Mountaineer CBM Operations is our coalbed methane project in southwestern Pennsylvania and northern West Virginia. CNX Gas had a legacy position of 523,000 net acres in this play, but had no systematic development effort. Fifteen wells were drilled in 2006, when the company proved it could economically engineer the gas out of the ground. In 2007, 62 wells were drilled, exceeding the goal of 57 wells.

The drilling in 2006 had occurred on the Blacksville reserves in the Pittsburgh #8 seam. By year-end 2006, these reserves had been totally drilled. That meant that for 2007, drilling would be occurring in three new areas: Greene Hill and Fallowfield in Pennsylvania, and St. Cloud in West Virginia.

New infrastructure had to be built in all three areas. In Mountaineer, midstream infrastructure includes gathering pipeline, compression, as well as processing. Gas processing is necessary in various circumstances to remove inert gases such as carbon dioxide and nitrogen. The gas is saturated with water, however; there are no liquids to be stripped in order to make the gas pipeline quality.

Production from Mountaineer got off to a slow start in the first quarter of 2007 because the first wells drilled in these new areas required additional time to de-water. They appeared to be draining areas in excess of their 480-acre spacing. Follow-up wells in these new areas saw de-watering times close to what had been experienced in 2006 at Blacksville.

In 2006, the Blacksville drilling had been on 640-acre spacing using a well design the company referred to as a turkey-foot. The design was a simple three-lateral design. While this design achieved the target production of nearly 4 Mcf per hundred lateral feet, there were certain inefficiencies that led to the development of a new design, which we refer to as an asymmetrical quad. The accompanying graphic shows this new design, first implemented at the beginning of 2007, which has allowed for more uniform drainage. It also has the added benefit of enabling the company to drill horizontal wells on a tighter, 480-acre spacing. If wells from this design continue to validate initial results, it could lead to approximately 200 additional well locations in Mountaineer.

Wells from the Fallowfield area first came on line in December 2007. One of the first horizontal wells was brought on-line at a rate of nearly 900 Mcf per day. This is a record for any well in Mountaineer. As a point of reference, Fallowfield is in Washington County, Pa.

One potentially significant development in Mountaineer was the leasing of a 20,000-acre block from Massey Energy. This acreage, directly across a river from our Fallowfield acreage represented CNX Gas’ first step-out opportunity from CONSOL Energy-controlled coal. CNX Gas intends to explore the Massey reserves during 2008, in order to show how the company can add value for shareholders of other coal companies.

Overall, CNX Gas expects to drill 116 wells in Mountaineer in 2008 on a current position of 684,000 net acres. Production from Mountaineer in 2008 is estimated to be about 10 Bcf.