Our Relationship with Vinland

  General.   Effective January 5, 2007 our predecessor was separated in the Nami Restructuring Plan into our operating subsidiary and Vinland Energy Eastern, LLC, an affiliate of Mr. Nami, who together with certain of his affiliates and related persons, is our largest unitholder. We believe that one of our principal strengths is our relationship with Vinland. Vinland's senior management team has an average of approximately 25 years of experience operating in the Appalachian Basin and has operated our assets on behalf of our predecessor in southeast Kentucky and northeast Tennessee since 1999. Since its formation in 1999 through the acquisition of producing properties from American Resources, Vinland has grown our predecessor through the drilling and completion of gross productive wells as well as through the acquisition of various producing properties. From 2004 through December 31, 2006, our predecessor added an estimated 21.4   Bcfe of proved natural gas and oil reserves through drilling activities.

  Acquisition of Assets.   A principal component of our business strategy is to grow our asset base and production through the acquisition of natural gas and oil properties characterized by long-lived, stable production. Vinland's business strategy is to develop and divest natural gas and oil properties, generally every 12 to 24 months. We believe that the complementary nature of Vinland's and our business strategies, the proximity of our respective asset bases, Nami's significant equity interest in us and our right to make a first offer on future sales by Vinland of properties located within our area of mutual interest will provide us with a number of acquisition opportunities from Vinland in the future. However, Vinland has no obligation or commitment to sell any such properties to us, and can be expected to act in a manner that is beneficial to its interests.

  Operation and Development of Assets.   Effective as of January 5, 2007, we entered into various agreements with Vinland, under which we will rely on Vinland to operate our existing producing wells and coordinate our development drilling program. Pursuant to our participation agreement with Vinland, Vinland has control over our drilling program and has the sole right to determine which wells are proposed to be drilled. As of March 31, 2007, Vinland operated substantially all of our wells.

  Under a management services agreement, Vinland advises and consults with us regarding all aspects of our production and development operations, and provides us with administrative support services as necessary for the operation of our business. Pursuant to this agreement, we pay Vinland a monthly fee equal to $60 per producing well for the services provided under the agreement.

  Gathering and Compression.   Under a gathering and compression agreement that we entered into with Vinland, Vinland will gather, compress, deliver and provide the services necessary for us to market our natural gas production in the area of mutual interest. Vinland will deliver our natural gas production to certain designated interconnects with third-party transporters. We pay Vinland a fee of $0.25 per Mcf, plus our proportionate share of fuel and line loss for producing wells as of January 5, 2007. For all wells drilled after January 5, 2007, we pay Vinland a fee of $0.55 per Mcf, plus our proportionate share of fuel and line loss.