Letter from President Spaniolo

October 25, 2007

To the University Community:

In previous communications, I promised that I would keep you informed as we move forward with our natural gas exploration and production program.

There are four phases in the process of exploring for and producing natural gas in the Barnett Shale. The Seismic Phase is the process of acquiring 3-D seismic information to evaluate the subsurface; the Drilling Phase is the process of constructing the drill site area and drilling through the subsurface; the Completion Phase is the process of fracture stimulating the well to allow the natural gas to flow; and the Production Phase is the process of producing the natural gas from the well and delivering it to market.

During the past several months, our contractor, Carrizo Oil & Gas, Inc., has been working closely with UT Arlington, the City of Arlington, and others to complete the steps necessary to explore for natural gas on UT Arlington property.  Carrizo has provided the University with all relevant information needed to assess the viability of responsible development of our campus for natural gas production, including an emergency preparedness plan, environmental and archaeological assessments, site plans, water plans, truck routes, insurance documentation, and equipment and material use descriptions.  This extensive and comprehensive information has given the University the assurance to authorize Carrizo to develop the campus safely and reliably and to proceed with drilling and production of natural gas.

The seismic phase was completed by Carrizo in August.  Carrizo will soon begin initial preparation for the drilling phase of the site at the southeast corner of our campus. As I have consistently emphasized, the University is currently committed to drilling at only that one site. Although other potential sites have been identified, the University will not allow drilling at any other sites until initial drilling at the first site is complete and the process has been thoroughly reviewed and assessed.

The anticipated timeline for the drilling phase is as follows:

Late October – Early November 2007 — Carrizo will begin preparing the drill site for the drilling phase, including erecting perimeter fencing and safety and security barriers, clearing debris from the drill site, and installing equipment needed for the drilling process.  You will begin to see more traffic going into and out of the site, primarily along the City of Arlington approved routes of Cooper and Mitchell Streets.

Mid-to-Late-November 2007 — Carrizo will set up the drilling equipment and commence the drilling process using a state-of-the-art drilling rig that will have a noticeably decreased impact on the surrounding community than would conventional equipment.  This rig will result in less noise, cleaner emissions, and quicker drilling, making this phase of operations a more efficient process.  Each well will take approximately 20-25 days to drill, with the initial drilling phase from this site expected to continue through early 2008.

Please understand that this is a projected schedule, which we will work diligently to maintain.  However, it is possible that minor schedule changes may occur. UT Arlington and Carrizo will do everything possible to stay on schedule.

As our natural gas program progresses, I will continue to communicate with the University community on a regular basis. We also have created a web site that will always include the latest news and information.  Please visit our site at www.uta.edu/naturalgas.  And, of course, you’re welcome to contact me directly at jds@uta.edu.

Thank you for your understanding as we continue with this important project, which will strengthen and enhance the entire University community.

Sincerely,

James D. Spaniolo
President
The University of Texas at Arlington