The above transaction was presented to the Board on 1-29-2001. There was 
considerable discussion which I have summarized below.

Returns: were the returns sufficient to syndicate the risk. I answered 
positively, which is what the capital price addresses. The dash return is a 
blended debt and equity return.(?)

Was the $19 million excess proceeds enough to allow the company to operate. I 
answered yes since 85% of reserves are producing and little capital will be 
needed to develop pdnp and pud reserves.

Is management capable of operating or will they be in chapter 11 again soon. 
I answered that the bankruptcy was a result of overpaying for Wyoming deal 
and low commodity prices last two years which resulted in a bb decrease below 
outstanding. We will have to watch this issue carefully.

Are banks reluctant to support KCS and could this cause a liquidity problem? 
Answered that all creditors were made whole and likely that someone will come 
into credit but it was a risk, although for the time being they had enough 
cash to operate.

This feedback is just for fyi but it does indicate that board is active and 
not a rubber stamp.

 Rick