THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2008 is approximately 13 years. This index is calculated using total proved reserves and estimated 2009 production for the underlying properties. The projected 2009 production is from proved developed producing reserves as of December 31, 2008. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the underlying properties are approximately 92% natural gas and 8% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2008, 2007 and 2006 — Costs.” Total 2008 development costs deducted for the underlying properties were $46 million, an increase of 8% from the prior year. XTO Energy has informed the trustee that total 2009 budgeted development costs for the underlying properties are approximately $33 million.

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2008 is approximately 13 years. This index is calculated using total proved reserves and estimated 2009 production for the underlying properties. The projected 2009 production is from proved developed producing reserves as of December 31, 2008. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the underlying properties are approximately 92% natural gas and 8% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2008, 2007 and 2006 — Costs.” Total 2008 development costs deducted for the underlying properties were $46 million, an increase of 8% from the prior year. XTO Energy has informed the trustee that total 2009 budgeted development costs for the underlying properties are approximately $33 million.

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2008 is approximately 13 years. This index is calculated using total proved reserves and estimated 2009 production for the underlying properties. The projected 2009 production is from proved developed producing reserves as of December 31, 2008. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the
underlying properties are approximately 92% natural gas and 8% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2008, 2007 and 2006 — Costs.” Total 2008 development costs deducted for the underlying properties were $46 million, an increase of 8% from the prior year. XTO Energy has informed the trustee that total 2009 budgeted development costs for the underlying properties
are approximately $33 million.

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2008 is approximately 13 years. This index is calculated using total proved reserves and estimated 2009 production for the underlying properties. The projected 2009 production is from proved developed producing reserves as of December 31, 2008. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the
underlying properties are approximately 92% natural gas and 8% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2008, 2007 and 2006 — Costs.” Total 2008 development costs deducted for the underlying properties were $46 million, an increase of 8% from the prior year. XTO Energy has informed the trustee that total 2009 budgeted development costs for the underlying properties
are approximately $33 million.

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2008 is approximately 13 years. This index is calculated using total proved reserves and estimated 2009 production for the underlying properties. The projected 2009 production is from proved developed producing reserves as of December 31, 2008. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the
underlying properties are approximately 92% natural gas and 8% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2008, 2007 and 2006 — Costs.” Total 2008 development costs deducted for the underlying properties were $46 million, an increase of 8% from the prior year. XTO Energy has informed the trustee that total 2009 budgeted development costs for the underlying properties
are approximately $33 million.

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2007 is approximately 14 years. This index is calculated using total proved reserves and estimated 2008 production for the underlying properties. The projected 2008 production is from proved developed producing reserves as of December 31, 2007. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the underlying properties are approximately 89% natural gas and 11% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2007, 2006 and 2005 — Costs.” Total 2007 development costs deducted for the underlying properties were $42.8 million, a decrease of 17% from the prior year. XTO Energy has informed the trustee that total 2008 budgeted development costs for the underlying properties are approximately $46.0 million.

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2007 is approximately 14 years. This index is calculated using total proved reserves and estimated 2008 production for the underlying properties. The projected 2008 production is from proved developed producing reserves as of December 31, 2007. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the
underlying properties are approximately 89% natural gas and 11% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis  — Years Ended December 31, 2007, 2006 and 2005 — Costs.” Total 2007 development costs deducted for the underlying properties were $42.8 million, a decrease of 17% from the prior year. XTO Energy has informed the trustee that total 2008 budgeted development costs for the underlying
properties are approximately $46.0 million.

THE UNDERLYING PROPERTIES

THE UNDERLYING PROPERTIES

The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2005 is approximately 15 years. This index is calculated using total proved reserves and estimated 2006 production for the underlying properties. The projected 2006 production is from proved developed producing reserves as of December 31, 2005. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the underlying properties are approximately 94% natural gas and 6% oil. XTO Energy operates approximately 94% of the underlying properties.

Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See “Trustee’s Discussion and Analysis—Years Ended December 31, 2005, 2004 and 2003—Costs.”  Total 2005 development costs deducted for the underlying properties were $39.2 million, an increase of 84% from the prior year. XTO Energy has informed the trustee that total 2006 budgeted development costs for the underlying properties are approximately $40 million.

In January 2006, XTO Energy announced that it will consider selling the underlying properties. Statements below regarding 2006 development plans assume that XTO Energy will continue to own and operate the underlying properties.

THE UNDERLYING PROPERTIES

        The underlying properties are predominantly gas-producing properties with established production histories in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma and the Green River Basin of Wyoming. The average reserve-to-production index for the underlying properties as of December 31, 2004 is approximately 15 years. This index is calculated using total proved reserves and estimated 2005 production for the underlying properties. Based on estimated future net cash flows at year-end oil and gas prices, the proved reserves of the underlying properties are approximately 94% natural gas and 6% oil. XTO Energy operates approximately 95% of the underlying properties.

        Because the underlying properties are working interests, production expense, development costs and overhead are deducted in calculating net profits income. As a result, net profits income is affected by the level of maintenance and development activity on the underlying properties. See "Trustee's Discussion and Analysis—Years Ended December 31, 2004, 2003 and 2002—Costs." Total 2004 development costs deducted for the underlying properties were $21.3 million, an increase of 64% from the prior year. XTO Energy has informed the trustee that total 2005 budgeted development costs for the underlying properties are approximately $30 million.