May 31, 2002

PetroAcct would like to bring to the attention of our clients and our future clients the new information compliance requirements of Texas HB 981. The main objective of the bill is to have additional information printed on revenue / royalty check stubs and the providing of producer contact information annually for Texas properties. The highlights are:

Requires that a property name, county, and state be included on the check stub in addition to the items already required by statute. Also, it is now mandatory to include on the check stub a telephone number for contacting the company regarding payment questions. A new stipulation requires that certain types of inquiries must be handled within sixty (60) days of request by certified mail. These inquiries must be about check stub items that were required but not included, e.g., property description, detail about deductions or adjustments, heating value of gas produced or sold, or a report of associated Texas Railroad Commission numbers.

Once a year, a payor must send a notice to the owners it is paying and advise them that the owner may request additional information and how to obtain production information from the Texas Railroad Commission. Payors that do not respond to such a request timely and by certified mail may be subject to a lawsuit or voluntary mediation. The remedy provided requires the loser to pay reasonable court costs and attorney fees.

The effective dates for HB 981 are January 1, 2002, for the changes to the property description request requirement and September 1, 2002, where system changes are required. The above is just a highlight of this bill, please refer to the bill for complete details.

Respectfully Yours,

J. Michael Tissue

Executive Vice President