Bearcreek coal field, Montana, USA. This undervalued asset comprises over 389MM tons of high btu coal US COAL RESERVES AVAILABLE FOR JOINT VENTURE

2 The Bearcreek coal field spans an area of 8,120 acres and is one of the few privately owned, fee properties available of its kind in the Western U.S.

3 USGS MAP OF THE BIG HORN BASIN A PROVEN RESOURCE FOR COAL

4 USGS MAP BIG HORN BASIN COAL FORMATIONS IN MONTANA AND WYOMING, USA

5 LOCATION OF BEARCREEK COAL FIELD CARBON COUNTY, MONTANA

6 History of the Bearcreek Coal Field First discovered in Northern portion was commercially mined around 1900 with the arrival of the Yellowstone Park Railway. Underground coal mining peaked in the early 1920s at more than one million tons per year, when Bearcreek coal powered railroad locomotives, and heated homes throughout Montana. Approximately forty million tons were produced during this period. Production gradually diminished with the development of diesel-powered locomotives, and use of natural gas for residential heating. Following a brief revival of coal production during World War II, most of the mines in the area such as the Smith mine (pictured at right) were closed by the early 1950’s. In the early 1980’s, approximately 35,000 tons were produced before operations were discontinued. No additional production has occurred since that time. The Smith Mine circa 1920 No significant production has occurred since mining was discontinued in the 1940’s. Large areas of the Bearcreek coal field remain undeveloped; there is an estimated 389,000,000 tons in place.

7 DESCRIPTION OF THE COAL BEDS FOUND IN THE FORT UNION FORMATION There are seven different coal seams that run throughout Bearcreek ranging in thickness from 4 to 12 feet, and consistent with the findings as reported by the USGS. The Bearcreek field contains an estimated 22 million plus strippable tons, and over 389 million tons that can be produced using underground mining methods.

8 ABOUT THE BEARCREEK COAL RESERVES Privately owned, fee simple coal. Not leased. Rights to all coal underlying 8,120 contiguous surface acres Bearcreek contains an estimated reserve of more than 389 million tons in place of thermal coal. The Bearceek coal is high quality coal with an average heat value of 12,800 btu per pound, and average sulfur of 1.2% on an as-received basis, and this may be reduced through washing down to less than 1%. CEHI owns a small portion of surface land (20 acres). Most of the surface acreage is owned by an affiliate of Sinclair, an oil and gas company. There are an estimated 300 to 400 million tons of coal located on adjacent property to the south and west of Bearcreek. A large portion of this coal is on federal property which is potentially available for lease. These neighboring reserves can most easily be accessed via Bearcreek. The owner of Bearcreek reserves therefore is in position to control development of approximately 750 plus million tons of high btu coal.

9 Bearcreek is very isolated. There are no houses, forests, wildlife issues or cultural artifact issues preventing future development of this coal field.

10 TRANSPORTATION The Bearcreek coal field has access to the BNSF railway in nearby Bridger, Montana, located 19 miles from the coal. The former rail spur linking the coal to Bridger was disassembled in the 1940’s. The rail bed still exists and potentially could be utilized to connect the coal to the main line in Bridger. Alternative transportation methods include trucking, slurry pipeline, and overland conveyor system.

11 ON SITE DEVELOPMENT The Bearcreek opportunity has excellent potential to provide long term energy supplies for a future power plant, coal to liquids or gasification facilities. Conditions in Bearcreek are favorable for development; there are no problem issues involving wildlife species, forests, cultural artifacts, or other such obstacles preventing development. Carbon County is one of the poorest counties in the state of Montana. Local officials have expressed support for development and the jobs and tax revenues a mining and/or processing facility would bring to the area. Future development of Bearcreek will require a mining permit. The process to receive a permit is estimated to require 12 to 18 months.

12 Why Own This Coal? Benefits / Advantages: Undervalued asset with excellent future potential Very low acquisition cost Fee simple ownership, no lease payments for coal No carrying costs or taxes until development Large strategic asset: over 389,000,000 tons of good quality, high btu coal (11–13,000 btu) Opportunities for coal shipments off-site, and/or to supply on-site processing facilities using new technologies

13 The Bearcreek coal field is a rare acquisition opportunity given its size, location, and favorable development conditions.

14 The Current Owner of the Bearcreek Coal: Carbon Energy Holdings, Inc. Carbon Energy Holdings, Inc. (“CEHI”) is a privately held Nevada corporation formed in 2006 as a minerals holding company. CEHI’s sole asset is the wholly owned subsidiary, Carbon Energy Reserve, Inc. (“CER”). CER is the title holder to the large coal reserves known as the Bearcreek coal field. CARBON ENERGY HOLDINGS, INC. (CEHI) A Privately held Nevada Corporation CARBON ENERGY RESERVE, INC. (CER) WHOLLY OWNED SUBSIDIARY AND TITLE HOLDER OF BEARCREEK COAL RESERVES

15 CEHI is offering the Bearcreek coal field for purchase. The asset is owned fee simple, with no carrying costs until development. Purchase offers are being solicited at this time. An overview can be found online at: beartoothmtncoal.com Contact: Gordon F. Lee CEHI-CEO Facsimile:

16 THANK YOU