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METHANE DRAINAGE WELL (MDW) PROJECT PLAN -Panels 16-24 (Revised July 9, 2002) PROJECT DESCRIPTION The proposed project consists of drilling additional methane drainage wells (MDWs) for Longwall Panels 16 through 24, in an area that is generally located 7 to 10 miles east, and northeast of Paonia, Colorado. Methane gas would then be exhausted through these MDWs during and after mining. Approximately 54 pads and 70 MDWs could be drilled in Sections 14, 15, 22, 23, 24, 26, 27, 34, and 35, of T.13S., R.90W., 6`h Principal Meridian, Gunnison County, Colorado. Pads and access to the MDWs aze shown on the attached map and will be field-fitted with the cooperation of the United States Forest Service (USFS). The USFS has completed an Environmental Analysis (EA) For this project. Additional exploration or other holes in conjunction with this project may be required. The USFS EA includes up to 10 exploration holes. If such additional holes aze required, MCC anticipates they would be drilled from the same pads using the same access as depicted on the map. The exploration holes, if required, would be logged. The cultural and biological assessments have addressed the access roads and pad locations. A schedule of drilling these holes is shown in Table 1. It is anticipated that a total of 70 acres would be disturbed. However, reclamation will occur as soon as practicable and this practice has been effective on previous disturbed lands within the project azea. The proposed project is within the current permitted coal mining area on Federal Coal Leases COC-56447 and C-1362, held by Arch Coal Inc. The Methane Drainage Well Project Surface Map at a scale of 1" = 1000' depicts the general locations of potential drill pads, potential methane drainage wells, existing roads, and road improvements relevant to the mine permit and lease boundaries. SURFACE TOPOGRAPHY The elevations of the proposed MDWs locations range from 6,400 ft. at drill hole pad 18- 04, in Box Canyon, in Section 14, to 8,600 ft. at the 23-OS drill hole pad, on West Flat Iron Mesa in Section 23. The terrain is comprised of steep slopes and mesa tops formed within the Wasatch and Mesa Verde Formations and the colluvium and alluvium layers of the slope debris. The principle drainages in this area is an unnamed tributary of Deep Creek, which flows northeast into Ravens Creek and thence into the North Fork of the Gunnison River and Sylvester Gulch that also flows northwazd into the North Fork of the Gunnison River. Drainage from a portion of Longwall Panel 17S flows to unnamed ephemeral gulches and finally to the Dry Fork of Minnesota Creek. The watercourses in the drilling area aze intermittentlephemeral in nature and do not flow year-round. GEOLOGY