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v. A. Sperling, Esq. February 2, 2007 Page 5 ANIMAS-LA PLATA PROJECT DILUGENCE UPDATE In our report, we had referenced a pending dnigence application for the ALP in Case No. 01CW054. This case was recently decreed on November 9,2006, thereby continuing to preserve the conditional ALP water rights that are not presently under development. UPDATED WATER RIGHTS FILINGS In Appendix C of our report, we provided a list of applications for new water rights filed with the Water Court from 2004 through 2005. The water rights applications for 2006 have now all been published. The 2006 applications with proven appropriation dates prior to February 23, 2006 will be senior to the RICO water rights. Enclosed is an updated Appendix C that lists new water rights applications upstream of the Boating Park filed from 2004 through 2006. This list includes claims for approximately 40 as of absolute direct flow water rights and approximately 240 acre-feet of absolute storage rights. Conditional appropriations claimed above the Boating Park total approximately 70 cfs of direct flow water rights and approximately 660 acre-feet of storage rights. These totals exclude the depletive claims by La Plata County in Case No. 06CW99 and by Southwestern Water Conservation District in Case No. 06CW127. La Plata County - In Case No. 06CW99. La Plata County is claiming conditional water rights to provide future development within the county. La Plata County is claiming depletive flow rates of six ds from the Animas River (above the Boating Park), one cfs from Junction Creek, and two cfs from Lightner Creek. An appropriation date of July 1. 1997 is claimed in this application. Southwestern Water Conservation District - In Case No. 06CW127, Southwestern Water Conservation District is applying for two water rights that claim a depletive volume of 30,000 acre-feet per year for new users above the Boating Park. The frst water right. SWCD Diversion, is a new water right claim that has a proposed