(4) Investment in Sunrise Energy (Sunrise Energy)

6 Months Ended

Jun. 30, 2012

Sunrise Energy

Equity Investment In Sunrise Energy

(4)            Investment in Sunrise Energy

In late December 2010, we invested $2.375 million for a 50% interest in Sunrise Energy, LLC which then purchased existing gas reserves and gathering equipment from an unrelated third party with plans to develop and operate such reserves. During January 2012 we invested an additional $506 thousand. Sunrise Energy also plans to develop and explore for coal-bed methane gas reserves on or near our underground coal reserves. They use the successful efforts method of accounting. We account for our interest using the equity method of accounting.

Below (in thousands) to the 100% are a condensed balance sheet at June 30, 2012 and a condensed statement of operations for the six months ended June 30, 2012 and 2011.

Condensed Balance Sheet

	2012
Current assets	$	2,368
Oil and gas properties, net		6,211
	$	8,579
Total liabilities	$	922
Partners' capital		7,657
	$	8,579

Condensed Statement of Operations

	2012			2011
Revenue	$	1,086		$	2,217
Expenses		(1,023	)		(1,128	)
Net  income	$	63		$	1,089