Appraisal Report for ALP Relinquishment Areas 1 & 2

LOVE APPRAISALS, INC.
cattle industry in the area. Expansion occurred in the 1950s and 1960s due to
increased prosperity from the development of oil, gas, uranium and vanadium.
The larger region of which La Plata County is a part not confined within state
boundaries but encompasses an area of common interest including southwestern
Colorado, northwestern New Mexico, northeastern Arizona and southeastern Utah.
This is a remote region with limited transportation facilities lying in the interval
between Interstate 70 to the north and Interstate 40 to the south. It is similarly
isolated from standard railroad lines which serve Grand Junction, Colorado to the
north and Gallup, New Mexico to the south. The region features a relatively small
percentage of private property with the vast majority of the lands being held by the
Federal government or in Native American Reservations.
Historically, the economy of the region depended upon mining, logging and
ranching. In the last 20 years, however, the economy has shifted to a heavier
reliance upon oil and gas production and tourism, although the
agricultural/ranching sector is still significant. Major oil and gas resources in the
region include the Aneth Field on the Navajo reservation, a long-time large oil
producer and the more recently developed coal bed methane gas reserves of the
San Juan Basin. The production of coal bed methane has become a large growth
factor in this county with 1,100 permits for new wells being issued in La Plata
County alone since 1985. The huge natural gas reserves of the San Juan basin
extend into New Mexico as well. Additional pipeline space is being developed in
order to move this gas to markets. The increase in drilling activity has resulted in
many new well drilling and well service companies. The construction of wells and
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