2008-07-28_PERMIT FILE - X200822902 (3)

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Peabodq Peabody Energy Colorado Coal Resources, LLC ileclety e® 0` Z b 10 D ?or I of aid SdOW July 24, 2008 701 Market Street St. Louis, Missouri 63101-1826 314-342-3400 Mr. Jason Musick Colorado Division of Reclamation, Mining and Safety 1313 Sherman St., Room 215 Denver, CO 80203 Phone (303) 866-3567 Re: Lorencito Underground Project - 2008 Notice of Intent to Explore Dear Mr. Musick: Colorado Coal Resources, LLC (CCR), a wholly-owned subsidiary of Peabody Energy Corporation (Peabody) is submitting this Notice of Intent (NOI) for exploration access, drill-pad development, drilling, sampling of 10 core holes, and subsequent reclamation of exploration disturbances on the Lorencito Underground Project area. The project area is shown on Map 1, Lorencito Proposed Drilling 2008. The proposed exploration activities are planned for summer and fall of 2008. The exploration program will provide CCR with additional geologic and coal quality information needed to assess coal recovery and economic feasibility of the Lorencito Underground Project. Duplicate copies of this NOI are being forwarded to the Las Animas County Clerk and Recorder to be put on file at the county courthouse. The NOI submittal includes Parts I-III of the CDRMS NOI form and corresponding supplemental or supporting information. A cultural resources report is not included since existing well pads and access roads on the property have already disturbed the sites where exploration drilling will occur. The Colorado Division of Wildlife (CDOW) has been consulted regarding wildlife and T & E status for the project area (see CDOW consultation request letter in the supporting information attached to the NOI). The CDOW consultation report has not been received at this time. Michael Trujillo from the CDOW regional office in Pueblo was contacted Friday, July 18, and he stated that they were completing the consultation report and it would be forwarded as soon as it was completed. He is familiar with the project area and did not anticipate any issues. I will fax a copy of the report to CDRMS as soon as I receive it. The exploration drilling program for the Lorencito Underground Project area is somewhat unique in that it will use existing coal bed methane (CBM) well pads and the extensively developed road network to these pads. The project is all on private surface and will explore private coal. The Hill Ranch is the surface owner of the property and controls and coordinates activities and access with Pioneer Energy, who operates the CBM well field. The reclamation to restore the pads to their original configuration is fairly straight forward and will entail minor backfilling, regrading, and replacement of the gravel cover. The core