 1. 0.000 6661.079 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001092 NE BLANCO UN 472 0. 1. 0.000 11475.866 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001053 NE BLANCO UN 473 0. 1. 0.000 23490.480 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001087 NE BLANCO UN 474 0. 1. 0.000 2731.992 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001098 NE BLANCO UN 475 0. 1. 0.000 6509.638 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001063 NE BLANCO UN 476 0. 1. 0.000 21607.438 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001020 NE BLANCO UN 477 0. 1. 0.000 0.075 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001031 NE BLANCO UN 478 0. 1. 0.000 10180.762 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 003002 NE BLANCO UN 479R 0. 1. 0.000 9030.193 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001096 NE BLANCO UN 480 0. 1. 0.000 11149.373 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001012 NE BLANCO UN 481 0. 1. 0.000 9276.860 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001079 NE BLANCO UN 482 0. 1. 0.000 13806.113 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001026 NE BLANCO UN 483 0. 1. 0.000 11177.702 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001105 NE BLANCO UN 484 0. 1. 0.000 1073.750 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001030 NE BLANCO UN 485 0. 1. 0.000 32375.160 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001035 NE BLANCO UN 486 0. 1. 0.000 6085.736 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001065 NE BLANCO UN 487 0. 1. 0.000 20634.367 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001014 NE BLANCO UN 488 0. 1. 0.000 37110.303 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001071 NE BLANCO UN 489 0. 1. 0.000 74.905 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001064 NE BLANCO UN 490 0. 1. 0.000 11569.078 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001080 NE BLANCO UN 491 0. 1. 0.000 674.073 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 6 63 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------- --------------- MB------ MB------ MMF---- MMF----- M$----- M$----- M$---- M$----- M$---- M$----- M$------ ---- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001097 NE BLANCO UN 492 0.000 0.000 3349.250 552.626 0.0 576.2 50.7 0.0 135.0 370.6 243.1 21.4 001019 NE BLANCO UN 493 0.000 0.000 1890.063 311.860 0.0 327.7 29.1 0.0 120.3 169.6 106.2 19.0 001017 NE BLANCO UN 494 0.000 0.000 343.110 56.613 0.0 56.1 5.1 0.0 38.5 12.0 10.0 5.3 001089 NE BLANCO UN 495 0.000 0.000 1866.780 308.019 0.0 322.4 28.5 0.0 113.8 171.2 109.5 17.9 001077 NE BLANCO UN 496 0.000 0.000 5264.930 868.714 0.0 908.0 80.4 0.0 158.8 635.6 400.3 25.4 001048 NE BLANCO UN 497 0.000 0.000 1708.291 281.868 0.0 291.6 25.8 0.0 101.5 156.1 110.7 15.8 001072 NE BLANCO UN 498 0.000 0.000 4582.544 756.120 0.0 789.1 69.7 0.0 150.5 540.5 347.1 24.0 001003 NE BLANCO UN 499 0.000 0.000 710.420 117.219 0.0 117.7 10.6 0.0 58.2 46.8 38.2 8.6 003001 NE BLANCO UN 500 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001091 NE BLANCO UN 504 0.000 0.000 2368.874 390.864 0.0 413.7 36.5 0.0 141.9 223.7 130.7 22.6 001016 NE BLANCO UN 505 0.000 0.000 2710.698 447.265 0.0 474.2 42.0 0.0 150.2 268.1 153.7 24.0 002001 SAN JUAN 30-6 467 0.000 0.000 4056.654 234.271 0.0 242.8 21.5 0.0 48.1 164.5 111.8 21.8 FIELD TOTAL 0.000 0.000 413775.040 67837.801 0.0 70761.5 6258.0 1595.4 12532.9 47782.2 29766.2 TOTAL ALL LEASES 0.000 413775.040 0.0 6258.0 12532.9 29766.2 IN THIS SUMMARY 0.000 67837.801 70761.5 1595.4 47782.2 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 7 64 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST 95% NET PROFITS INTEREST 95% NET PROFITS INTEREST NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ----------------- --- --- MB------ MMF------- ------ ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001097 NE BLANCO UN 492 0. 1. 0.000 6369.168 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001019 NE BLANCO UN 493 0. 1. 0.000 3512.020 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001017 NE BLANCO UN 494 0. 1. 0.000 1389.640 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001089 NE BLANCO UN 495 0. 1. 0.000 3142.343 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001077 NE BLANCO UN 496 0. 1. 0.000 8579.895 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001048 NE BLANCO UN 497 0. 1. 0.000 2750.522 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001072 NE BLANCO UN 498 0. 1. 0.000 8037.244 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001003 NE BLANCO UN 499 0. 1. 0.000 1052.245 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 003001 NE BLANCO UN 500 0. 1. 0.000 154.586 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001091 NE BLANCO UN 504 0. 1. 0.000 5847.572 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 001016 NE BLANCO UN 505 0. 1. 0.000 4926.885 19.600 19.600 16.500 16.500 0.00 0.00 0.99 1.13 5.3 2.6 002001 SAN JUAN 30-6 467 0. 1. 0.000 8749.283 6.860 6.860 5.775 5.775 0.00 0.00 0.99 1.13 5.3 2.6 FIELD TOTAL 0. 107. 0.936 1016981.134 TOTAL ALL LEASES 0. 0.936 IN THIS SUMMARY 107. 1016981.134 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 8 65 ANNEX C TAX CREDIT REPORT UPDATE (Attached) 66 [Letterhead of Netherland, Sewell & Associates, Inc.] November 10, 1998 Mr. Ron E. Hooper Burlington Resources Coal Seam Gas Royalty Trust NationsBank of Texas, N.A., Trustee NationsBank Plaza 901 Main Street, 17th Floor Dallas, Texas 75202 Dear Mr. Hooper: In accordance with your request, we have estimated, as of August 31, 1998, the Section 29 nonconventional fuels federal income tax credit attributable to the Burlington Resources Coal Seam Gas Royalty Trust (Trust) net profits interest in the Fruitland Coal Formation underlying the Northeast Blanco Unit, Rio Arriba and San Juan Counties, New Mexico, as listed in the accompanying tabulations. The tax credit is derived from the Burlington Resources Oil & Gas Company (Burlington) interest in the proved gas reserves as estimated in our report dated November 9, 1998. This report has been prepared using constant prices and costs and conforms to the guidelines of the Securities and Exchange Commission (SEC). The estimated net proved reserves in this report are defined as the portion of the gross reserves attributable to the Trust net profits interest. These reserves have been reduced by the amount of gas reserves necessary to cover the lease operating costs at the current gas price. As presented in the accompanying summary projection, Table I, we estimate the Trust net reserves and the tax credit attributable to the Trust net profits interest, as of August 31, 1998, to be: Trust Net Reserves Future Net Revenue ------------------------ --------------------------- Condensate Gas Present Worth Category (Barrels) (MCF) Total at 10% - ---------------- ---------- ---------- ----------- ------------- Proved Developed 0 26,758,942 $25,711,700 $21,587,100 Gas volumes are expressed in thousands of standard cubic feet (MCF) at the contract temperature and pressure bases. These properties no longer produce commercial volumes of condensate. This report includes a summary projection of reserves and future tax credit along with one-line summaries of reserves, economics, and basic data by lease. For the purposes of this report, the term "lease" refers to a single economic projection. 67 The estimated reserves and future tax credit shown in this report are for proved developed reserves only. Our study indicates that there are no proved undeveloped reserves for these properties at this time. In accordance with SEC guidelines, our estimates do not include any value for probable or possible reserves which may exist for these properties. This report does not include any value which could be attributed to interests in undeveloped acreage. For the purposes of this report, a field inspection of the properties has not been performed nor has the mechanical operation or condition of the wells and their related facilities been examined. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs which may be incurred due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment nor the cost of abandoning the properties. An estimated 1998 tax credit of $1.07 per MMBTU is held constant in accordance with SEC guidelines. Lease and well operating costs are based on operating expense records provided by Burlington. These costs include the per-well overhead expenses allowed under joint operating agreements along with costs estimated to be incurred at and below the district and field levels. General and administrative overhead expenses of the Trustee are not included. Lease and well operating costs are held constant in accordance with SEC guidelines. Capital costs are included as required for workovers and production equipment. We have made no investigation of potential gas volume and value imbalances which may have resulted from overdelivery or underdelivery to the Burlington interest. Therefore, our estimates of reserves and tax credit do not include adjustments for the settlement of any such imbalances; our projections are based on Burlington receiving its net revenue interest share of estimated future gross gas production. The reserves included in this report are estimates only and should not be construed as exact quantities. They may or may not be recovered; if recovered, the tax credit therefrom and the costs related thereto could be more or less than the estimated amounts. The sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions included in this report due to governmental policies and uncertainties of supply and demand. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which legal or accounting, rather than engineering and geological, interpretation may be controlling. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geological data; therefore, our conclusions necessarily represent only informed professional judgments. The titles to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from Burlington Resources Oil & Gas Company and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. We are independent petroleum engineers, geologists, and geophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Basic geologic and field performance data together with our engineering work sheets are maintained on file in our office. Very truly yours, /s/ Frederic D. Sewell DDS:PJA 68 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT TOTAL PROVED DEVELOPED RESERVES SAN JUAN BASIN, NM GROSS REVENUE PERIOD GROSS NET GROSS NET INCL PROD+ADVAL TAXES PROD+AV NET CAP OPERATING NET CUM P.W. ENDING OIL/COND OIL/COND GAS GAS OIL GAS TOTAL TAXES INVSTMT EXPENSE REVENUE 10.000% - -------- MB------ MB------ MMF------ MMF----- M$------ M$----- M$----- M$----- M$----- M$------- M$----- M$------ 12-31-98 0.000 0.000 24878.838 2980.739 0.0 2864.2 2864.2 0.0 0.0 0.0 2864.2 2819.4 12-31-99 0.000 0.000 60197.523 7411.870 0.0 7122.0 7122.0 0.0 0.0 0.0 7122.0 9382.2 12-31- 0 0.000 0.000 46543.500 6706.261 0.0 6443.5 6443.5 0.0 0.0 0.0 6443.5 14792.5 12-31- 1 0.000 0.000 37646.093 5323.189 0.0 5115.1 5115.1 0.0 0.0 0.0 5115.1 18696.2 12-31- 2 0.000 0.000 31277.589 4336.883 0.0 4166.9 4166.9 0.0 0.0 0.0 4166.9 21587.1 SUBTOTAL 0.000 0.000 200543.543 26758.942 0.0 25711.7 25711.7 0.0 0.0 0.0 25711.7 21587.1 REMAING 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 21587.1 TOTAL OF 4.3 YRS 0.000 0.000 200543.543 26758.942 0.0 25711.7 25711.7 0.0 0.0 0.0 25711.7 21587.1 CUM PROD 0.936 603206.094 ULTIMATE 0.936 803749.637 BASED ON CONSTANT PRICES AND COSTS PRESENT WORTH PROFILE FOR 12.00 PCT, PRESENT WORTH M$ 20916.8 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL FOR 14.00 PCT, PRESENT WORTH M$ 20285.3 REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. FOR 18.00 PCT, PRESENT WORTH M$ 19131.9 FOR 20.00 PCT, PRESENT WORTH M$ 18605.6 NETHERLAND, SEWELL & ASSOCIATES, INC. - DALLAS & HOUSTON FOR 24.00 PCT, PRESENT WORTH M$ 17637.7 TABLE 1 69 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------ ----------------- MB------ MB------ MMF----- MMF------ M$----- M$----- M$--- M$----- M$---- M$----- M$----- ---- N E W M E X I C O BASIN FIELD, RIO ARRIBA COUNTY 001111 NE BLANCO CAP CSTS 0.000 0.000 0.000 -1530.176 0.0 -1470.3 0.0 0.0 0.0 -1470.3 -1402.4 1.0 001025 NE BLANCO UN 211 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001090 NE BLANCO UN 212 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001055 NE BLANCO UN 218 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001104 NE BLANCO UN 400 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001073 NE BLANCO UN 400R 0.000 0.000 4457.616 667.560 0.0 641.4 0.0 0.0 0.0 641.4 551.7 4.3 001076 NE BLANCO UN 401 0.000 0.000 1663.492 229.582 0.0 220.6 0.0 0.0 0.0 220.6 192.4 4.3 001002 NE BLANCO UN 402 0.000 0.000 684.122 76.064 0.0 73.1 0.0 0.0 0.0 73.1 60.8 4.3 001008 NE BLANCO UN 403R 0.000 0.000 1175.493 153.087 0.0 147.1 0.0 0.0 0.0 147.1 128.2 4.3 001057 NE BLANCO UN 404R 0.000 0.000 1604.501 220.334 0.0 211.7 0.0 0.0 0.0 211.7 180.6 4.3 001068 NE BLANCO UN 406 0.000 0.000 1940.089 272.938 0.0 262.3 0.0 0.0 0.0 262.3 222.0 4.3 001044 NE BLANCO UN 407 0.000 0.000 783.341 91.619 0.0 88.0 0.0 0.0 0.0 88.0 73.7 4.3 001101 NE BLANCO UN 408 0.000 0.000 1286.000 170.410 0.0 163.7 0.0 0.0 0.0 163.7 137.8 4.3 001069 NE BLANCO UN 409 0.000 0.000 3167.041 465.262 0.0 447.1 0.0 0.0 0.0 447.1 386.4 4.3 001028 NE BLANCO UN 410 0.000 0.000 687.453 76.587 0.0 73.6 0.0 0.0 0.0 73.6 62.7 4.3 001029 NE BLANCO UN 411 0.000 0.000 2293.730 328.371 0.0 315.5 0.0 0.0 0.0 315.5 269.5 4.3 001039 NE BLANCO UN 412 0.000 0.000 6356.607 965.227 0.0 927.4 0.0 0.0 0.0 927.4 789.6 4.3 001075 NE BLANCO UN 413R 0.000 0.000 1892.449 265.470 0.0 255.1 0.0 0.0 0.0 255.1 212.7 4.3 001013 NE BLANCO UN 414 0.000 0.000 4740.917 711.968 0.0 684.1 0.0 0.0 0.0 684.1 575.2 4.3 001001 NE BLANCO UN 415 0.000 0.000 1034.705 131.018 0.0 125.9 0.0 0.0 0.0 125.9 106.8 4.3 001085 NE BLANCO UN 416 0.000 0.000 585.818 60.656 0.0 58.3 0.0 0.0 0.0 58.3 48.5 4.3 001074 NE BLANCO UN 417 0.000 0.000 1696.593 234.769 0.0 225.6 0.0 0.0 0.0 225.6 200.0 4.3 001051 NE BLANCO UN 418 0.000 0.000 4065.165 606.043 0.0 582.3 0.0 0.0 0.0 582.3 497.9 4.3 001024 NE BLANCO UN 419 0.000 0.000 2884.048 420.902 0.0 404.4 0.0 0.0 0.0 404.4 337.5 4.3 001046 NE BLANCO UN 420 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001005 NE BLANCO UN 421R 0.000 0.000 5024.271 756.384 0.0 726.8 0.0 0.0 0.0 726.8 624.0 4.3 001045 NE BLANCO UN 422 0.000 0.000 2139.335 304.169 0.0 292.3 0.0 0.0 0.0 292.3 249.2 4.3 001007 NE BLANCO UN 423R 0.000 0.000 2235.157 319.189 0.0 306.7 0.0 0.0 0.0 306.7 258.3 4.3 001018 NE BLANCO UN 424 0.000 0.000 6170.417 936.043 0.0 899.4 0.0 0.0 0.0 899.4 768.8 4.3 001009 NE BLANCO UN 425R 0.000 0.000 2217.950 316.492 0.0 304.1 0.0 0.0 0.0 304.1 252.7 4.3 001015 NE BLANCO UN 426 0.000 0.000 1247.445 164.365 0.0 157.9 0.0 0.0 0.0 157.9 134.4 4.3 001102 NE BLANCO UN 427R 0.000 0.000 2145.726 305.171 0.0 293.2 0.0 0.0 0.0 293.2 245.8 4.3 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 1 70 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ----------------- --- --- MB------ MMF------ ------- ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O BASIN FIELD, RIO ARRIBA COUNTY 001111 NE BLANCO CAP CSTS 0. 0. 0.000 0.000 18.620 18.620 0.000 0.000 0.00 0.00 0.99 0.99 0.0 0.0 001025 NE BLANCO UN 211 0. 1. 0.932 83.605 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001090 NE BLANCO UN 212 0. 1. 0.000 6.534 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001055 NE BLANCO UN 218 0. 1. 0.000 96.877 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001104 NE BLANCO UN 400 0. 1. 0.000 16.500 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001073 NE BLANCO UN 400R 0. 1. 0.000 10721.426 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001076 NE BLANCO UN 401 0. 1. 0.000 7741.733 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001002 NE BLANCO UN 402 0. 1. 0.000 10476.616 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001008 NE BLANCO UN 403R 0. 1. 0.000 6461.476 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001057 NE BLANCO UN 404R 0. 1. 0.000 8327.393 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001068 NE BLANCO UN 406 0. 1. 0.000 4031.201 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001044 NE BLANCO UN 407 0. 1. 0.000 5002.972 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001101 NE BLANCO UN 408 0. 1. 0.000 6919.472 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001069 NE BLANCO UN 409 0. 1. 0.000 16938.824 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001028 NE BLANCO UN 410 0. 1. 0.000 1694.588 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001029 NE BLANCO UN 411 0. 1. 0.000 13672.401 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001039 NE BLANCO UN 412 0. 1. 0.000 28668.226 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001075 NE BLANCO UN 413R 0. 1. 0.000 9295.764 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001013 NE BLANCO UN 414 0. 1. 0.000 18397.780 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001001 NE BLANCO UN 415 0. 1. 0.004 3322.943 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001085 NE BLANCO UN 416 0. 1. 0.000 2474.420 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001074 NE BLANCO UN 417 0. 1. 0.000 7675.318 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001051 NE BLANCO UN 418 0. 1. 0.000 17274.744 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001024 NE BLANCO UN 419 0. 1. 0.000 23757.100 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001046 NE BLANCO UN 420 0. 1. 0.000 175.328 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001005 NE BLANCO UN 421R 0. 1. 0.000 23609.145 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001045 NE BLANCO UN 422 0. 1. 0.000 8531.475 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001007 NE BLANCO UN 423R 0. 1. 0.000 13224.519 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001018 NE BLANCO UN 424 0. 1. 0.000 27296.458 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001009 NE BLANCO UN 425R 0. 1. 0.000 9872.021 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001015 NE BLANCO UN 426 0. 1. 0.000 3616.551 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001102 NE BLANCO UN 427R 0. 1. 0.000 9725.778 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 2 71 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------- ---------------- MB------- MB------ MMF----- MMF----- M$----- M$----- M$--- M$----- M$---- M$----- M$------ ---- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001041 NE BLANCO UN 428 0.000 0.000 2367.432 339.923 0.0 326.6 0.0 0.0 0.0 326.6 273.8 4.3 001038 NE BLANCO UN 429R 0.000 0.000 1368.137 183.284 0.0 176.1 0.0 0.0 0.0 176.1 148.1 4.3 001047 NE BLANCO UN 430 0.000 0.000 620.875 66.153 0.0 63.6 0.0 0.0 0.0 63.6 55.2 4.3 001022 NE BLANCO UN 431 0.000 0.000 1804.585 251.698 0.0 241.8 0.0 0.0 0.0 241.8 201.1 4.3 001034 NE BLANCO UN 432 0.000 0.000 3415.879 504.269 0.0 484.5 0.0 0.0 0.0 484.5 413.2 4.3 001004 NE BLANCO UN 433 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001095 NE BLANCO UN 434 0.000 0.000 3446.535 509.073 0.0 489.1 0.0 0.0 0.0 489.1 416.4 4.3 001108 NE BLANCO UN 435 0.000 0.000 998.631 125.364 0.0 120.5 0.0 0.0 0.0 120.5 100.1 4.3 001106 NE BLANCO UN 436 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001050 NE BLANCO UN 437 0.000 0.000 1125.448 145.242 0.0 139.6 0.0 0.0 0.0 139.6 116.0 4.3 001107 NE BLANCO UN 438R 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001066 NE BLANCO UN 439 0.000 0.000 3381.055 498.809 0.0 479.3 0.0 0.0 0.0 479.3 400.4 4.3 001082 NE BLANCO UN 440 0.000 0.000 1159.952 150.651 0.0 144.8 0.0 0.0 0.0 144.8 121.0 4.3 001100 NE BLANCO UN 441R 0.000 0.000 814.378 96.482 0.0 92.7 0.0 0.0 0.0 92.7 79.9 4.3 001062 NE BLANCO UN 442 0.000 0.000 1299.214 172.481 0.0 165.7 0.0 0.0 0.0 165.7 140.2 4.3 001042 NE BLANCO UN 443 0.000 0.000 743.107 85.311 0.0 82.0 0.0 0.0 0.0 82.0 67.6 4.3 001059 NE BLANCO UN 444 0.000 0.000 6902.345 1050.771 0.0 1009.6 0.0 0.0 0.0 1009.6 847.9 4.3 001070 NE BLANCO UN 445 0.000 0.000 1802.359 251.350 0.0 241.5 0.0 0.0 0.0 241.5 204.5 4.3 001061 NE BLANCO UN 446 0.000 0.000 453.657 39.939 0.0 38.4 0.0 0.0 0.0 38.4 33.9 4.3 001086 NE BLANCO UN 447 0.000 0.000 3155.518 463.456 0.0 445.3 0.0 0.0 0.0 445.3 379.4 4.3 001093 NE BLANCO UN 448 0.000 0.000 1173.776 152.818 0.0 146.8 0.0 0.0 0.0 146.8 121.9 4.3 001067 NE BLANCO UN 449 0.000 0.000 960.222 119.344 0.0 114.7 0.0 0.0 0.0 114.7 95.4 4.3 001040 NE BLANCO UN 450 0.000 0.000 696.928 78.072 0.0 75.0 0.0 0.0 0.0 75.0 64.3 4.3 001084 NE BLANCO UN 451 0.000 0.000 825.674 98.252 0.0 94.4 0.0 0.0 0.0 94.4 78.0 4.3 001043 NE BLANCO UN 452 0.000 0.000 327.599 20.180 0.0 19.4 0.0 0.0 0.0 19.4 16.1 4.3 001032 NE BLANCO UN 453 0.000 0.000 1194.234 156.025 0.0 149.9 0.0 0.0 0.0 149.9 124.3 4.3 001078 NE BLANCO UN 454 0.000 0.000 760.037 87.965 0.0 84.5 0.0 0.0 0.0 84.5 73.3 4.3 001049 NE BLANCO UN 455 0.000 0.000 4866.600 731.667 0.0 703.0 0.0 0.0 0.0 703.0 598.8 4.3 001052 NE BLANCO UN 456 0.000 0.000 975.080 121.672 0.0 116.9 0.0 0.0 0.0 116.9 96.5 4.3 001056 NE BLANCO UN 457 0.000 0.000 891.186 108.523 0.0 104.3 0.0 0.0 0.0 104.3 86.1 4.3 001103 NE BLANCO UN 458 0.000 0.000 463.640 41.502 0.0 39.9 0.0 0.0 0.0 39.9 34.1 4.3 001027 NE BLANCO UN 459 0.000 0.000 3114.982 457.102 0.0 439.2 0.0 0.0 0.0 439.2 375.0 4.3 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 3 72 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ---------------- --- --- MB------ MMF------ ------ ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001041 NE BLANCO UN 428 0. 1. 0.000 7527.784 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001038 NE BLANCO UN 429R 0. 1. 0.000 4916.008 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001047 NE BLANCO UN 430 0. 1. 0.000 2347.892 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001022 NE BLANCO UN 431 0. 1. 0.000 9336.504 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001034 NE BLANCO UN 432 0. 1. 0.000 11267.657 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001004 NE BLANCO UN 433 0. 1. 0.000 315.822 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001095 NE BLANCO UN 434 0. 1. 0.000 10475.487 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001108 NE BLANCO UN 435 0. 1. 0.000 5281.228 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001106 NE BLANCO UN 436 0. 1. 0.000 263.337 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001050 NE BLANCO UN 437 0. 1. 0.000 3284.712 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001107 NE BLANCO UN 438R 0. 1. 0.000 108.814 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001066 NE BLANCO UN 439 0. 1. 0.000 15192.145 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001082 NE BLANCO UN 440 0. 1. 0.000 2716.223 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001100 NE BLANCO UN 441R 0. 1. 0.000 3784.832 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001062 NE BLANCO UN 442 0. 1. 0.000 3366.531 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001042 NE BLANCO UN 443 0. 1. 0.000 4039.778 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001059 NE BLANCO UN 444 0. 1. 0.000 22413.220 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001070 NE BLANCO UN 445 0. 1. 0.000 6664.729 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001061 NE BLANCO UN 446 0. 1. 0.000 1849.736 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001086 NE BLANCO UN 447 0. 1. 0.000 13563.579 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001093 NE BLANCO UN 448 0. 1. 0.000 5641.479 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001067 NE BLANCO UN 449 0. 1. 0.000 3930.321 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001040 NE BLANCO UN 450 0. 1. 0.000 3133.634 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001084 NE BLANCO UN 451 0. 1. 0.000 4823.604 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001043 NE BLANCO UN 452 0. 1. 0.000 722.413 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001032 NE BLANCO UN 453 0. 1. 0.000 5813.611 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001078 NE BLANCO UN 454 0. 1. 0.000 2463.521 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001049 NE BLANCO UN 455 0. 1. 0.000 21560.674 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001052 NE BLANCO UN 456 0. 1. 0.000 2899.364 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001056 NE BLANCO UN 457 0. 1. 0.000 5840.400 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001103 NE BLANCO UN 458 0. 1. 0.000 915.384 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001027 NE BLANCO UN 459 0. 1. 0.000 10017.352 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 4 73 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------- ---------------- MB------ MB------ MMF----- MMF---- M$----- M$----- M$--- M$----- M$---- M$----- M$----- ---- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001083 NE BLANCO UN 460 0.000 0.000 2726.741 396.245 0.0 380.7 0.0 0.0 0.0 380.7 321.6 4.3 001021 NE BLANCO UN 461 0.000 0.000 1056.594 134.450 0.0 129.2 0.0 0.0 0.0 129.2 107.0 4.3 001054 NE BLANCO UN 462 0.000 0.000 5322.918 803.196 0.0 771.8 0.0 0.0 0.0 771.8 663.7 4.3 001023 NE BLANCO UN 463 0.000 0.000 2144.627 305.000 0.0 293.1 0.0 0.0 0.0 293.1 247.0 4.3 001011 NE BLANCO UN 464 0.000 0.000 587.914 60.983 0.0 58.6 0.0 0.0 0.0 58.6 48.3 4.3 001081 NE BLANCO UN 465 0.000 0.000 2602.052 376.700 0.0 362.0 0.0 0.0 0.0 362.0 305.5 4.3 001058 NE BLANCO UN 466 0.000 0.000 1940.712 273.036 0.0 262.3 0.0 0.0 0.0 262.3 229.8 4.3 001036 NE BLANCO UN 467 0.000 0.000 862.417 104.013 0.0 99.9 0.0 0.0 0.0 99.9 83.3 4.3 001094 NE BLANCO UN 468 0.000 0.000 1800.841 251.111 0.0 241.3 0.0 0.0 0.0 241.3 200.2 4.3 001088 NE BLANCO UN 469 0.000 0.000 4758.310 714.694 0.0 686.7 0.0 0.0 0.0 686.7 580.3 4.3 001010 NE BLANCO UN 470 0.000 0.000 55.866 1.659 0.0 1.6 0.0 0.0 0.0 1.6 1.6 1.2 001099 NE BLANCO UN 471 0.000 0.000 628.430 67.334 0.0 64.7 0.0 0.0 0.0 64.7 55.3 4.3 001092 NE BLANCO UN 472 0.000 0.000 726.031 82.635 0.0 79.4 0.0 0.0 0.0 79.4 66.0 4.3 001053 NE BLANCO UN 473 0.000 0.000 4932.507 741.999 0.0 713.0 0.0 0.0 0.0 713.0 602.5 4.3 001087 NE BLANCO UN 474 0.000 0.000 455.314 40.199 0.0 38.6 0.0 0.0 0.0 38.6 32.7 4.3 001098 NE BLANCO UN 475 0.000 0.000 1072.015 136.867 0.0 131.5 0.0 0.0 0.0 131.5 109.1 4.3 001063 NE BLANCO UN 476 0.000 0.000 3876.189 576.421 0.0 553.9 0.0 0.0 0.0 553.9 461.6 4.3 001020 NE BLANCO UN 477 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001031 NE BLANCO UN 478 0.000 0.000 1713.803 237.467 0.0 228.2 0.0 0.0 0.0 228.2 196.0 4.3 003002 NE BLANCO UN 479R 0.000 0.000 2044.759 289.345 0.0 278.0 0.0 0.0 0.0 278.0 231.5 4.3 001096 NE BLANCO UN 480 0.000 0.000 2260.555 323.170 0.0 310.5 0.0 0.0 0.0 310.5 257.7 4.3 001012 NE BLANCO UN 481 0.000 0.000 1958.750 275.863 0.0 265.1 0.0 0.0 0.0 265.1 225.5 4.3 001079 NE BLANCO UN 482 0.000 0.000 2796.901 407.242 0.0 391.3 0.0 0.0 0.0 391.3 328.1 4.3 001026 NE BLANCO UN 483 0.000 0.000 3010.000 440.647 0.0 423.4 0.0 0.0 0.0 423.4 357.8 4.3 001105 NE BLANCO UN 484 0.000 0.000 249.045 12.182 0.0 11.7 0.0 0.0 0.0 11.7 10.3 3.6 001030 NE BLANCO UN 485 0.000 0.000 6194.198 939.770 0.0 903.0 0.0 0.0 0.0 903.0 767.2 4.3 001035 NE BLANCO UN 486 0.000 0.000 1648.880 227.290 0.0 218.4 0.0 0.0 0.0 218.4 182.9 4.3 001065 NE BLANCO UN 487 0.000 0.000 3875.020 576.238 0.0 553.7 0.0 0.0 0.0 553.7 463.9 4.3 001014 NE BLANCO UN 488 0.000 0.000 6787.723 1032.805 0.0 992.4 0.0 0.0 0.0 992.4 825.6 4.3 001071 NE BLANCO UN 489 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001064 NE BLANCO UN 490 0.000 0.000 3522.249 520.941 0.0 500.6 0.0 0.0 0.0 500.6 421.8 4.3 001080 NE BLANCO UN 491 0.000 0.000 112.224 2.725 0.0 2.6 0.0 0.0 0.0 2.6 2.5 1.5 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 5 74 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ----------------- --- --- MB------ MMF------ ------ ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001083 NE BLANCO UN 460 0. 1. 0.000 6271.660 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001021 NE BLANCO UN 461 0. 1. 0.000 3069.402 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001054 NE BLANCO UN 462 0. 1. 0.000 12549.899 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001023 NE BLANCO UN 463 0. 1. 0.000 7250.775 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001011 NE BLANCO UN 464 0. 1. 0.000 1547.446 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001081 NE BLANCO UN 465 0. 1. 0.000 14072.090 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001058 NE BLANCO UN 466 0. 1. 0.000 8701.077 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001036 NE BLANCO UN 467 0. 1. 0.000 3515.347 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001094 NE BLANCO UN 468 0. 1. 0.000 8136.060 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001088 NE BLANCO UN 469 0. 1. 0.000 18115.989 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001010 NE BLANCO UN 470 0. 1. 0.000 343.505 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 2.5 2.6 001099 NE BLANCO UN 471 0. 1. 0.000 6388.550 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001092 NE BLANCO UN 472 0. 1. 0.000 10485.126 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001053 NE BLANCO UN 473 0. 1. 0.000 18263.472 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001087 NE BLANCO UN 474 0. 1. 0.000 2529.881 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001098 NE BLANCO UN 475 0. 1. 0.000 4694.220 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001063 NE BLANCO UN 476 0. 1. 0.000 15563.128 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001020 NE BLANCO UN 477 0. 1. 0.000 0.075 19.600 19.600 16.500 16.500 0.00 0.00 0.00 0.00 5.3 0.0 001031 NE BLANCO UN 478 0. 1. 0.000 8824.450 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 003002 NE BLANCO UN 479R 0. 1. 0.000 5952.093 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001096 NE BLANCO UN 480 0. 1. 0.000 7580.183 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001012 NE BLANCO UN 481 0. 1. 0.000 7597.148 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001079 NE BLANCO UN 482 0. 1. 0.000 10059.024 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001026 NE BLANCO UN 483 0. 1. 0.000 7979.767 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001105 NE BLANCO UN 484 0. 1. 0.000 1073.750 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001030 NE BLANCO UN 485 0. 1. 0.000 26330.384 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001035 NE BLANCO UN 486 0. 1. 0.000 3997.586 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001065 NE BLANCO UN 487 0. 1. 0.000 15109.948 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001014 NE BLANCO UN 488 0. 1. 0.000 24605.831 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001071 NE BLANCO UN 489 0. 1. 0.000 74.905 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001064 NE BLANCO UN 490 0. 1. 0.000 7614.629 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001080 NE BLANCO UN 491 0. 1. 0.000 674.073 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 6 75 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] RESERVES AND ECONOMICS AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES ACCT FIELD, COUNTY GROSS NET GROSS NET OIL GAS TOTAL NET CAP OPRTNG NET CUM P.W. LIFE NUMBER LEASE NAME OIL/COND OIL/COND GAS GAS REVENUE REVENUE TAXES INVSTMT EXPNSE REVENUE 10.000% YRS - ------ ----------------- MB------ MB------ MMF------ MMF----- M$----- M$----- M$--- M$----- M$---- M$----- M$------ ---- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001097 NE BLANCO UN 492 0.000 0.000 1619.483 222.681 0.0 214.0 0.0 0.0 0.0 214.0 180.3 4.3 001019 NE BLANCO UN 493 0.000 0.000 777.357 90.680 0.0 87.1 0.0 0.0 0.0 87.1 72.0 4.3 001017 NE BLANCO UN 494 0.000 0.000 299.850 15.831 0.0 15.2 0.0 0.0 0.0 15.2 12.8 4.3 001089 NE BLANCO UN 495 0.000 0.000 806.905 95.311 0.0 91.6 0.0 0.0 0.0 91.6 75.7 4.3 001077 NE BLANCO UN 496 0.000 0.000 2461.613 354.688 0.0 340.8 0.0 0.0 0.0 340.8 287.0 4.3 001048 NE BLANCO UN 497 0.000 0.000 902.613 110.314 0.0 106.0 0.0 0.0 0.0 106.0 89.4 4.3 001072 NE BLANCO UN 498 0.000 0.000 2195.471 312.969 0.0 300.7 0.0 0.0 0.0 300.7 253.7 4.3 001003 NE BLANCO UN 499 0.000 0.000 504.549 47.917 0.0 46.0 0.0 0.0 0.0 46.0 39.2 4.3 003001 NE BLANCO UN 500 0.000 0.000 0.000 0.000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 001091 NE BLANCO UN 504 0.000 0.000 856.743 103.123 0.0 99.1 0.0 0.0 0.0 99.1 82.0 4.3 001016 NE BLANCO UN 505 0.000 0.000 961.613 119.561 0.0 114.9 0.0 0.0 0.0 114.9 94.9 4.3 002001 SAN JUAN 30-6 467 0.000 0.000 2145.215 106.758 0.0 102.6 0.0 0.0 0.0 102.6 87.0 4.3 FIELD TOTAL 0.000 0.000 200543.543 26758.942 0.0 25711.6 0.0 0.0 0.0 25711.6 21587.6 TOTAL ALL LEASES 0.000 0.000 200543.543 26758.942 0.0 25711.6 0.0 0.0 0.0 25711.6 21587.6 IN THIS SUMMARY ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 7 76 [NSAI LOGO] [NETHERLAND, SEWELL & ASSOCIATES, INC.] BASIC DATA AS OF 8-31-98 BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST SECTION 29 TAX CREDIT ONLY NORTHEAST BLANCO UNIT SAN JUAN BASIN, NM TOTAL PROVED DEVELOPED RESERVES # OF WORKING REVENUE OIL/COND GAS 8/8 OPERATNG PROP FIELD, COUNTY WELLS GROSS ULTIMATE INTEREST INTEREST $/BBL $/MCF EXPENSE M$/M NUMBER LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END - ------ ---------------- --- --- MB------ MMF------ ------ ------ ------ ------ ----- ----- ---- ---- ----- ----- N E W M E X I C O ( C O N T D ) BASIN FIELD, SAN JUAN COUNTY (CONTD) 001097 NE BLANCO UN 492 0. 1. 0.000 4639.401 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001019 NE BLANCO UN 493 0. 1. 0.000 2399.314 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001017 NE BLANCO UN 494 0. 1. 0.000 1346.380 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001089 NE BLANCO UN 495 0. 1. 0.000 2082.468 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001077 NE BLANCO UN 496 0. 1. 0.000 5776.578 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001048 NE BLANCO UN 497 0. 1. 0.000 1944.844 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001072 NE BLANCO UN 498 0. 1. 0.000 5650.171 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001003 NE BLANCO UN 499 0. 1. 0.000 846.374 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 003001 NE BLANCO UN 500 0. 1. 0.000 154.586 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.00 5.3 0.0 001091 NE BLANCO UN 504 0. 1. 0.000 4335.441 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 001016 NE BLANCO UN 505 0. 1. 0.000 3177.800 19.600 19.600 16.500 16.500 0.00 0.00 0.99 0.99 5.3 2.6 002001 SAN JUAN 30-6 467 0. 1. 0.000 6837.844 6.860 6.860 5.775 5.775 0.00 0.00 0.99 0.99 5.3 2.6 FIELD TOTAL 0. 107. 0.936 803749.637 TOTAL ALL LEASES 0. 107. 0.936 803749.637 IN THIS SUMMARY ALL ESTIMATES HEREIN ARE PART OF THE NETHERLAND, SEWELL REPORT AND ARE SUBJECT TO ITS PARAMETERS AND CONDITIONS. BASED ON CONSTANT PRICES AND COSTS PAGE 8