This document describes the payment practices of J-W Operating Company. After reading this document, we hope you will have a better understanding of your check detail. You may want to add this page to your favorites in case you have questions at a later date. We are pleased to have you as an owner and want to assist you in every way possible to understand the payments you receive.

Items on Your Check Detail

The check detail includes information for both the total lease interest sold by J-W Operating Company and your ownership interest therein. Information specific to your ownership interest can be found in the four columns on the right side of the check detail under the “Owner” heading. The remainder of the columns on the check detail contains total lease information. Following is an example of our check detail and definitions for all items shown.

(a) Property I.D. A name, number, or combination of name and number that identifies the lease, property, unit, or well or wells for which payment is being made.

(b) Production Date. The month and year during which the sale occurred for which payment is being made. This check may contain adjustments for prior production periods.

(c) Product Code. Oil or Gas.

(d) Type Interest. Payee’s (your) interest type: W=working interest; R=basic royalty; or O=overriding royalty.

(e) Price. The price received per unit of measurement, which shall be the price per barrel (“Bbl”) in the case of oil and the price per thousand cubic feet (“Mcf”) in the case of gas. Product sold to different purchasers during the production month will be averaged together to obtain a weighted average price (WAP) for that property.

(f) Sold Volume (J-W Operating Company’s Gross Distribution Share). The total quantity of product sold attributable to such payment, including the units of measurement for the sale of such product. If the product sold is oil, the unit of measurement is Bbl. If the product sold is gas, the unit of measurement is Mcf.

(g) Value (J-W Operating Company's Gross Distribution Share). The total value, before deductions, of oil or gas sold from the property by the interests represented by J-W Operating Company.

(h) Deductions for Taxes (J-W Operating Company's Gross Distribution Share). The total amount of severance taxes and any other production taxes or levies applied to the sale. The type of tax will be identified as Severance Tax, Ad Valorem Tax, Conservation Mill Levy, etc.

(i) Deductions for costs other than taxes listed in (h) (J-W Operating Company's Gross Distribution Share). If applicable, the types of deductions will be identified as Transportation, Gathering, Compression, etc.

(j) Net (J-W Operating Company's Gross Distribution Share). Net value, after all deductions, of oil and gas sold from the property by the interest represented by J-W Operating Company.

(k) Interest. That portion of your total ownership interest, as specified on the division order, to be paid by J-W Operating Company.

(l) Paid Interest. The payee’s (your) interest in the sale, expressed as a decimal and calculated to at least the sixth decimal place. Your share of the oil or gas sold from the property for which J-W Operating Company is responsible for payment distribution. Your “Paid Interest” may be greater than your “Interest” in cases where the working interest participation in gas sold to a purchaser is less than 100%. Your “Paid Interest” also may differ from month to month as a result of complex marketing arrangements involving gas sales to multiple purchasers and changing participation.

(m) Owner/Volume. The payee’s (your) share of gross Sold Mcf/Bbl.

(n) Owner/Value. The payee’s (your) share of gross Value before any deductions or adjustments.

(o) Owner/Deductions. The payee’s (your) share of gross Deductions described in (h) and (i) above.

(p) Owner/Net Share. The payee’s (your) share of the Net value after any deductions or adjustments.

(q) Owner No. This number is assigned exclusively to you as an interest owner. This number should be used as a reference when making inquires.

(r) Check Amount. This is the total amount paid to you on this check for your net value share of oil and gas sold from all properties listed on the check.

(s) An address and telephone number from which additional information may be obtained and questions answered.

(t) Owner’s Total Sold Volume for all properties on check.

(u) Owner’s Total Value for all properties on check.

(v) Owner’s Total Deductions for all properties on check.

(w) Owner’s Total Net Share for all properties on check.

Payment Schedule

Generally, checks for properties located in South Texas, Mississippi and Louisiana are mailed out the 15th of the month. Checks for properties in Colorado and East Texas are generally mailed on the 25th of each month. Should the 15th or 25th fall on a weekend or holiday, your check will be mailed on the next regular business day.

Please note that J-W Operating Company has a minimum payment policy that defers issuance of checks until the aggregate amount due is at least $100.00 or the minimum amount required by statute or lease. You will automatically be issued a check in the month that your account has accumulated to this minimum amount. Once a year, any funds in excess of $10.00, without regard to the $100.00 minimum, will be released.

What If I Have A Question?

If you have questions, please contact us by means of one of the following options:

Change of Ownership or Address

Please notify us promptly, in writing, of any changes in your ownership interest. Also, to ensure your payments reach you promptly, you should notify us immediately, in writing of any change of your mailing address. Be sure to include your owner number and Social Security Number or Tax I.D. in your notification. Also, please sign your notification. If you decide to, this information may be faxed to us.

What If My Check Is Lost?

J-W Operating Company cannot place a stop payment on a lost check until the check is at least 15 days old. If you have not received your check after 15 days of the anticipated mailing date, please notify Owner Relations to have this payment reissued on a subsequent check, which would be mailed the next available check run.