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KERR COAL COMPANY BOREHOLE RECLAMATION PLAN (Revision 1 -January 29, 2002) As part of the information gathering process for delineating and evaluating additional coal reserves to the north and east of their mining operations, Kerr Coal Company (Kerr) drilled a number of exploration boreholes within Federal Coal Lease C-22777 and adjacent to the lease in Exploration License C-28056. Based on a preliminary field reconnaissance by the BLM, other entities have or may have also drilled and completed boreholes or wells in this area. Documented well locations and designations are shown on Map BLM-2, Marr Mine .Area -Exploration Boreholes/Wells. The majority of the boreholes drilled by Kerr were cased and completed in various zones as potential ground water monitoring wells to collect baseline and operational hydrologic data in conjunction with potential future mining operations. On the basis of favorable reserve information from the drilling program(s), Ken developed detailed mining and reclamation plans for development of a portion of the identified reserves and proceeded with initial permitting activities. Unfortunately, coal market conditions (over supply) and the loss of the rail spur line, which provided the only economical transportation link to potential coal markets, has rendered development and production of the identified reserves uneconotnic under current conditions. Recognizing that the subject coal reserves will not be developed for some time, if ever, Kerr, at the request of the BLM, has developed plans to identify, plug, and reclaim all boreholes completed by Kerr for which there is no continuing beneficial use. Given the existence of known coal reserves and the potential that those reserves could be developed at some time in the future, it may be appropriate to retain some of the existing cased boreholes to monitor ground water conditions and effects Erom existing oz fumze training operations. In addition, given the semi-arid climate, scazcity of significant yeaz-round water sources, cost of completing new wells, and use of the subject Federal lands for livestock grazing and wildlife habitat, it may also be appropriate to retain and develop selected wells as water supply wells to support these existing land uses. As an integral pazt of the plan, therefore, Ken will identify any wells that may have continuing beneficial uses (monitoring or water supply) and provide justification for well retention and future use Eor BLM review and concurrence. Ken's proposed borehole reclamation plan is comprised of Eour components, as detailed in the following sections: • Field reconnaissance and inventory of wells • Determination of potential for beneficial use • BLM review and concurrence on well retention Eor beneficial use • Well plugging and reclamation Field Reconnaissance and Inventory of Wells BLM field reconnaissance in 1999 identified 38+ existing boreholes (with casing) in the area. Review of available documentation on Kerr's historical exploration activities identified approximately 47 boreholes and/or monitoring wells. Subsequently, field reconnaissance by Kerr personnel and additional file review completed in 2000 further changed the well count. The current estimate is 72 wells in the Marr mine azea including the exploration license to the northeast. The following summarizes the well count by location.