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7/1/12 Dear Mr. Feehan, Bull Creek Reservoir Company PO Box 25 Molina, CO 81646 The high assessment paid by Bull Creek Reservoir Company shareholders continues to be a concern, but as detailed in my letter of 4/10/12 there appears to be no near term option for reducing that assessment by selling BCRC assets. Individual shareholders do have the option reducing their assessment by of selling some of their shares, and there has been one such transaction to date. It is worth noting that the shares were purchased by another BCRC shareholder, indicating that at least some shareholders feel that the water represented by the shares is worth the current high assessment. After exploring the current market and reviewing possible future options for sale of BCRC assets, it has become clear that the asset with the most potential is Reservoir #5, but as described in my letter of 4/10/12 there are questions about the structural integrity of the dam at Reservoir #5 that need to be answered before we can know just what that potential is. BCRC has allocated funds for a comprehensive geo- technical study and slope stability analysis to be done by Huddleston -Berry later this summer. This of course places an additional burden on the shareholders, but it is understood that until the results of that study are known BCRC will not be able to develop its strategy for the future. It is also worth noting that the potential market for BCRC water has been substantially impacted by the Bureau of Reclamation's decision to sell large portions of the water held in Ruedi Reservoir. Because of the location of BCRC's reservoirs, it has always been clear that the most likely purchaser of BCRC water is Ute Water Conservancy District in Grand Junction. However, Ute Water recently reached an agreement with the Bureau to purchase 12,000 acre feet of Ruedi Reservoir water for $1,300 per acre foot. That will certainly reduce the appeal of BCRC's Reservoir #5 to Ute, at least for the near term, and at that price it is doubtful that BCRC shareholders would ever approve the sale of Reservoir #5. So to summarize, I believe there will have to be significant changes in the market before BCRC's assets could be sold at a price that would be worthwhile to BCRC's shareholders. BCRC will continue to explore the limited options that exist for the sale of its water, but there is nothing that would appeal to BCRC shareholders at this at this time. Please contact me if you have any questions or comments. Yours truly, J W. Groo Secretary / Treasurer, Bull Creek Reservoir Company