SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

FORM U5S
ANNUAL REPORT
For the Fiscal Year Ended September 30, 2001

Filed Pursuant to the

Public Utility Holding Company Act of 1935

by
National Fuel Gas Company
10 Lafayette Square, Buffalo, N.Y. 14203

NATIONAL FUEL GAS COMPANY

FORM U5S - ANNUAL REPORT
For the Fiscal Year Ended September 30, 2001

TABLE OF CONTENTS
                                                                          Page
                                                                          ----

ITEM  1.  SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF
          SEPTEMBER 30, 2001                                                3

ITEM  2.  ACQUISITIONS OR SALES OF UTILITY ASSETS                           8

ITEM  3.  ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF
          SYSTEM SECURITIES                                                 8

ITEM  4.  ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM
          SECURITIES                                                        9

ITEM  5.  INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES                 10

ITEM  6.  OFFICERS AND DIRECTORS
          Part   I.  Names, principal business address and
                     positions held as of September 30, 2001               11
          Part  II.  Financial connections as of September 30, 2001        15
          Part III.  Compensation and other related information            15

ITEM  7.  CONTRIBUTIONS AND PUBLIC RELATIONS                               21

ITEM  8.  SERVICE, SALES AND CONSTRUCTION CONTRACTS
          Part   I.  Intercompany sales and services
                     (1)  Salaries of officers of the Registrant           22
                     (2)  Services rendered by Statutory Subsidiaries      23
                     (3)  Services rendered by Registrant                  29
          Part  II.  Contracts to purchase services or goods
                     between any System company and any affiliate          30
          Part III.  Employment of any person by any System
                     company for the performance on a continuing
                     basis of management services                          30

ITEM  9.  WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES               30

ITEM 10.  FINANCIAL STATEMENTS AND EXHIBITS
          Financial Statements (Index)                                     35
          Exhibits                                                         87

SIGNATURE                                                                  98
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 2001

                           Number of Common  Percent of    Issuer    Owner's
Name of Company              Shares Owned   Voting Power Book Value Book Value
---------------            ---------------- ------------ ---------- ----------

Registrant:                                             (Thousands of Dollars)
National Fuel Gas Company
(Parent, Company or Registrant)          -            -           -          -

Statutory Subsidiaries:
 National Fuel Gas Distribution
  Corporation (Distribution
  Corporation) (Note 1)              2,000         100%    $512,400   $512,400
    Unsecured Debt (Note 9)              -            -    $373,600   $373,600

 National Fuel Gas Supply
  Corporation (Supply
  Corporation) (Note 2)          1,013,802         100%    $289,411   $289,411
    Unsecured Debt (Note 9)              -            -    $148,400   $148,400

 Seneca Resources Corporation
  (Seneca Resources) (Note 3)      100,000         100%    $ 81,744   $ 81,744
    Unsecured Debt (Note 9)              -            -    $911,900   $911,900
  National Fuel Exploration Corp.
   (NFE)                       115,000,000         100%    $(32,171)  $(32,171)
   Unsecured Debt (Note 9)               -            -    $253,005   $253,005
    National Fuel Exploration
     Acquisition Corp. (Note 3)        100         100%    $(75,231)  $(75,231)
      Player Resources, Ltd.
      (Note 3)                           -         100%    $(75,231)  $(75,231)
  Empire Exploration Company,
    Empire 1983 Drilling
    Program, Empire 1983
    Joint Venture (Note 10)            N/A         N/A     $    970   $    970

 Highland Forest Resources, Inc.
  (Highland) (Note 4)                4,500         100%    $  8,683   $  8,683
  Unsecured Debt (Note 9)                -            -    $ 62,900   $ 62,900

 Data-Track Account Services,
  Inc. (Data-Track) (Note 5)         1,000         100%    $    768   $    768

 Leidy Hub, Inc. (Leidy Hub)
  (Note 6)                           4,000         100%    $    730   $    730

 National Fuel Resources, Inc.
 (NFR) (Note 7)                     10,000         100%    $ 30,287   $ 30,287
   Unsecured Debt (Note 9)               -            -    $ 19,000   $ 19,000

 Horizon Energy Development, Inc.
  (Horizon) (Notes 8 and 11-12)      4,750         100%    $  8,855   $  8,855
    Unsecured Debt (Note 9)              -            -    $103,700   $103,700
  Sceptre Power Company *(Note 11)     N/A         100%    $  3,948   $  3,948
  Horizon Energy Holdings, Inc.
   (HEHI)(Note 12)                   2,000         100%    $112,492   $112,492
     Horizon Energy Development
      B.V. (HED B.V.)(Note 12)         400         100%    $112,492   $112,492
       Unsecured Debt (Note 9)           -            -    $    120   $    120
      United Energy, a.s. .
       (UE) (Note 12)            8,405,037       85.16%    $104,366   $112,819
        Unsecured Debt (Note 9)          -            -    $ 45,575   $ 45,575
       Teplarna Liberec, a.s.
        (TL) (Note 12)                  70          70%    $  9,181   $  8,187
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 2001 (Continued)

                           Number of Common  Percent of    Issuer    Owner's
Name of Company              Shares Owned   Voting Power Book Value Book Value
---------------            ---------------- ------------ ---------- ----------

Registrant:                                             (Thousands of Dollars)

       Lounske tepelne
        Hospodarstvi, s.r.o
        (LTH) (Note 12)                N/A         100%    $     53   $     53
       Teplo Branany, s.r.o. (TB)
        (Note 12)                      N/A          49%    $      1   $      1
       ENOP Company, s.r.o.
         (ENOP)(Note 12)               N/A         100%    $    142   $    242
      Horizon Energy Development,
       s.r.o. (HED) (Note 12)          N/A         100%    $  2,335   $  2,335
      Power Development, s.r.o.
       (PD) (Note 12)                  N/A         100%    $      2   $      2
       Teplarna Kromeriz a.s.
        (Kromeriz) (Note 12)           375         100%    $    (63)  $    (63)
         Unsecured Debt (Note 9)         -            -    $     82   $     82

 Upstate Energy Inc. (Upstate)
  (Note 13)                          1,000         100%    $   (215)  $   (215)
   Unsecured Debt (Note 9)               -            -    $  3,600   $  3,600

 Seneca Independence Pipeline
  Company (SIP) (Note 14)            1,000         100%    $    468   $    468
   Unsecured Debt (Note 9)               -            -    $ 13,200   $ 13,200

 Niagara Independence Marketing
  Company (NIM) (Note 15)            1,000         100%    $      1   $      1

 Horizon Power, Inc. (Power)
   (Note 16)                         1,000         100%    $  5,736   $  5,736
   Unsecured Debt (Note 9)               -            -    $ 12,200   $ 12,200
   Seneca Energy II, LLC
     (Seneca Energy)                   N/A          50%    (Note 16)  (Note 16)
   Model City Energy, LLC
     (Model City)                      N/A          50%    (Note 16)  (Note 16)
   Energy Systems North East, LLC
     (ESNE)                            N/A          50%    (Note 16)  (Note 16)
Notes:
·	Distribution Corporation is a public utility that sells natural gas and provides gas transportation service in western New York and northwestern Pennsylvania.

·	Supply Corporation is engaged in the transportation and storage of natural gas for affiliated and nonaffiliated companies.

·	Seneca Resources is engaged in the exploration for, and the development and purchase of, natural gas and oil reserves in the Gulf Coast of Texas and Louisiana, and in California, Wyoming and in the Appalachian region of the United States. Also, exploration and production operations are conducted in the provinces of Manitoba, Alberta and Saskatchewan in Canada by Seneca's wholly-owned subsidiary, National Fuel Exploration Corp. (NFE), an Alberta, Canada corporation. NFE owns 100% of National Fuel Exploration Acquisition Corp., which owns 100% of Player Resources Ltd. (Player). National Fuel Acquisition Corp. has no operations other than serving as the holding company for the stock of Player. In addition, Seneca Resources is engaged in the marketing of timber from its Pennsylvania land holdings.

·	Highland operates several sawmills and kilns in northwestern Pennsylvania and processes timber from north-central Pennsylvania, primarily high quality hardwoods.

ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 2001 (Continued)

·	Data-Track provides collection services (principally issuing collection notices) primarily for the subsidiaries of the Company.

·	Leidy Hub is a New York corporation formed to provide various natural gas hub services to customers in the eastern United States.

·	NFR is engaged in the marketing and brokerage of natural gas and the performance of energy management services for industrial, commercial, public authority and residential end-users throughout the northeastern United States.

·	Horizon was formed to engage in foreign and domestic energy projects through investment in various business entities (see Notes 11-12).

·	Unsecured debt is presented on pages 6-7.

·	In December 1983, Empire Exploration, Inc. (which was subsequently merged into Seneca Resources) established a drilling fund through a series of limited partnerships in which it acts as general partner (See File No. 70-6909). Empire Exploration, Inc.'s aggregate investment in all three limited partnerships amounted to $970,150.

·	Horizon became one of the partners in Sceptre Power Company, a California general partnership, on September 15, 1995. This partnership was dissolved as of December 23, 1996 and is currently winding down operations.

·	Horizon owns 100% of the capital stock of HEHI, a New York corporation which owns 100% of HED B.V. HED B.V. in turn owns 100% of the ownership interests of HED, PD and Kromeriz (all Czech corporations). HED B.V. owns 85.16% of United Energy, a.s. (UE). UE owns 100% of the ownership interests of ENOP and LTH, 70% of the ownership interest of TL and 49% of the ownership interest of TB. At the end of June 2001, UE sold its 65.78% interest in Jablonecka teplarenska a realitni, a.s. (JTR). All UE subsidiaries are Czech corporations or limited liability companies. HED B.V. and its subsidiaries are primarily engaged in district heating and power generation operations in the Czech Republic.

·	Upstate is a New York corporation engaged in wholesale natural gas marketing and other energy-related activities.

·	SIP , a Delaware corporation, holds a one-third general partnership interest in Independence Pipeline Company (Independence), a Delaware general partnership. Independence proposes to construct and operate the Independence Pipeline, a 400-mile interstate pipeline system which would transport natural gas from Defiance, Ohio to Leidy, Pennsylvania.

·	NIM , a Delaware corporation, owns a one-third general partnership interest in DirectLink Gas Marketing Company, which partnership was formed to engage in natural gas marketing and related businesses, in part by subscribing for firm transportation capacity on the Independence Pipeline.

·	Power is a New York corporation designated as an "exempt wholesale generator" under the Public Utility Holding Company Act of 1935 and is developing or operating, through its subsidiaries, mid-range independent power production facilities.
Power owns a 50% limited liability company interest in each of Seneca Energy II, LLC, a New York limited liability company formed in February 2000 (Seneca Energy), Model City Energy, LLC, a New York limited liability company formed in February 2000 (Model City), and Energy Systems North East, LLC, a Delaware limited liability company formed in September 2000 (ESNE). "Issuer Book Value" and "Owner's Book Value" for Seneca Energy, Model City and ESNE are filed pursuant to Rule 104(b).

ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 2001 (Continued)

Note (9) Unsecured Debt
                                                Principal    Issuer      Owner's
Name of Company                                  Amount       Book        Book
   (Issuer)      Security Owned by Registrant     Owed        Value       Value
---------------  ----------------------------  ----------   ----------  ------------
                                                    (Thousands of Dollars)
                                               -------------------------------------
Distribution
 Corporation     Intercompany Notes:
                   7.48% Due February 18, 2003   $ 50,000     $ 50,000    $ 50,000
                   7.99% Due February 1, 2004     100,000      100,000     100,000
                   7.46% Due March 30, 2023        49,000       49,000      49,000
                   8.55% Due July 15, 2024         20,000       20,000      20,000
                   7.50% Due June 13, 2025         50,000       50,000      50,000
                   6.26% Due August 12, 2027       30,000       30,000      30,000
                   3.25% System Money Pool(1)      74,600       74,600      74,600
                                               ----------   ----------  ----------
                                                  373,600      373,600     373,600
                                               ----------   ----------  ----------
Supply
 Corporation     Intercompany Notes:
                   7.99% Due February 1, 2004      25,000       25,000      25,000
                   6.95% Due August 1, 2004        50,000       50,000      50,000
                   8.55% Due July 15, 2024         30,000       30,000      30,000
                   6.26% Due August 12, 2027       10,000       10,000      10,000
                   3.25% System Money Pool(1)      33,400       33,400      33,400
                                               ----------   ----------  ----------
                                                  148,400      148,400     148,400
                                               ----------   ----------  ----------
Seneca
 Resources       Intercompany Notes:
                   7.48% Due February 18,2003     100,000      100,000     100,000
                   6.95% Due August 1, 2004        50,000       50,000      50,000
                   6.39% Due May 27, 2008         120,000      120,000     120,000
                   6.18% Due March 1, 2009        100,000      100,000     100,000
                   7.70% Due October 22, 2010     200,000      200,000     200,000
                   6.26% Due August 12, 2027       50,000       50,000      50,000
                   3.25% System Money Pool(1)     291,900      291,900     291,900
                                               ----------   ----------  ----------
                                                  911,900      911,900     911,900
                                               ----------   ----------  ----------

NFE                3.25% Line of Credit           253,005      253,005     253,005
                   3.98% Short-Term Bank Loan      15,675       15,675      15,675
                                               ----------   ----------  ----------
                                                  268,680      268,680     268,680
                                               ----------   ----------  ----------

Highland           3.25% System Money Pool(1)      62,900       62,900      62,900
                                               ----------   ----------  ----------

Horizon          Intercompany Notes:
                   6.26% Due August 12, 2027       10,000       10,000      10,000
                   6.39% Due May 27, 2008          80,000       80,000      80,000
                   3.66% Line of credit(2)         13,700       13,700      13,700
                                               ----------   ----------  ----------
                                                  103,700      103,700     103,700
                                               ----------   ----------  ----------

Horizon Energy
 Development
 B.V. (HED B.V.)   3.66% Line of Credit(2)            120          120         120
                                               ----------   ----------  ----------

UE                 5.85%(3) Payable Quarterly
                    Through June 2006               2,283        2,283       2,283
                   5.55% Short-Term Bank Loan      10,392       10,392      10,392
                   5.56% Short-Term Bank Loan         588          588         588
                   5.40% Short-Term Bank Loan       3,118        3,118       3,118
                   5.535% (4) Payable March 2001-
                    December 2004                  15,765       15,765      15,765
                   6.35% Payable July 2001-
                    September 2006                 13,429       13,429      13,429
                                               ----------   ----------  ----------
                                                   45,575       45,575      45,575
                                               ----------   ----------  ----------
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 2001 (Concluded)

Note (10) Unsecured Debt
                                                Principal    Issuer      Owner's
Name of Company                                  Amount       Book        Book
   (Issuer)      Security Owned by Registrant     Owed        Value       Value
---------------  ----------------------------  ----------   ----------  -----------
                                                    (Thousands of Dollars)
                                               ------------------------------------

Kromeriz           8.0% Intercompany Note              82           82          82
                                               ----------   ----------  ----------

Upstate            3.25% System Money Pool(1)       3,600        3,600       3,600
                                               ----------   ----------  ----------

SIP                3.25% System Money Pool(1)      13,200       13,200      13,200
                                               ----------   ----------  ----------

NFR                3.25% System Money Pool (1)     19,000       19,000      19,000
                                               ----------   ----------  ----------

Horizon
 Power Inc.        3.60% Line of Credit(2)         12,200       12,200      12,200
                                               ----------   ----------  ----------

                                               $1,962,957   $1,962,957  $1,962,957
                                               ==========   ==========  ==========
·	Interest rate represents weighted average of all short-term securities outstanding at September 30, 2001, pursuant to System money pool arrangement, S.E.C. File No. 70-8297 (Release Nos. 25964, 26076 and 26196).

·	Interest rate represents the rate paid by respective subsidiaries on line of credit amounts outstanding at September 30, 2001.

·	Interest rate is six month PRIBOR (Prague Interbank Offered Rate) plus 0.5%.

·	Interest rate per the debt agreement is six month PRIBOR (Prague Interbank Offered Rate) plus 0.475%. However, under the terms of an interest rate swap, which extends until June 2002, UE pays a fixed rate of 8.31% and receives a floating rate of six month PRIBOR.
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
      None during fiscal year ended September 30, 2001.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
·	Name of Issuer: Horizon Energy Development, Inc.
Description of Security: Line of Credit Agreement with maximum draw of $40,000,000
Effective Average Interest Rate: 5.48%
Name of Person to Whom Issued: National Fuel Gas Company
End of Year Balance: $13,700,000
Highest Balance During Year: $13,700,000
Exemption: Rule 52

·	Name of Issuer: National Fuel Exploration Corp.
Description of Security: Line of Credit Agreement with maximum draw of $260,000,000
Effective Average Interest Rate: 5.25%
Name of Person to Whom Issued: Seneca Resources Corporation
End of Year Balance: $253,005,372
Highest Balance During Year: $253,005,372
Exemption: Rule 52

·	Name of Issuer: Horizon Energy Development B.V.
Description of Security: Line of Credit Agreement with maximum draw of $150,000
Effective Average Interest Rate: 4.6%
Name of Person to Whom Issued: Horizon Energy Development, Inc.
End of Year Balance: $120,000
Highest Balance During Year: $120,000
Exemption: Rule 52

·	Name of Issuer: Horizon Power, Inc.
Description of Security: Line of Credit Agreement with maximum draw of $20,000,000
Effective Average Interest Rate: 4.166%
Name of Person to Whom Issued: National Fuel Gas Company
End of Year Balance: $12,200,000
Highest Balance During Year: $12,200,000
Exemption: Rule 52

·	Item 9, Part I(b) for Energy Systems North East, LLC (ESNE) includes a description of notes issued by ESNE, an exempt wholesale generator.
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
               FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                       Name of
                                       Company
                                      Acquiring,
                                      Redeeming         Number of Shares or
                                     or Retiring          Principal Amount                       Commission
                                                    ----------------------------
Name of Issuer and Title of Issue     Securities    Acquired  Redeemed   Retired Consideration  Authorization
---------------------------------    -----------    --------  --------   ------- -------------  -------------
                                                              (Thousands of Dollars)
                                                    ------------------------------------
Registered Holding Company:

    Registrant:

     7.50% Note due
      November 22, 2010                  Registrant   200,000                                   File No. 70-9153

Subsidiaries of Registered Holding Company:

    Seneca Resources:
     7.70% Note maturing                 Seneca
      November 22, 2010                  Resources    200,000                       200,000     File No. 70-9153

ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
                             Number of                              Aggregate
1. Name of Owner             Persons      Business of Persons      Investment
   -------------            ---------     -------------------      ----------
None.

 ITEM 6. OFFICERS AND DIRECTORS
Part I. Names, principal business address and positions held as of September 30, 2001

                                        Names of System Companies with Which Connected
                                        ------------------------------------------------------------------------
                                                             National       National               Highland
                                                             Fuel Gas       Fuel Gas     Seneca     Forest
                                                           Distribution      Supply     Resources  Resources
                                           Registrant          Corp.          Corp.       Corp.*     Inc.
                                       -------------------------------------------------------------------------
B. J. Kennedy          Buffalo, NY (1) | D, COB, CEO, s |      D, COB, s |  D, COB, s | D, COB, s |       s |
-------------------------------------------------------------------------------------------------------------
B. S. Lee          Des Plaines, IL (2) |          D, df |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
G. L. Mazanec          Houston, TX (3) |          D, df |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
J. F. Riordan      Des Plaines, IL (17)|          D, df |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
E. T. Mann             Buffalo, NY (1) |          D, df |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
R. T. Brady            Buffalo, NY (4) |          D, df |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
W. J. Hill             Buffalo, NY (1) |          D, df |              D |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
J. V. Glynn      Niagara Falls, NY (9) |          D, df |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
P. C. Ackerman         Buffalo, NY (1) |        D, P, s |           D, s |     EVP, s |      D, s |    D, s |
-------------------------------------------------------------------------------------------------------------
J. R. Peterson         Buffalo, NY (1) |          AS, s |              - |      GC, s |         - |       - |
-------------------------------------------------------------------------------------------------------------
J. A. Beck             Houston, TX (5) |              - |              - |          - |   D, P, s |    P, D |
-------------------------------------------------------------------------------------------------------------
W. M. Petmecky         Houston, TX (5) |              - |              - |          - | SVP, S, s |       S |
-------------------------------------------------------------------------------------------------------------
D. A. Brown            Houston, TX (5) |              - |              - |          - |     VP, s |       - |
-------------------------------------------------------------------------------------------------------------
G. E. Klefstad         Houston, TX (5) |              - |              - |          - |     VP, s |       - |
-------------------------------------------------------------------------------------------------------------
E. E. Wassell          Houston, TX (5) |              - |              - |          - |     VP, s |       - |
-------------------------------------------------------------------------------------------------------------
J. F. McKnight         Houston, TX (5) |              - |              - |          - |     VP, s |       - |
-------------------------------------------------------------------------------------------------------------
B. L. McMahon      Santa Paula, CA (6) |              - |              - |          - |    SVP, s |       - |
-------------------------------------------------------------------------------------------------------------
A. M. Cellino          Buffalo, NY (1) |           S, s |      SVP, S, s |          s |         - |       - |
-------------------------------------------------------------------------------------------------------------
P. M. Ciprich          Buffalo, NY (1) |              - |      AS, GC, s |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
W. E. DeForest         Buffalo, NY (1) |              - |      SVP, D, s |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
B. H. Hale             Buffalo, NY (1) |              - |              - |  D, SVP, s |         - |       - |
-------------------------------------------------------------------------------------------------------------
J. P. Pawlowski        Buffalo, NY (1) |           T, s |   D, SVP, T, s |    T, S, s |         s |       s |
-------------------------------------------------------------------------------------------------------------
J. R. Pustulka         Buffalo, NY (1) |              - |              s |     SVP, s |         s |       - |
-------------------------------------------------------------------------------------------------------------
J. D. Ramsdell         Buffalo, NY (1) |              - |         SVP, s |          s |         s |       - |
-------------------------------------------------------------------------------------------------------------
W. A. Ross             Buffalo, NY (1) |              - |              - |   D, VP, s |         - |       - |
-------------------------------------------------------------------------------------------------------------
D. J. Seeley           Buffalo, NY (1) |              - |         SVP, s |    P, D, s |         - |       - |
-------------------------------------------------------------------------------------------------------------
D. F. Smith            Buffalo, NY (1) |              - |        P, D, s |     SVP, s |         D |       - |
-------------------------------------------------------------------------------------------------------------
R. J. Tanski           Buffalo, NY (1) |              - |      SVP, C, s |          s |         s |       s |
-------------------------------------------------------------------------------------------------------------
G. T. Wehrlin          Buffalo, NY (1) |           C, s |              - |          - |         C |       - |
-------------------------------------------------------------------------------------------------------------
C. M. Carlotti            Erie, PA (16)|              - |          VP, s |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
R. T. Evans            Houston, TX (5) |              - |              - |          - |     VP, s |       - |
-------------------------------------------------------------------------------------------------------------
T. L. Atkins           Houston, TX (5) |              - |              - |          - |  T, AS, s |       T |
-------------------------------------------------------------------------------------------------------------
D. L. DeCarolis  Williamsville, NY (12)|              - |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
J. F. Kronenwetter     Buffalo, NY (1) |              - |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
R. E. Klein            Buffalo, NY (1) |              - |          AC, s |          s |         s |       s |
-------------------------------------------------------------------------------------------------------------
S. Wagner              Buffalo, NY (1) |              s |          AT, s |          s |         s |       s |
-------------------------------------------------------------------------------------------------------------
B. Heine               Buffalo, NY (1) |              - |         AVP, s |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
J. Lesch               Buffalo, NY (18)|              - |         AVP, s |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
D. Wassum              Buffalo, NY (1) |              - |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------
R. C. Kraemer          Buffalo, NY (1) |              - |              - |          - |         - |       - |
-------------------------------------------------------------------------------------------------------------

                                      Position Symbol Key
              ------------------------------------------------------------------------
              COB - Chairman of the Board of Directors   S - Secretary
              CEO - Chief Executive Officer             AS - Assistant Secretary
                P - President                            C - Controller
              EVP - Executive Vice President            AC - Assistant Controller
              SVP - Senior Vice President                D - Director
               VP - Vice President                       s - Salary
              AVP - Assistant Vice President             T - Treasurer
               GC - General Counsel                     AT - Assistant Treasurer
               df - Director's Fees
See page 14 for Notes.

  Data-
  Track      National     Horizon                             Niagara     Seneca
  Account      Fuel       Energy                  Upstate      Indep.     Indep.     Horizon
 Services,  Resources,  Development,  Leidy Hub,   Energy    Marketing   Pipeline     Power
   Inc.        Inc.        Inc.**        Inc.       Inc.        Co.         Co.      Inc.***
----------------------------------------------------------------------------------------------
        s |         s |           s |         D |        - |     D, COB |    D, COB |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
     D, P |         - |     P, D, s |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         s |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |     P, D |       D, P |         - |      - |
----------------------------------------------------------------------------------------------
     S, T |      S, T |           - |         - |     D, S |          S |         - |   S, T |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
----------------------------------------------------------------------------------------------
        - |         - |           - |         - |        - |          - |         - |      - |
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        D |   P, D, s |       VP, s |   D, S, T |        - |          - |         - |      D |
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 * Officers and directors of Seneca Resources' subsidiaries as of September 30,
   2001 were as follows:

National Fuel Exploration Corp.
Board of Directors and Officers:
 B. J. Kennedy (Director and Chairman)                        Buffalo, NY (1)
 J. B. McCashin (President)                                   Calgary, Alberta (19)
 D. Conrad (Secretary)                                        Calgary, Alberta (19)
 W. M. Petmecky (Assistant Secretary)                         Houston, TX (5)
 G. W. Burns (Director)                                       Calgary, Alberta (19)
 D. R. Goruk (Director)                                       Calgary, Alberta (19)

NFEx Acquisition Corp.
Board of Directors and Officers:
 B. J. Kennedy (Director and Chairman)                        Buffalo, NY (1)
 P. C. Ackerman (Director)                                    Buffalo, NY (1)
 J. B. McCashin (Director and President)                      Calgary, Alberta (19)
 D. R. Goruk (Director)                                       Calgary, Alberta (19)
 W. M. Petmecky (Assistant Secretary)                         Houston, TX (5)
 D. Conrad (Secretary)                                        Calgary, Alberta (19)

Player Resources Ltd.
Board of Directors and Officers:
 P. C. Ackerman (Director)                                    Buffalo, NY (1)
 J. A. Beck (Director)                                        Houston, TX (5)
 J. B. McCashin ((President and Director)                     Calgary, Alberta (19)
 D. R. Goruk (Director)                                       Calgary, Alberta (19)
 D. Conrad (Secretary)                                        Calgary, Alberta (19)
 W. Dummer (Controller)                                       Calgary, Alberta (19)

** Officers and directors of Horizon's subsidiaries as of September 30, 2001
   were as follows:

Horizon Energy Holdings, Inc.
Board of Directors and Officers:
 P. C. Ackerman (Director and President)                      Buffalo, NY (1)
 B. H. Hale (Vice President)                                  Buffalo, NY (1)
 G. T. Wehrlin (Vice President)                               Buffalo, NY (1)
 R. J. Tanski (Secretary and Treasurer)                       Buffalo, NY (1)

Horizon Energy Development, B.V.
Managing Directors:
 B. H. Hale                                                   Buffalo, NY (1)
 G. T. Wehrlin                                                Buffalo, NY (1)
 Intra Beheer B.V.                                            Amsterdam, The Netherlands (8)

Horizon Energy Development, s.r.o.
Managing Director:
 B. H. Hale                                                   Buffalo, NY (1)
Statutory Agents:
 L. Jarolimek                                                 Prague, Czech Republic (7)
 A. Novak                                                     Prague, Czech Republic (7)

Power Development, s.r.o. (in liquidation as of January 19, 2001)
Liquidator
 P. Ferenc                                                    Prague, Czech Republic (11)
Statutory Agents:
 L. Jarolimek                                                 Prague, Czech Republic (7)
 A. Novak                                                     Prague, Czech Republic (7)

Teplarna Kromeriz, a.s. (in liquidation as of November 15, 2001)
Board of Directors:
 J. Drabek                                                    (14)
Liquidator:
 JUDr. Krejci                                                 (13)

See page 14 for Notes

Teplarna Liberec, a.s.
Board of Directors:
 J. Drda                                                      Liberec, Czech Republic (21)
 L. Jarolimek                                                 Prague, Czech Republic (7)
 J. Jezek                                                     Liberec, Czech Republic (20)
 Z. Kozesnik                                                  Liberec, Czech Republic (10)
 J. Masinda                                                   Prague, Czech Republic (7)
 L. Zapletal                                                  Most, Czech Republic (14)

Lounske tepelne hospodarstvi, s.r.o.
Statutory Agents:
 R. Jiruska                                                   Bilina, Czech Republic (14)

Teplo Branany, s.r.o.
Managing Directors:
 R. Jiruska                                                   Bilina, Czech Republic (14)
 V. Krupka                                                    Branany, Czech Republic (15)

United Energy, a.s.
Board of Directors:
 L. Jarolimek                                                 Prague, Czech Republic (7)
 L. Zapletal                                                  Most, Czech Republic (14)
 B. H. Hale                                                   Buffalo, NY (1)
 G. T. Wehrlin                                                Buffalo, NY (1)
 P. C. Ackerman                                               Buffalo, NY (1)
 B. J. Kennedy                                                Buffalo, NY (1)
 R. J. Tanski                                                 Buffalo, NY (1)
 J. Sulc                                                      Most, Czech Republic (22)
 E. Volkman                                                   Louny, Czech Republic (23)
 J. Nechvatal                                                 Most, Czech Republic (14)
 J. Masinda                                                   Prague, Czech Republic (7)

ENOP Company, s.r.o.
Statutory Agents:
 R. Kocar                                                     Most, Czech Republic (14)
 K. Stejskal                                                  Most, Czech Republic (14)
 J. Stepanek                                                  Most, Czech Republic (14)

*** Officers of Power's subsidiaries as of September 30, 2001 included the following
    persons (because Power's subsidiaries are not wholly owned directly or
    indirectly by the Registrant or any system company, disclosure is limited to
    those officers who are directly employed by the Registrant or its system
    companies):

Seneca Energy II, LLC
 B. H. Hale (Secretary and Chief Financial Officer)           Buffalo, NY (1)

Model City Energy, LLC
 B. H. Hale (Chief Financial Officer)                         Buffalo, NY (1)

Energy Systems North East, LLC
 B. H. Hale (President)                                       Buffalo, NY (1)
 K. D. Cotter (Vice President)                                Buffalo, NY (1)
 P. L. Malachowski (Treasurer)                                Buffalo, NY (1)
Notes
·	National Fuel Gas Company, 10 Lafayette Square, Buffalo, New York 14203
·	Institute of Gas Technology, 1700 So. Mt. Prospect Road, DesPlaines, IL 60018-1804
·	Duke Energy Corporation, P.O. Box 1642, Houston, TX 77251-1642
·	Moog Inc., Plant 24/Seneca at Jamison Rd., East Aurora, NY 14052-0018
·	Seneca Resources Corporation, 1201 Louisiana Street, Suite 400, Houston, Texas 77002
·	Seneca Resources Corporation, P.O. Box 630, Santa Paula, CA 93061-0630
·	Horizon Energy Development, s.r.o., Maiselova 15, Praha 1 - Josefov, 11000, Czech Republic
·	Intra Beheer B.V., Leidseplein 29, 1017 PS, Amsterdam, The Netherlands
·	Maid of the Mist Corporation, 151 Buffalo Avenue, Niagara Falls, New York 14303
·	Teplarna Liberec, a.s., Dr. Milady Horakove 641/34a, 460 01 Liberec 4, Czech Republic
·	Predicor, Tax advisor, Pristavni 2, 170 00 Prague 7, Czech Republic
·	National Fuel Resources, Inc., 165 Lawrence Bell Drive, Williamsville, NY 14221
·	Law Office Rasovsky, Krejci, Cinglos, Spitalka 23 b, 602 00 Brno, Czech Republic
·	United Energy, a.s., Teplarenska no. 2, Komorany, 434 03 Most 3, Czech Republic
·	Teplo Branany, s.r.o., Bilinska 76 Branany, Czech Republic
·	National Fuel Gas Company, 1100 State Street, Erie, PA 16501
·	Gas Technology Institute, 1700 So. Mt. Prospect Road, Des Plaines, IL 60018-1804
·	National Fuel Gas Distribution Corporation, 365 Mineral Springs Road, Building 3, Buffalo, NY 14210
·	National Fuel Exploration Corp., 1000, 550-6th Avenue, S.W., Calgary, Alberta T2P 0S2
·	City of Liberec, nam. Dr. E. Benese 1, 460 59 Liberec 1, Czech Republic
·	Parliament of the Czech Republic, Snemovni 4, 118 26 Prague 1, Czech Republic
·	President of Usti Region, Velka Hradebni 48, 400 01 Usti nad Labem, Czech Republic
·	City of Louny, Mirove namesti 35, 440 33 Louny, Czech Republic
Item 6. OFFICERS AND DIRECTORS (Continued)
Part II. Financial connections as of September 30, 2001:

                                                 Position Held     Applicable
Name of Officer        Name and Location of      in Financial      Exemption
  or Director          Financial Institution      Institution         Rule
---------------        ---------------------     -------------     -------------

R. T. Brady           Manufacturers and Traders
                       Trust Company,
                       Buffalo, New York           Director          70 (a)
                      M&T Bank Corporation,
                       Buffalo, New York           Director          70 (a)

G. L. Mazanec         Northern Trust Bank
                       of Texas,
                       Dallas, Texas               Director          70 (a)

J. V. Glynn           Manufacturers and Traders
                       Trust Company,
                       Buffalo, New York           Director          70 (a)
                      M&T Bank Corporation,
                       Buffalo, New York           Director          70 (a)
Part III. Compensation and other related information:
·	Compensation of Directors and Executive Officers:
     The information required by this item appears under "Directors' Compensation," and "Executive Compensation," on pages 6 to 7, and pages 10 to 18, respectively, of the National Fuel Gas Company Proxy Statement, dated January 10, 2002, included as Exhibit A (3) to this Form U5S and is incorporated herein by reference.
·	Interest of executive officers and directors in securities of System Companies including options or other rights to acquire securities:
     The information required by this item appears under "Security Ownership of Certain Beneficial Owners and Management," on pages 8 and 9 of the National Fuel Gas Company Proxy Statement, dated January 10, 2002, included as Exhibit A(3) of this Form U5S and is incorporated herein by reference.
·	Contracts and Transactions with System Companies:
     The following contracts and transactions with the directors and executive officers of National Fuel Gas Company were disclosed in the Company's Form 10-K or Form 10-K/A for fiscal year 2001.
·	Retirement and Consulting Agreement, dated September 5, 2001, between the Company and Bernard J. Kennedy (Exhibit 10 (iii)(a), Form 8-K dated September 19, 2001 in File No. 1-3880)

·	Pension Settlement Agreement, dated September 5, 2001, between the Company and Bernard J. Kennedy (Exhibit 10(iii)(b), Form 8-K dated September 19, 2001 in File No. 1-3880)

·	Employment Agreement, dated September 17, 1981, with Bernard J. Kennedy (Exhibit 10.4, Form 10-K for fiscal year ended September 30, 1994 in File No. 1-3880)

·	Tenth Amendment to Employment Agreement with Bernard J. Kennedy, effective September 1, 1999 (Exhibit 10.1, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

Item 6. OFFICERS AND DIRECTORS (Continued)
·	Agreement dated August 1, 1986, with Joseph P. Pawlowski (Exhibit 10.1, Form 10-K for fiscal year ended September 30,1997 in File No. 1-3880)

·	Agreement dated August 1, 1986, with Gerald T. Wehrlin (Exhibit 10.2, Form 10-K for fiscal year ended September 30, 1997, in File No. 1-3880)

·	Form of Employment Continuation and Noncompetition Agreements, dated as of December 11, 1998, with Philip C. Ackerman, Walter E. DeForest, Joseph P. Pawlowski, Dennis J. Seeley, David F. Smith and Gerald T. Wehrlin (Exhibit 10.1, Form 10-Q for the quarterly period ended June 30, 1999 in File No. 1-3880)

·	Severance Agreement, Release and Waiver dated March 27, 2000, between National Fuel Gas Supply Corporation and Richard Hare (Exhibit 10.2, Form 10-Q for the quarterly period ended March 31, 2000 in File No. 1-3880)

·	Form of Employment Continuation and Noncompetition Agreement, dated as of December 11, 1998, with James A. Beck (Exhibit 10.3, Form 10-Q for the quarterly period ended June 30, 1999 in File No. 1-3880)

·	National Fuel Gas Company 1983 Incentive Stock Option Plan, as amended and restated through February 18, 1993 (Exhibit 10.2, Form 10-Q for the quarterly period ended March 31, 1993 in File No. 1-3880)

·	National Fuel Gas Company 1984 Stock Plan, as amended and restated through February 18, 1993 (Exhibit 10.3, Form 10-Q for the quarterly period ended March 31, 1993 in File No. 1-3880)

·	Amendment to the National Fuel Gas Company 1984 Stock Plan, dated December 11, 1996 (Exhibit 10.7, Form 10-K for fiscal year ended September 30, 1996 in File No. 1-3880)

·	National Fuel Gas Company 1993 Award and Option Plan, dated February 18, 1993 (Exhibit 10.1, Form 10-Q for the quarterly period ended March 31, 1993 in File No. 1-3880)

·	Amendment to National Fuel Gas Company 1993 Award and Option Plan, dated October 27, 1995 (Exhibit 10.8, Form 10-K for fiscal year ended September 30, 1995 in File No. 1-3880)

·	Amendment to National Fuel Gas Company 1993 Award and Option Plan, dated December 11, 1996 (Exhibit 10.8, Form 10-K for fiscal year ended September 30, 1996 in File No. 1-3880)

·	Amendment to National Fuel Gas Company 1993 Award and Option Plan, dated December 18, 1996 (Exhibit 10, Form 10-Q for the quarterly period ended December 31, 1996 in File No. 1-3880)

·	National Fuel Gas Company 1993 Award and Option Plan, amended through June 14, 2001 (Exhibit 10.1, Form 10-K for fiscal year ended September 30, 2001 in File No. 1-3880)

·	National Fuel Gas Company 1997 Award and Option Plan, amended through June 14, 2001 (Exhibit 10.2, Form 10-K for fiscal year ended September 30, 2001 in File No. 1-3880)

·	National Fuel Gas Company Deferred Compensation Plan, as amended and restated through May 1, 1994 (Exhibit 10.7, Form 10-K for fiscal year ended September 30, 1994 in File No. 1-3880)

Item 6. OFFICERS AND DIRECTORS (Continued)
·	Amendment to the National Fuel Gas Company Deferred Compensation Plan, dated September 19, 1996 (Exhibit 10.10, Form 10-K for fiscal year ended September 30, 1996 in File No. 1-3880)

·	Amendment to the National Fuel Gas Company Deferred Compensation Plan, dated September 27, 1995 (Exhibit 10.9, Form 10-K for fiscal year ended September 30, 1995 in File No. 1-3880)

·	National Fuel Gas Company Deferred Compensation Plan, as amended and restated through March 20, 1997 (Exhibit 10.3, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

·	Amendment to National Fuel Gas Company Deferred Compensation Plan dated June 16, 1997 (Exhibit 10.4, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

·	Amendment No. 2 to the National Fuel Gas Company Deferred Compensation Plan, dated March 13, 1998 (Exhibit 10.1, Form 10-K for fiscal year ended September 30, 1998 in File No. 1-3880)

·	Amendment to the National Fuel Gas Company Deferred Compensation Plan, dated February 18, 1999 (Exhibit 10.1, Form 10-Q for the quarterly period ended March 31, 1999 in File No. 1-3880)

·	Amendment to National Fuel Gas Company Deferred Compensation Plan, dated June 15, 2001 (Exhibit 10.3, Form 10-K for fiscal year ended September 30, 2001 in File No. 1-3880)

·	National Fuel Gas Company Tophat Plan, effective March 20, 1997 (Exhibit 10, Form 10-Q for the quarterly period ended June 30, 1997 in File No. 1-3880)

·	Amendment No. 1 to the National Fuel Gas Company Tophat Plan, dated April 6, 1998 (Exhibit 10.2, Form 10-K for fiscal year ended September 30, 1998 in File No. 1-3880)

·	Amendment No. 2 to the National Fuel Gas Company Tophat Plan, dated December 10, 1998 (Exhibit 10.1, Form 10-Q for the quarterly period ended December 31, 1998 in File No. 1-3880)

·	Death Benefits Agreement, dated August 28, 1991, with Bernard J. Kennedy (Exhibit 10-TT, Form 10-K for fiscal year ended September 30, 1991 in File No. 1-3880)

·	Amendment to Death Benefit Agreement of August 28, 1991, with Bernard J. Kennedy, dated March 15, 1994 (Exhibit 10.11, Form 10-K for fiscal year ended September 30, 1995 in File No. 1-3880)

·	Amended and Restated Split Dollar Insurance Agreement, effective June 15, 2000 among National Fuel Gas Company, Bernard J. Kennedy, and Joseph B. Kennedy, as Trustee of the Trust under the Agreement dated January 9, 1998 (Exhibit 10.1, Form 10-Q for the quarterly period ended June 30, 2000 in File No. 1-3880)

·	Contingent Benefit Agreement effective June 15, 2000 between National Fuel Gas Company and Bernard J. Kennedy (Exhibit 10.2, Form 10-Q for the quarterly period ended June 30, 2000 in File No. 1-3880)

·	Amended and Restated Split Dollar Insurance and Death Benefit Agreement dated September 17, 1997 with Philip C. Ackerman (Exhibit 10.5, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

Item 6. OFFICERS AND DIRECTORS (Continued)
·	Amendment Number 1 to Amended and Restated Split Dollar Insurance and Death Benefit Agreement by and Between National Fuel Gas Company and Philip C. Ackerman, dated March 23, 1999 (Exhibit 10.3, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amended and Restated Split Dollar Insurance and Death Benefit Agreement dated September 15, 1997 with Joseph P. Pawlowski (Exhibit 10.7, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

·	Amendment Number 1 to Amended and Restated Split Dollar Insurance and Death Benefit Agreement by and Between National Fuel Gas Company and Joseph P. Pawlowski, dated March 23, 1999 (Exhibit 10.5, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Second Amended and Restated Split Dollar Insurance Agreement dated June 15, 1999 with Gerald T. Wehrlin (Exhibit 10.6, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amended and Restated Split Dollar Insurance and Death Benefit Agreement dated September 15, 1997 with Walter E. DeForest (Exhibit 10.7, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amendment Number 1 to Amended and Restated Split Dollar Insurance and Death Benefit Agreement by and Between National Fuel Gas Company and Walter E. DeForest, dated March 29, 1999 (Exhibit 10.8, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amended and Restated Split Dollar Insurance and Death Benefit Agreement dated September 15, 1997 with Dennis J. Seeley (Exhibit 10.9, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amendment Number 1 to Amended and Restated Split Dollar Insurance and Death Benefit Agreement by and Between National Fuel Gas Company and Dennis J. Seeley, dated March 29, 1999 (Exhibit 10.10, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Split Dollar Insurance and Death Benefit Agreement dated September 15, 1997 with Bruce H. Hale (Exhibit 10.11, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amendment Number 1 to Split Dollar Insurance and Death Benefit Agreement by and Between National Fuel Gas Company and Bruce H. Hale, dated March 29, 1999 (Exhibit 10.12, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Split Dollar Insurance and Death Benefit Agreement dated September 15, 1997 with David F. Smith (Exhibit 10.13, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amendment Number 1 to Split Dollar Insurance and Death Benefit Agreement by and Between National Fuel Gas Company and David F. Smith, dated March 29, 1999 (Exhibit 10.14, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	National Fuel Gas Company and Participating Subsidiaries Executive Retirement Plan as amended and restated through November 1, 1995 (Exhibit 10.10, Form 10-K for fiscal year ended September 30, 1995 in File No. 1-3880)

Item 6. OFFICERS AND DIRECTORS (Continued)
·	National Fuel Gas Company and Participating Subsidiaries 1996 Executive Retirement Plan Trust Agreement (II) dated May 10, 1996 (Exhibit 10.13, Form 10-K for fiscal year ended September 30, 1996 in File No. 1-3880)

·	Amendments to National Fuel Gas Company and Participating Subsidiaries Executive Retirement Plan dated September 18, 1997 (Exhibit 10.9, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

·	Amendments to the National Fuel Gas Company and Participating Subsidiaries Executive Retirement Plan dated December 10, 1998 (Exhibit 10.2, Form 10-Q for the quarterly period ended December 31, 1998 in File No. 1-3880)

·	Amendments to National Fuel Gas Company and Participating Subsidiaries Executive Retirement Plan effective September 16, 1999 (Exhibit 10.15, Form 10-K for fiscal year ended September 30, 1999 in File No. 1-3880)

·	Amendment to National Fuel Gas Company and Participating Subsidiaries Executive Retirement Plan, effective September 5, 2001 (Exhibit 10.4, Form 10-K/A for fiscal year ended September 30, 2001 in File No. 1-3880)

·	Retirement Supplement Agreement, dated September 14, 2000, between the Company and Gerald T. Wehrlin (Exhibit 10.5, Form 10-K/A for fiscal year ended September 30, 2001 in File No. 1-3880)
·	Retirement Supplement Agreement, dated January 11, 2002, between the Company and Joseph P. Pawlowski (Exhibit 10.6, Form 10-K/A for fiscal year ended September 30, 2001 in File No. 1-3880)
·	Administrative Rules with Respect to at Risk Awards under the 1993 Award and Option Plan (Exhibit 10.14, Form 10-K for fiscal year ended September 30, 1996 in File No. 1-3880)

·	Administrative Rules with Respect to at Risk Awards under the 1997 Award and Option Plan (Exhibit A, Definitive Proxy Statement, Schedule 14(A) filed January 14, 2000 in File No. 1-3880)

·	Administrative Rules of the Compensation Committee of the Board of Directors of National Fuel Gas Company, as amended and restated, effective December 10, 1998 (Exhibit 10.3, Form 10-Q for the quarterly period ended December 31, 1998 in File No. 1-3880)

·	Excerpts of Minutes from the National Fuel Gas Company Board of Directors Meeting of February 20, 1997 regarding the Retirement Benefits for Bernard J. Kennedy (Exhibit 10.10, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

·	Excerpts of Minutes from the National Fuel Gas Company Board of Directors Meeting of March 20, 1997 regarding the Retainer Policy for Non-Employee Directors (Exhibit 10.11, Form 10-K for fiscal year ended September 30, 1997 in File No. 1-3880)

·	Indebtedness to System Companies: None

·	Participation in Bonus and Profit-Sharing Arrangements and Other Benefits:

The information required by this item appears under “Directors’ Compensation,” and “Executive Compensation,” on pages 6 to 7 and pages 10 to 18, respectively, of the National Fuel Gas Company Proxy Statement, dated January 10, 2002, included as Exhibit A(3) to this Form U5S and incorporated herein by reference.
Item 6. OFFICERS AND DIRECTORS (Concluded)
·	Rights to Indemnity:
The information required by this item appears in Article II, Paragraph 8 of the National Fuel Gas Company By-Laws as amended through December 13, 2001. Such By-Laws are listed as Exhibit B(1)(ii) to this Form U5S and are incorporated herein by reference as indicated.
The Company also purchases directors and officers liability insurance coverage with an annual aggregate limit of $135 million, and, in recognition of the scope of the foregoing by-law indemnification, certain other errors and omissions and general liability insurance coverages which are applicable to all employees as insureds, including directors and officers.
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS

                                                                                               Amount
                            Name of Recipient               Accounts Charged Per Books   Fiscal Year Ended
    Name of Company          or Beneficiary       Purpose     of Disbursing Company      September 30, 2001
    ---------------         -----------------     -------   --------------------------   ------------------

Tabulation showing expenditures, disbursements, or payments during the year, in money, goods or services,
directly or indirectly to or for the account of:

(1) Any political party, candidate for public office or holder of such office, or
any committee or agent therefor:

Distribution Corporation           N/A            *FEDPAC    Misc. Income Deductions        $  3,838

Distribution Corporation           N/A            *NYPAC     Misc. Income Deductions        $  3,479

Distribution Corporation           N/A            *PAPAC     Misc. Income Deductions        $  2,086

Supply Corporation                 N/A            *FEDPAC    Misc. Income Deductions        $  1,512

Supply Corporation                 N/A            *NYPAC     Misc. Income Deductions        $  1,472

Supply Corporation                 N/A            *PAPAC     Misc. Income Deductions        $  1,156

* Company labor and expenses relating to administration of political action funds.

(2) Any citizens group or public relations counsel:

Distribution Corporation    24 Beneficiaries       Civic     Operation Expense              $  5,988

Supply Corporation          14 Beneficiaries       Civic     Operation Expense              $  3,531

Seneca Resources             1 Beneficiary         Civic     Operation Expense              $    400
The information called for by instruction 2 to Item 7 was compiled, and memoranda from the applicable System Companies were received and are preserved by the Registrant.
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Intercompany sales and services
·	Salaries of officers of the Registrant

                                                           NATIONAL FUEL GAS COMPANY
                                                           -------------------------
                                                          REPORT OF OFFICERS' SALARIES
                                                          ----------------------------
                                                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                  --------------------------------------------
                          Distribution   Supply    Seneca     Leidy                       Data-
                  Parent     Corp.       Corp.    Resources    Hub    Highland  Horizon   Track   NFR     Total
                  ------  ------------   ------   ---------   -----   --------  -------   -----   ---     -----

B. J. Kennedy    $72,093  $296,854      $449,520   $10,602    $   -   $2,120    $ 8,481  $4,240  $4,240  $848,150

P. C. Ackerman    53,550   220,500       220,500    91,350        -    6,300     37,800       -       -   630,000

A. M. Cellino      9,000   114,383        56,617         -        -        -          -       -       -   180,000

J. P. Pawlowski   13,000   153,995        75,010    16,103        -    1,700          -       -     192   260,000

G. T. Wehrlin     18,337    20,548         9,916     2,128    4,477      219    180,600       -  21,775   258,000
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
·	Services rendered by Statutory Subsidiaries

                            DISTRIBUTION CORPORATION
                            ------------------------
                    REPORT OF INTERCOMPANY SALES AND SERVICES
                    -----------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                                            Common Expenses
                            --------------------------------------------------------------------------------------

                                                      Corporate     Materials                Accounts
Receiving Company           Executive   Purchasing  Communications  Management  Accounting   Payable
-----------------           ---------   ----------  --------------  ----------  ----------   -------
Supply Corporation           $  533       $225           $153          $ 8       $  871       $255
Seneca Resources                515          -              8            -          189          -
UCI                               -          -              -            -            -          -
Highland                         64          -              1            -           21          -
Data-Track                        -          -              -            -            -          -
NFR                               7          -              -            -            2          -
Leidy Hub                         -          -              -            -            -          -
Horizon                           -          -              -            -            -          -
Parent Company                    -          -              -            -            -          -
NIM                               -          -              -            -            -          -
Upstate Energy                    -          -              -            -            -          -
                             ------       ----           ----          ---       ------       ----
                             $1,119       $225           $162          $ 8       $1,083       $255
                             ======       ====           ====          ===       ======       ====

                                                            Common Expenses
                            --------------------------------------------------------------------------------------
                              Data           Human                             Government      Benefit
Receiving Company           Processing     Resources     Legal     Finance       Affair        Services     CPR
-----------------           ----------     ---------     -----     -------     ----------      --------     ---
Supply Corporation             $232          $358        $ 74       $635          $48            $199      $131
Seneca Resources                  -            46          71        118            -             179         -
UCI                               -             -           -          -            -               -         -
Highland                          -             5           9         13            -              22         -
Data-Track                        -             -           -          -            -               -         -
NFR                               -             1           1          1            -               3         -
Leidy Hub                         -             -           -          -            -               -         -
Horizon                           -             -           -          -            -               -         -
Parent Company                    -             -           -          -            -               -         -
NIM                               -             -           -          -            -               -         -
Upstate Energy                    -             -           -          -            -               -         -
                               ----          ----        ----       ----          ---            ----      ----
                               $232          $410        $155       $767          $48            $403      $131
                               ====          ====        ====       ====          ===            ====      ====

                               Common Expenses
                            ----------------------
                                        Total           Total      Total    Convenience or      Total Service
                                        Common         Clearing    Direct    Accommodation       Rendered By
Receiving Company           Payroll     Expense        Charges*   Charges*    Payments*     Statutory Subsidiaries
-----------------           -------     -------        --------   --------  --------------  ----------------------
Supply Corporation           $130       $3,852          $4,461     $4,449      $ 8,333             $21,095
Seneca Resources                -        1,126             152        366        2,329               3,973
UCI                             -            -               -          -            4                   4
Highland                        -          135              17         43          196                 391
Data-Track                      -            -               -          -           24                  24
NFR                             -           15              49        214          218                 496
Leidy Hub                       -            -               -         11            -                  11
Horizon                         -            -               2        945           26                 973
Parent Company                  -            -               5        231          798               1,034
NIM                             -            -               -          -            4                   4
Upstate Energy                  -            -               -          -            2                   2
                             ----       ------          ------     ------      -------             -------
                             $130       $5,128          $4,686     $6,259      $11,934             $28,007
                             ====       ======          ======     ======      =======             =======
* Analysis of Clearing Charges, Direct Charges & Convenience or Accommodation Payments is presented on pages 24 and 25.
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
·	Services rendered by Statutory Subsidiaries (Continued)

                            DISTRIBUTION CORPORATION
                            ------------------------
                    REPORT OF INTERCOMPANY SALES AND SERVICES
                    -----------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                                            Clearing Charges
                            -----------------------------------------------------------------------------------------
                            Material                                                           Total
                            Issue &                                       Data    Messenger   Clearing
Receiving Company           Transfer Telecommunications Rental Postage Processing  Expense     Charges
-----------------           -------- ------------------ ------ ------- ---------- ---------   ---------
Supply Corporation           $1,826         $203          $42   $ 6      $2,270     $114       $4,461
Seneca Resources                  3           63            -     -          84        2          152
UCI                               -            -            -     -           -        -            -
Highland                          -            -            -     -           9        8           17
Data-Track                        -            -            -     -           -        -            -
NFR                               -           38            -     -           1       10           49
Leidy Hub                         -            -            -     -           -        -            -
Horizon                           -            -            2     -           -        -            2
Parent Company                    1            -            -     1           3        -            5
NIM                               -            -            -     -           -        -            -
Upstate Energy                    -            -            -     -           -        -            -
                             ------         ----          ---   ---      ------     ----       ------
                             $1,830         $304          $44   $ 7      $2,367     $134       $4,686
                             ======         ====          ===   ===      ======     ====       ======

                                                            Direct Charges
                            -----------------------------------------------------------------------------------------
                                         Telecom-                             Contract
Receiving Company           Land  MMD   munications  Insurance  Operations  Administration     Accounting
-----------------           ----- ---   -----------  ---------  ----------  --------------     ----------
Supply Corporation          $308  $122     $37         $466       $1,946         $38              $ -
Seneca Resources              32     -       -            -           13           -                -
UCI                            -     -       -            -            -           -                -
Highland                       -     -       -            -            -           -                -
Data-Track                     -     -       -            -            -           -                -
NFR                            -     -       -            -            -           -                1
Leidy Hub                      -     -       -            -            -           -                -
Horizon                        -     -       -            -            -           -               69
Parent Company                 -     -       -            -            -           -               18
NIM                            -     -       -            -            -           -                -
Upstate Energy                 -     -       -            -            -           -                -
                            ----  ----     ---         ----       ------         ---              ---
                            $340  $122     $37         $466       $1,959         $38              $88
                            ====  ====     ===         ====       ======         ===              ===

                                                            Direct Charges
                            -----------------------------------------------------------------------------------------
                                    Interstate  Government                          Rates &       Human
Receiving Company           Legal   Marketing    Affairs     Finance   Executive   Regulation   Resources
-----------------           -----   ----------  ----------   -------   ---------   ----------   ---------
Supply Corporation           $54       $ -         $240       $151       $  920       $-          $ 31
Seneca Resources              16         -            7         42          253        1             -
UCI                            -         -            -          -            -        -             -
Highland                      11         -            -         10           22        -             -
Data-Track                     -         -            -          -            -        -             -
NFR                            8         -            -         49          156        -             -
Leidy Hub                      -         -            -          -           11        -             -
Horizon                        -        34            -        224          618        -             -
Parent Company                 -         -            -         29          179        -             -
NIM                            -         -            -          -            -        -             -
Upstate Energy                 -         -            -          -            -        -             -
                             ---       ---         ----       ----       ------       --          ----
                             $89       $34         $247       $505       $2,159       $1          $ 31
                             ===       ===         ====       ====       ======       ==          ====

                                                            Direct Charges
                            -----------------------------------------------------------------------------------------
                                                                                                         Total
                            Benefit                 Quality                                              Direct
Receiving Company           Services  Engineering  Assurance                                             Charges
-----------------           --------  -----------  ---------                                             -------
Supply Corporation            $20         $72         $44                                                $4,449
Seneca Resources                2           -           -                                                   366
UCI                             -           -           -                                                     -
Highland                        -           -           -                                                    43
Data-Track                      -           -           -                                                     -
NFR                             -           -           -                                                   214
Leidy Hub                       -           -           -                                                    11
Horizon                         -           -           -                                                   945
Parent Company                  3           2           -                                                   231
NIM                             -           -           -                                                     -
Upstate Energy                  -           -           -                                                     -
                              ---         ---         ---                                                ------
                              $25         $74         $44                                                $6,259
                              ===         ===         ===                                                ======
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
·	Services rendered by Statutory Subsidiaries (Continued)

                            DISTRIBUTION CORPORATION
                            ------------------------
                ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
                -------------------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                                Receiving Company
                     ------------------------------------------------------------------
                     Parent    Supply     Seneca      Data-              Leidy
                     Company Corporation Resources UCI Track Highland NFR  Hub  Horizon
                     ------- ----------- --------- --- ----- -------- --- ----- -------

Material              $   -     $   371   $    5   $  - $ -    $  2   $  - $ -   $ -
Rents                     -          79        -      -   -       -      -   -     -
Transportation            -          11        1      -   -       -      -   -     -
Utilities                 -         909       84      -  23       -     22   -     -
Contractors &
 Outside Services       546       1,201       37      1  (1)      2     (2) (1)   (8)
Equipment Purchases
 & Rentals                1         652        -      -   -       -      2   -     -
Employee Benefits         8       2,784        5      -   -       5     93   -     -
Office Expense           20         727       37      -   1      15     18   1    32
Dues & Subscriptions    150         223        -      -   -       -      -   -     -
Other Insurance           -       1,084    2,152      -   -      83     25   -     -
Injuries & Damages        3         221        -      1   -      87      -   -     -
Other                    57          47        8      2   1       2     60   -     2
Advertising               -          10        -      -   -       -      -   -     -
Postage                  13           5        -      -   -       -      -   -     -
Environmental             -           3        -      -   -       -      -   -     -
Land Acquisitions         -           6        -      -   -       -      -   -     -
                      -----      ------   ------   ---- ---    ----   ---- ---   ---

                      $ 798     $ 8,333   $2,329   $  4 $24    $196   $218 $ -   $26
                      =====     =======   ======   ==== ===    ====   ==== ===   ===

                              Receiving Company
                           --------------------------
                                   Upstate
                           NIM     Energy      Total
                           ---     -------     -----

Material                   $ 2      $ 1       $   381
Rents                        -        -            79
Transportation               -        -            12
Utilities                    -        -         1,038
Contractors &
 Outside Services           (2)      (1)        1,772
Equipment Purchases
 & Rentals                   -        -           655
Employee Benefits            -        -         2,895
Office Expense               4        1           856
Dues & Subscriptions         -        -           373
Other Insurance              -        1         3,345
Injuries & Damages           -        -           312
Other                        -        -           179
Advertising                  -        -            10
Postage                      -        -            18
Environmental                -        -             3
Land Acquisition             -        -             6
                           ---      ---       -------

                           $ 4      $ 2       $11,934
                           ===      ===       =======
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
·	Services rendered by Statutory Subsidiaries (Continued)
                               SUPPLY CORPORATION
                               ------------------
                    REPORT OF INTERCOMPANY SALES AND SERVICES
                    -----------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                 Clearing Accounts                       Direct Charges
                   ----------------------------------------------  -------------------------
                                         Material         Total
                     DPC     Production  Issue &  Rental Clearing       Interstate
Receiving Company  Clearing   Clearing   Transfer Clear  Charges    MMD  Marketing   Finance
-----------------  --------  ----------- -------- ------ --------   ---  ----------  -------

Distribution Corp.   $ 9        $  -      $  448  $2,774  $3,231    $55    $35       $  -
Seneca Resources       -         180           7       -     187      -      -          -
Horizon                -           -           -      26      26      -      3        133
Highland               -           -           -       -       -      -      -          -
Data Track             -           -           -       -       -      -      -          -
NFR                    -           -           -       -       -      -      -          -
Leidy Hub              -           -           -       -       -      -      -          -
Parent Company         -           -           -      10      10      -      -         79
Upstate Energy         -           -           -       -       -      -      -          -
NIM                    -           -           -       -       -      -      -          -
                     ---        ----      ------  ------  ------    ---    ---       ----

                     $ 9        $180      $  455  $2,810  $3,454    $55    $38       $212
                     ===        ====      ======  ======  ======    ===    ===       ====

                                                  Direct Charges Continued
                   ---------------------------------------------------------------------------------
                                                                                Operations,
                                                                               Construction &
                    Benefit                 Human            Gas                  Customer
Receiving Company  Services  Engineering  Resources  Land  Control  Executive     Service      Legal
-----------------  --------  -----------  ---------  ----  -------  ---------- --------------  -----

Distribution Corp.   $  -        $ 39       $ 67     $185   $1,134    $1,098       $1,523       $18
Seneca Resources        -           -          -       22        -        39           82         -
Horizon                 -           -          -        -        -       516            -        53
Highland                -           -         11        -        -        11            -         -
Data Track              -           -          -        -        -        17            -         -
NFR                     -           -          7        -        -        17            -         -
Leidy Hub               -           -          -        -        -         -            -         -
Parent Company          2           -          -        -        -       256            -         -
Upstate Energy          -           -          -        -        -         -            -         -
NIM                     -           -          -        -        -         2            -         -
                     ----         ---       ----     ----   ------    ------       ------       ---

                     $  2        $ 39       $ 85     $207   $1,134    $1,956       $1,605       $71
                     ====        ====       ====     ====   ======    ======       ======       ===

                                                             Total Services
                     Total     Total     Convenience or       Rendered By
                    Direct    Clearing   Accommodation         Statutory
Receiving Company   Charges   Charges      Payments*          Subsidiaries
-----------------   -------   --------   --------------      -------------------

Distribution Corp.  $4,154     $3,231        $1,458              $ 8,843
Seneca Resources       143        187            13                  343
Horizon                705         26             5                  736
Highland                22          -            (2)                  20
Data Track              17          -             1                   18
NFR                     24          -             1                   25
Leidy Hub                -          -             -                    -
Parent Company         337         10            13                  360
Upstate Energy           -          -             -                    -
NIM                      2          -             -                    2
                    ------     ------        ------              -------

                    $5,404     $3,454        $1,489              $10,347
                    ======     ======        ======              =======
* Analysis of Convenience or Accommodation Payments is presented on page 27.
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
·	Services rendered by Statutory Subsidiaries (Continued)

                               SUPPLY CORPORATION
                               ------------------
                ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
                -------------------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                          Receiving Company
                      ----------------------------------------------------------
                       Parent   Distribution   Seneca    Horizon
                       Company  Corporation   Resources  Energy   Highland
                       -------  ------------  ---------  -------  --------

Material                 $ -       $  127       $ 1        $-       $ -
Rents                      -            -         -         -         -
Transportation             -            7         -         -         -
Utilities                  -          298         -         -         -
Contractors &
 Outside Services          -          721         4         2         -
Equipment Purchases
 & Rentals                 -            6         -         -         -
Employee Benefits         13           67         2         1         -
Office Expense             -           67         -         1         -
Dues & Memberships         -           35         -         -         -
Other                      -           80         6         1        (2)
Other Insurance            -           44         -         -         -
Postage                    -            -         -         -         -
Advertising                -            -         -         -         -
Environmental              -            -         -         -         -
Injuries & Damages         -            6         -         -         -
                         ---       ------       ---        --       ---

                         $13       $1,458       $13        $5       $(2)
                         ===       ======       ===        ==       ===

                              Receiving Company
                      --------------------------------------
                      Data-                  Upstate
                      Track  NFR  Leidy Hub  Energy   NIM     Total
                      -----  ---  ---------  -------  ---     -----

Material               $-    $ -     $-        $-     $ -     $  128
Rents                   -      -      -         -       -          -
Transportation          -      -      -         -       -          7
Utilities               -      -      -         -       -        298
Contractors &
 Outside Services       -      -      -         -       -        727
Equipment Purchases
 & Rentals              -      -      -         -       -          6
Employee Benefits       1      1      -         -       -         85
Office Expense          -      -      -         -       -         68
Dues & Memberships      -      -      -         -       -         35
Other                   -      -      -         -       -         85
Other Insurance         -      -      -         -       -         44
Postage                 -      -      -         -       -          -
Advertising             -      -      -         -       -          -
Environmental           -      -      -         -       -          -
Injuries & Damages      -      -      -         -       -          6
                       --    ---     --        --     ---     ------

                       $1    $ 1     $-        $-     $ -     $1,489
                       ==    ===     ==        ==     ===     ======
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
·	Services rendered by Statutory Subsidiaries (Continued)

                                SENECA RESOURCES
                                ----------------
                    REPORT OF INTERCOMPANY SALES AND SERVICES
                    -----------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                                                            Total
                                                                           Services
                                                         Convenience or  Rendered By
                                   Timber                Accommodation    Statutory
Receiving Company                  Sales     Operations     Payments     Subsidiaries
-----------------                  ------    ----------  --------------  ------------

Supply Corporation                $     -      $  670         $ 22         $   692
Highland                           11,448           -            1          11,449
NFR                                     -           -           10              10
Upstate Energy                          -           -            -               -
Parent Company                          -           -            -               -
NFE                                     -           -          188             188
Horizon                                 -           -            7               7
                                  -------      ------         ----         -------

                                  $11,448      $  670         $228         $12,346
                                  =======      ======         ====         =======

                ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
                -------------------------------------------------

                                    Receiving Company
           ------------------------------------------------------------------------------------
                                Supply
           Highland  Horizon  Corporation   NFR     NFE     Total
           --------  -------  ------------  ---   --------  -----

Other        $1        $7         $22       $10     $188    $228
             --        --         ---       ---     ----    ----

             $1        $7         $22       $10     $188    $228
             ==        ==         ===       ===     ====    ====
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Concluded)
·	Services rendered by Statutory Subsidiaries (Concluded)

                                    HIGHLAND
                                    --------
                    REPORT OF INTERCOMPANY SALES AND SERVICES
                    -----------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                                 Total Services
                                                  Rendered By
                               Convenience         Statutory
Receiving Company               Payments          Subsidiaries
-----------------              -----------       -----------------

Seneca Resources                  $320                $320

Supply Corporation                   -                   -
                                  ----                ----

                                  $320                $320
                                  ====                ====

                                   DATA-TRACK
                                   ----------
                    REPORT OF INTERCOMPANY SALES AND SERVICES
                    -----------------------------------------
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                  --------------------------------------------
                             (THOUSANDS OF DOLLARS)
                             ----------------------

                                                        Total Services
                                                         Rendered by
                                         Collection       Statutory
Receiving Company                         Services       Subsidiaries
-----------------                        ----------     --------------

Distribution Corporation                    $435             $435

NFR                                            9                9
                                            ----             ----

                                            $444             $444
                                            ====             ====
·	Services rendered by Registrant

No services were rendered for a charge by the Registrant to any of its subsidiaries during the fiscal year ended September 30, 2001.

ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Concluded)

Part II.	Contracts to purchase services or goods between any System company and any affiliate (other than a System company) at September 30, 2001:

None	

Part III.	Employment of any person by any System company for the performance on a continuing basis of management services:	

                                Description of Contract and         Annual
                Name                 Scope of Services           Consideration
           ---------------      ---------------------------      -------------

           Robert Davis         Performs management and            $100,000
                                consulting services for
                                Highland.

           Joseph Maljovec      Performs management and            $ 68,952
                                consulting services for
                                Highland.

           Enterprise Risk      Performs consulting services      Retainer of
           Management, Inc.     for the Registrant regarding       $ 86,000
                                placement of insurance
                                coverages and participates
                                in management or facilitation
                                of claims.

           Robert C. Williams   Performs real estate consulting    $  4,600
                                services for Seneca Resources.
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES

Part I.  A.       Interests in Foreign Utility Companies

                  1.       United Energy, a.s. and Teplarna Liberec, a.s.

                  (a)      United Energy, a.s. (UE)
                           Komorany u Mostu
                           434 03 Most
                           Czech Republic

                           Teplarna Liberec, a.s. (TL)
                           Dr. M. Horakove 641/34a
                           460 01 Liberec
                           Czech Republic

                           UE generates and supplies steam heat to customers in
                           the Czech Republic. UE also generates electric energy
                           for sale. UE has been designated as a foreign utility
                           company because it owns and operates a coal-fired
                           electric generation plant with generating capacity of
                           236 MW and sells the electricity it produces at
                           wholesale. UE has also been designated as a foreign
                           utility company because it owns a 70% interest (common
                           equity) in TL. TL, in turn, has been designated as a
                           foreign utility company because it owns and operates
                           a 12 MW steam powered electric generation turbine and
                           sells the produced electricity at wholesale.

                           Horizon Energy Development, Inc. (Horizon) owns 100%
                           of the capital stock of Horizon Energy Holdings, Inc.
                           (HEHI), which owns 100% of the capital stock of Horizon
                           Energy Development B.V. (HEDBV).  HEDBV owns 85.16%
                           of the capital stock of UE, which owns 70% of the
                           capital stock of TL.

ITEM 9.  WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Continued)
-------  --------------------------------------------------------------

                  (b)      Horizon owns 100% of the capital stock of HEHI, which
                           investment was valued at $112,492,000 as of September 30,
                           2001. HEHI owns 100% of the capital stock of
                           HEDBV, which investment was valued at $112,492,000 as
                           of September 30, 2001.  HEDBV owns 85.16% of the
                           capital stock of UE, and such investment was valued at
                           $112,819,000 as of September 30, 2001. UE owns 70%
                           of the capital stock of TL, and such investment was
                           valued at $8,187,000 as of September 30, 2001. The
                           financial statements of Horizon and its subsidiaries
                           are found on pages 62 through 86 of this Form U5S.

                           There are no debts or other financial obligations of
                           HEHI, HEDBV, UE or TL for which there is recourse,
                           directly or indirectly, to the registered holding
                           company or another system company. There are no direct
                           or indirect guaranties of any of the securities of UE
                           or TL by the registered holding company. There have
                           been no transfers of any assets from any system
                           company to UE or TL.

                  (c)      The ratio of debt to comprehensive shareholders’
                           equity of UE was 40.40% as of September 30, 2001. TL
                           had no debt outstanding at September 30, 2001. The
                           earnings (loss) of UE and TL for the twelve months
                           ended September 30, 2001 (net of minority interest)
                           were $4,603,000 and $(54,000), respectively. The
                           financial statements of UE and TL are found on pages
                           82 through 86 of this Form U5S.

                  (d)      There are management support agreements between Horizon
                           Energy Development,  s.r.o. (HED) and UE and TL. Under
                           these agreements, HED agrees to provide management
                           services (i.e., strategic, legal, marketing, public
                           relations and human resource services) to both UE and
                           TL. The agreement with UE calls for UE to pay HED CZK
                           1,975,000 on a monthly basis. The agreement with TL
                           calls for a monthly payment of CZK 500,000 to HED,
                           effective as of December 1, 2000.

                           There is a service agreement between UE and TL calling
                           for TL to pay UE CZK 1,630,000 on a monthly basis.
                           The services UE provides include services similar to those
                           described above, plus engineering, technical, accounting
                           and bank transactional services.

                  2.       Teplarna Kromeriz, a.s.

                  (a)      Teplarna Kromeriz, a.s. (Kromeriz)
                           Na Sadkach 3572
                           767 01 Kromeriz
                           Czech Republic

                           Kromeriz generated and supplied steam heat to customers
                           in the Czech Republic. It has been designated as a
                           foreign utility company because it had developed initial
                           plans to add a 38 MW simple-cycle electric generating
                           unit on its site. Due to the general decline in business
                           conditions in the service territory of Kromeriz,
                           and a dwindling number of customers, HEDBV determined
                           to place Kromeriz in liquidation effective November 15,
                           2001. The activities of Kromeriz are now under the
                           control of a liquidating agent.

ITEM 9.  WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Continued)
-------  --------------------------------------------------------------

                           Horizon owns 100% of the capital stock of HEHI, which
                           owns 100% of the capital stock of HEDBV. HEDBV owns
                           100% of the capital stock of Kromeriz. The capital stock
                           of Kromeriz was transferred to HEDBV from Power
                           Development, s.r.o. (PD), a former wholly-owned subsidiary
                           of HEDBV. PD was dissolved based on HEDBV’s
                           determination to simplify the ownership structure of the companies.

                  (b)      Horizon owns 100% of the capital stock of HEHI, which
                           investment was valued at $112,492,000 as of September 30,
                           2001. HEHI owns 100% of the capital stock of
                           HEDBV, which investment was valued at $112,492,000 as
                           of September 30, 2001.  HEDBV owns 100% of the capital
                           stock of Kromeriz, and such investment was valued
                           at $(63,000) as of September 30, 2001. The financial
                           statements of Horizon and its subsidiaries are found
                           on pages 62 through 86 of this Form U5S.

                           There are no debts or other financial obligations of
                           HEHI, HEDBV or Kromeriz for which there is recourse,
                           directly or indirectly, to the registered holding company
                           or another system company. There are no direct or indirect
                           guaranties of any of the securities of Kromeriz by the
                           registered holding company. There have been no
                           transfers of any assets from any system company to Kromeriz.

                  (c)      The ratio of debt to comprehensive shareholders’
                           equity of Kromeriz was in excess of 100% as of September 30,
                           2001. Kromeriz had debt of $82,000 and negative comprehensive
                           shareholders’ equity of $(63,000). Kromeriz posted a
                           net loss of $(1,316,000) for the twelve months ended
                           September 30, 2001. The financial statements of Kromeriz
                           are found on pages 72 through 81 of this Form U5S.

                  (d)      There was a management support agreement between HED
                           and Kromeriz. Under this agreement, HED agreed to provide
                           management services (i.e., strategic, legal, marketing,
                           public relations and human resource services) to Kromeriz.
                           The agreement called for Kromeriz to pay HED CZK 210,000
                           on a monthly basis.

         B.       Interests in Exempt Wholesale Generators

                  1.       Horizon Power, Inc. (formerly NFR Power, Inc.)

                  (a)      Horizon Power, Inc. (Power)
                           10 Lafayette Square
                           Suite 900
                           Buffalo, New York  14203

                           Power has been designated as an exempt wholesale generator
                           by the Federal Energy Regulatory Commission and owns a
                           50% interest in each of Seneca Energy II, LLC
                           (Seneca Energy), Model City Energy, LLC (Model City)
                           and Energy Systems North East, LLC (ESNE). Seneca Energy
                           has a generating capacity of approximately 11.2
                           MW and generates electricity using methane gas obtained
                           from a landfill near Seneca Falls, New York. Model City has a

ITEM 9.  WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Continued)
-------  --------------------------------------------------------------

                           generating capacity of approximately 5.6 MW and generates
                           electricity in the same manner, from a landfill near Lewiston,
                           New York. The landfills are owned by outside parties.
                           Seneca Energy sells its electricity at wholesale to an
                           unaffiliated public utility. Model City sells its
                           electricity at wholesale to the New York Independent
                           System Operator. ESNE owns an 80 MW natural gas-fired
                           cogeneration power plant located near North East,
                           Pennsylvania. ESNE sells electricity at wholesale to
                           the New York Independent System Operator and sells thermal
                           energy to a grape processing plant. The Registrant owns
                           100% of the capital stock of Power.  Part I(b), Part I(c)
                           and Part I(d) for Power are filed pursuant to Rule 104(b).

ITEM 9.  WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Concluded)
-------  --------------------------------------------------------------

                  2.       Energy Systems North East, LLC

                  (a)      Energy Systems North East, LLC
                           10195 Ackerman Lane
                           North East, Pennsylvania  16428

                           ESNE has been designated as an exempt wholesale
                           generator by the Federal Energy Regulatory Commission.
                           ESNE owns an 80 MW natural gas-fired cogeneration power
                           plant located near North East, Pennsylvania. ESNE sells
                           electricity at wholesale to the New York Independent
                           System Operator and sells thermal energy to a grape
                           processing plant. The Registrant owns 100% of the capital
                           stock of Power, which owns 50% of the limited liability
                           company interests of ESNE.  Part I(b), Part I(c) and
                           Part I(d) for ESNE are filed pursuant to Rule 104(b).

Part II	Relationship of Exempt Wholesale Generators and Foreign Utility Companies to System Companies	

 	Organization charts showing the relationships of Kromeriz (now in liquidation), TL, UE, Power and ESNE to system companies are provided as Exhibits G-1, G-2 and G-3 to this Form U5S.	

Part III	Aggregate Investment in Exempt Wholesale Generators and Foreign Utility Companies	

 	Part III is filed pursuant to Rule 104(b).	

ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
                                                                         Page
                                                                         ----

National Fuel Gas Company and Subsidiaries:
Report of Independent Accountants                                         37
Consolidating and Consolidated Balance Sheet at September 30, 2001       38-41
Consolidating and Consolidated Statement of Income for the Fiscal
  Year Ended September 30, 2001                                          42-43
Consolidating and Consolidated Statement of Earnings Reinvested in
  the Business for the Fiscal Year Ended September 30, 2001              44-45
Consolidating and Consolidated Statement of Cash Flows for the
  Fiscal Year Ended September 30, 2001                                   46-49
Consolidating and Consolidated Statement of Comprehensive Income
  for the Fiscal Year Ended September 30, 2001                           50-51

Seneca Resources Corporation:
Consolidating Balance Sheet at September 30, 2001                         52
Consolidating Statement of Income for the Fiscal Year Ended
  September 30, 2001                                                      53
Consolidating Statement of Earnings Reinvested in the Business
  for the Fiscal Year Ended September 30, 2001                            54
Consolidating Statement of Cash Flows for the Fiscal Year
  Ended September 30, 2001                                                55
Consolidating Statement of Comprehensive Income for the Fiscal Year
  Ended September 30, 2001                                                56

National Fuel Exploration Corporation:
Consolidating Balance Sheet at September 30, 2001                         57
Consolidating Statement of Income for the Fiscal Year Ended
  September 30, 2001                                                      58
Consolidating Statement of Earnings Reinvested in the Business
  for the Fiscal Year Ended September 30, 2001                            59
Consolidating Statement of Cash Flows for the Fiscal Year
  Ended September 30, 2001                                                60
Consolidating Statement of Comprehensive Income for the Fiscal Year
  Ended September 30, 2001                                                61

Horizon Energy Development, Inc. and Subsidiaries:
Consolidating Balance Sheet at September 30, 2001                         62
Consolidating Statement of Income for the Fiscal Year Ended
  September 30, 2001                                                      63
Consolidating Statement of Earnings Reinvested in the Business
  for the Fiscal Year Ended September 30, 2001                            64
Consolidating Statement of Cash Flows for the Fiscal Year
  Ended September 30, 2001                                                65
Consolidating Statement of Comprehensive Income for the Fiscal Year
  Ended September 30, 2001                                                66

Horizon Energy Holdings, Inc.:
Consolidating Balance Sheet at September 30, 2001                         67
Consolidating Statement of Income for the Fiscal Year Ended
  September 30, 2001                                                      68
Consolidating Statement of Earnings Reinvested in the Business
  for the Fiscal Year Ended September 30, 2001                            69
Consolidating Statement of Cash Flows for the Fiscal Year
  Ended September 30, 2001                                                70
Consolidating Statement of Comprehensive Income for the Fiscal Year
  Ended September 30, 2001                                                71
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS (Concluded)
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
                                                                         Page
                                                                         ----

Horizon Energy Development B.V.:
Consolidating Balance Sheet at September 30, 2001                        72-73
Consolidating Statement of Income for the Fiscal Year Ended
  September 30, 2001                                                     74-75
Consolidating Statement of Earnings Reinvested in the Business
  for the Fiscal Year Ended September 30, 2001                           76-77
Consolidating Statement of Cash Flows for the Fiscal Year
  Ended September 30, 2001                                               78-79
Consolidating Statement of Comprehensive Income for the Fiscal Year
  Ended September 30, 2001                                               80-81

United Energy, a.s.:
Consolidating Balance Sheet at September 30, 2001                         82
Consolidating Statement of Income for the Fiscal Year Ended
  September 30, 2001                                                      83
Consolidating Statement of Earnings Reinvested in the Business
  for the Fiscal Year Ended September 30, 2001                            84
Consolidating Statement of Cash Flows for the Fiscal Year
  Ended September 30, 2001                                                85
Consolidating Statement of Comprehensive Income for the Fiscal Year
  Ended September 30, 2001                                                86

Notes to Consolidated Financial Statements                                 *

*	The Notes to Consolidated Financial Statements included in Item 8 of National Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 2001, are incorporated herein by reference.	
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
National Fuel Gas Company
In our opinion, the consolidated financial statements listed in the index appearing under Item 10 on Pages 35 and 36 present fairly, in all material respects, the financial position of National Fuel Gas Company and its subsidiaries at September 30, 2001, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Our audit was made for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The consolidating information on Pages 38 through 86 is presented for purposes of additional analysis rather than to present financial position, results of operations and cash flows of the individual companies. Accordingly, we do not express an opinion on the financial position, results of operations and cash flows of the individual companies. However, the consolidating information on Pages 38 through 86 has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.
PricewaterhouseCoopers LLP

Buffalo, New York
October 24, 2001, except for Note F,
as to which the date is December 3, 2001

                                      NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                                              CONSOLIDATING BALANCE SHEET
                                                 AT SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                                                                                                          Horizon
                                          National      National       Seneca                   Highland     Data-Track    National       Energy                      Seneca      Niagara
                             National     Fuel Gas      Fuel Gas      Resources      Leidy        Forest       Account        Fuel       Development,   Upstate        Indep.     Indpendence    Horizon     Total Before  Eliminations  Consolidated
                             Fuel Gas    Distribution    Supply      Corporation      Hub,      Resources,    Services,    Resources,       Inc.        Energy,       Pipeline    Marketing,      Power,     Eliminations  & Adjustments Company and
                             Company       Corp.         Corp.      (Consolidated)    Inc.         Inc.          Inc.         Inc.       (Consolidated)   Inc.        Company        Inc.          Inc.      & Adjustments  Dr (Cr)      Subsidiaries
                            -----------  -----------   -----------  -------------  ----------  -----------   -----------  -----------    -------------  ----------   -----------  -----------   -----------  ------------- ------------- ------------
ASSETS

PROPERTY, PLANT
& EQUIPMENT              $       132  $ 1,325,812     $ 802,188  $ 1,806,118         $   -     $ 65,991       $   185     $    972     $ 271,073      $   998      $      -          $ -       $   247  $ 4,273,716  $          -    $ 4,273,716

  Less: Accumulated
  Depreciation,
  Depletion and
  Amortization                     131      380,119       318,967      693,304             -        6,729            64          709        92,824          104             -            -            52    1,493,003             -      1,493,003
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------
                                     1      945,693       483,221    1,112,814             -       59,262           121          263       178,249          894             -            -           195    2,780,713             -      2,780,713
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------

CURRENT ASSETS:

  Cash and Temporary
    Cash Investments                (4)       5,455           311          557            95          187           211       22,640         5,809          126            14            1           799       36,201            26         36,227
  Notes Receivable
    -Intercompany              524,500            -             -       30,300           800            -           700            -           800            -             -            -             -      557,100      (557,100)             -
  Allowance for
    Uncollectible
    Accounts                         -      (15,246)         (242)        (132)            -            -             -       (2,138)         (762)           -             -            -             -      (18,520)            -        (18,520)
  Accounts Receivable
    -Intercompany               26,942        9,163         4,926        4,543             3           83           103        4,231            36            -             -            -             -       50,030       (50,030)             -
  Accounts Receivable              407       86,927         8,172       34,282             -        2,499             2       11,816         5,717           48             -            -           376      150,246             -        150,246
  Unbilled Utility
    Revenue                          -       21,535             -            -             -            -             -            -         3,840            -             -            -             -       25,375             -         25,375
  Dividends Receivable
    -Intercompany               17,354            -             -            -             -            -             -            -             -            -             -            -             -       17,354       (17,354)             -
  Materials and
    Supplies - at
    average cost                     -        5,141         7,625        3,513             -       16,390             -            -         3,014            -             -            -             -       35,683        (1,973)        33,710
  Gas Stored
    Underground                      -       69,537             -            -             -            -             -        9,288             -        4,406             -            -             -       83,231             -         83,231
  Unrecovered
    Purchased
    Gas Costs                        -        4,113             -            -             -            -             -            -             -            -             -            -             -        4,113             -          4,113
  Prepayments                      531       27,741         4,716        6,288             -           73            12          127            27            -             -            -             6       39,521            (1)        39,520
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------
                               569,730      214,366        25,508       79,351           898       19,232         1,028       45,964        18,481        4,580            14            1         1,181      980,334      (626,432)       353,902
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------

OTHER ASSETS:

  Recoverable Future
    Taxes                            -       81,641         4,945            -             -            -             -            -             -            -             -            -             -       86,586             -         86,586
  Unamortized Debt
    Expense                      8,059        8,439         5,648            -             -            -             -            -             -            -             -            -             -       22,146        (2,350)        19,796
  Other Regulatory
    Assets                       5,579       15,292         2,382            -             -            -             -            -             -            -             -            -             -       23,253             -         23,253
  Deferred Charges               1,505        2,806         4,632          509             -            -             -          696            40            -             -            -             -       10,188        (1,052)         9,136
  Fair Value of Derivative
    Financial Instruments            -            -             -       36,413             -            -             -            -             -        1,171             -            -             -       37,584             1         37,585
  Investment in
    Associated
    Companies                  952,182            -            61            -             -            -             -            -             -            -             -            -             -      952,243      (952,243)             -
  Notes Receivable -
    Intercompany             1,124,000            -             -            -             -            -             -            -             -            -             -            -             -    1,124,000    (1,124,000)             -
  Other                         17,958       15,953         8,946        2,068             -        1,180             -       21,591         9,590            -        14,632            -        16,789      108,707        25,888        134,595
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------
                             2,109,283      124,131        26,614       38,990             -        1,180             -       22,287         9,630        1,171        14,632            -        16,789    2,364,707    (2,053,756)       310,951
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------
                           $ 2,679,014  $ 1,284,190     $ 535,343  $ 1,231,155         $ 898     $ 79,674       $ 1,149     $ 68,514     $ 206,360      $ 6,645      $ 14,646          $ 1      $ 18,165  $ 6,125,754   $(2,680,188)   $ 3,445,566
                            ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========    ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                      NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                                              CONSOLIDATING BALANCE SHEET
                                                 AT SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                                                                                                          Horizon
                                          National      National       Seneca                    Highland     Data-Track    National       Energy                      Seneca      Niagara
                             National     Fuel Gas      Fuel Gas     Resources       Leidy        Forest       Account        Fuel       Development,   Upstate        Indep.     Indpendence    Horizon     Total Before  Eliminations  Consolidated

                             Fuel Gas    Distribution    Supply      Corporation      Hub,      Resources,    Services,    Resources,       Inc.        Energy,       Pipeline    Marketing,      Power,     Eliminations  & Adjustments Company and
                             Company       Corp.         Corp.      (Consolidated)    Inc.         Inc.          Inc.         Inc.       (Consolidated)   Inc.        Company        Inc.          Inc.      & Adjustments  Dr (Cr)      Subsidiaries
                            -----------  -----------   -----------  --------------  ---------  -----------   -----------  -----------   --------------- --------   -----------  -----------   -----------  --------------- ------------- ------------

CAPITALIZATION
AND LIABILITIES

CAPITALIZATION:
  Common Stock $1 Par
    Value; Authorized -
    200,000,000 Shares;
    Issued and
    Outstanding -
    79,406,105 Shares       $   79,406  $         -     $       -  $         -         $   -     $      -       $     -     $      -     $       -      $     -       $     -          $ -      $      -    $    79,406    $        -  $    79,406
  Capital Stock of
    Subsidiaries                     -       59,170        25,345          500             4            4             1           10             5            1             1            1             1         85,043       (85,043)           -
  Paid in Capital              430,618      121,668        35,894      104,035         1,365        3,005           499       33,490        38,246        6,800             -            -         5,020        780,640      (350,022)     430,618
  Earnings  Reinvested
    in the Business            513,488      331,562       227,528      (22,012)         (639)       5,674           268       (2,299)       (9,143)      (5,945)          467            -           715      1,039,664      (526,176)     513,488
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------
  Total Common Shareholder
    Equity Before Items of
    Other Comprehensive
    Income                   1,023,512      512,400       288,767       82,523           730        8,683           768       31,201        29,108          856           468            1         5,736      1,984,753      (961,241)   1,023,512
  Accumulated Other
    Comprehensive
    Income (Loss)              (20,857)           -           644         (779)            -            -             -         (914)      (20,253)      (1,071)            -            -             -        (43,230)       22,373      (20,857)
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------
  Total Comprehensive
    Shareholders' Equity     1,002,655      512,400       289,411       81,744           730        8,683           768       30,287         8,855         (215)          468            1         5,736      1,941,523      (938,868)   1,002,655

  Long-Term Debt,
    Net of Current
    Portion                  1,024,000          219             -            -             -            -             -            -        22,475            -             -            -             -      1,046,694             -    1,046,694
  Notes Payable -
    Intercompany                     -      299,000       115,000      620,000             -            -             -            -        90,000            -             -            -             -      1,124,000    (1,124,000)           -
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------
  Total Capitalization       2,026,655      811,619       404,411      701,744           730        8,683           768       30,287       121,330         (215)          468            1         5,736      4,112,217    (2,062,868)   2,049,349
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------

  Minority Interest in
    Foreign Subsidiaries             -            -             -            -             -            -             -            -        22,324            -             -            -             -         22,324             -       22,324
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------

CURRENT AND ACCRUED
LIABILITIES:
  Notes Payable to
    Banks and
    Commercial Paper           459,900            -             -       15,675             -            -             -            -        14,098            -             -            -             -        489,673             -      489,673
  Notes Payable -
    Intercompany                32,600       74,600        33,400      291,900             -       62,900             -       19,000        13,700        3,600        13,200            -        12,200        557,100      (557,100)           -
  Current Portion of
    Long-Term Debt             100,000          297           136            -             -            -             -            -         9,002            -             -            -             -        109,435             -      109,435
  Accounts Payable                  36       35,966        12,592       58,797             -        5,196           107          218         8,854        1,000             -            -            12        122,778        (4,273)     118,505
  Amounts Payable to
    Customers                        -       51,223             -            -             -            -             -            -             -            -             -            -             -         51,223             -       51,223
  Accounts Payable -
    Intercompany                 1,608       14,697         6,945       19,355            34        1,508           298          214         3,844        4,733            46            -            34         53,316       (53,316)           -
  Dividends Payable -
    Intercompany                     -        8,700         6,154        2,000             -          400             -          100             -            -             -            -             -         17,354       (17,354)           -
  Other Accruals and
    Current Liabilities         53,934       38,258           563         (525)            -          (81)          (17)       2,357         2,838       (1,882)            5            -          (230)        95,220          (586)      94,634
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------
                               648,078      223,741        59,790      387,202            34       69,923           388       21,889        52,336        7,451        13,251            -        12,016      1,496,099      (632,629)     863,470
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------

DEFERRED CREDITS:
  Accumulated Deferred
    Income  Taxes                   53      134,604        59,197      138,275           133          562           (49)      (2,035)        9,223         (591)          927            -           413        340,712          (153)     340,559
  Taxes Refundable to
    Customers                        -       19,541        (2,676)           -             -            -             -            -             -            -             -            -             -         16,865             -       16,865
  Unamortized
    Investment Tax
     Credit                          -        9,315           284            -             -            -             -            -             -            -             -            -             -          9,599             -        9,599
  Fair Value of Derivative
   Financial Instruments             -            -             -            -             -            -             -       16,500           581            -             -            -             -         17,081             -       17,081
  Other Deferred
    Credits                      4,228       85,370        14,337        3,934             1          506            42        1,873           566            -             -            -             -        110,857        15,462      126,319
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------
                                 4,281      248,830        71,142      142,209           134        1,068            (7)      16,338        10,370         (591)          927            -           413        495,114        15,309      510,423
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------
                            $ 2,679,014 $ 1,284,190     $ 535,343  $ 1,231,155         $ 898     $ 79,674       $ 1,149     $ 68,514     $ 206,360      $ 6,645      $ 14,646          $ 1      $ 18,165    $ 6,125,754   $(2,680,188) $ 3,445,566
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------    -----------   -----------  -----------

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                      NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                                           CONSOLIDATING STATEMENT OF INCOME
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                                                                                                           Horizon
                                          National      National        Seneca                    Highland     Data-Track    National       Energy                     Seneca      Niagara
                             National     Fuel Gas      Fuel Gas      Resources       Leidy        Forest       Account        Fuel       Development,   Upstate        Indep.     Indpendence    Horizon     Total Before   Eliminations   Consolidated
                             Fuel Gas    Distribution    Supply      Corporation      Hub,      Resources,    Services,    Resources,       Inc.         Energy,       Pipeline    Marketing,      Power,     Eliminations   & Adjustments  Company and
                             Company       Corp.         Corp.      (Consolidated)    Inc.         Inc.          Inc.         Inc.       (Consolidated)    Inc.        Company        Inc.          Inc.      & Adjustments   Dr (Cr)       Subsidiaries
                            -----------  -----------   -----------  -------------   ----------  -----------   -----------  -----------   --------------  --------    -----------  -----------   -----------  --------------  -------------  ------------

OPERATING REVENUE:            $      -   $ 1,234,648    $ 171,091    $ 409,956          $  -     $ 41,927         $ 464    $ 259,205      $ 97,910     $ 17,480        $    -          $ -         $ 377       $ 2,233,058    $ (132,706) $ 2,100,352
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------

OPERATING EXPENSE:
  Purchased Gas                      -      839,539         1,860       44,954             -            -             -      255,629             -       22,090             -            -             -         1,164,072      (118,267)   1,045,805
  Fuel Used in Heat and
    Electric Generation              -            -             -            -             -            -             -        1,634        53,334            -             -            -             -            54,968             -       54,968
  Operation                      4,536      159,196        50,391       78,177            18       34,558           426        5,991        23,115        2,735            11            -           703           359,857       (16,164)     343,693
  Maintenance                        -       12,285         8,112            -             -          190             -            -            38            -             -            -             -            20,625             -       20,625
  Property, Franchise &
    Other Taxes                    522       57,939         9,887       13,035             -           35             -          106         2,184            -             -            -            22            83,730             -       83,730
  Impairment of Oil and
    Gas Producing
    Properties                       -            -             -      180,781             -            -             -            -             -            -             -            -             -           180,781             -      180,781
  Depreciation, Depletion
    and Amortization                 2       36,607        23,746       99,245             -        2,297            37          212        12,634           50             -            -            32           174,862            52      174,914
  Income Taxes                     227       42,985        29,327      (33,218)           10        1,703            21       (1,660)          253       (2,754)         (237)           -           442            37,099             7       37,106
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------
                                 5,287    1,148,551       123,323      382,974            28       38,783           484      261,912        91,558       22,121          (226)           -         1,199         2,075,994      (134,372)   1,941,622
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------
  Operating Income
    (Loss)                      (5,287)      86,097        47,768       26,982           (28)       3,144           (20)      (2,707)        6,352       (4,641)          226            -          (822)          157,064         1,666      158,730
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------

OTHER INCOME:
  Unremitted Earnings
    of Subsidiaries             (1,929)           -             -            -             -            -             -            -             -            -             -            -             -            (1,929)        1,929            -
  Dividends from
    Subsidiaries                69,416            -             -            -             -            -             -            -             -            -             -            -             -            69,416       (69,416)           -
  Interest-Intercompany        104,988           70             -        1,478            43            -            37            -            23            -             -            -             -           106,639      (106,639)           -
  Other                            258        2,030         4,512        1,521             -        2,414             -          924         1,891            -             -            -         1,846            15,396          (140)      15,256
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------
                               172,733        2,100         4,512        2,999            43        2,414            37          924         1,914            -             -            -         1,846           189,522      (174,266)      15,256
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------
  Income (Loss) Before
    Interest Charges
    and Minority
    Interest in
    Foreign
    Subsidiaries               167,446       88,197        52,280       29,981            15        5,558            17       (1,783)        8,266       (4,641)          226            -         1,024           346,586      (172,600)     173,986
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------

INTEREST CHARGES:
  Interest on Long-Term
    Debt                        78,231            -             -           55             -            -             -            -         3,565            -             -            -             -            81,851             -       81,851
  Interest-Intercompany          1,651       26,083        10,882       56,327             -        3,120             -        1,684         5,738          488           666            -             -           106,639      (106,639)           -
  Other Interest                22,065        1,406           582          620             -            -             -          (35)          662            -             -            -           204            25,504          (210)      25,294
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------
                               101,947       27,489        11,464       57,002             -        3,120             -        1,649         9,965          488           666            -           204           213,994      (106,849)     107,145
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------

  Minority Interest in
    Foreign Subsidiaries             -            -             -            -             -            -             -            -        (1,342)           -             -            -             -            (1,342)            -       (1,342)
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------       -----------   -----------  -----------

  Net Income (Loss)
    Available for
    Common Stock              $ 65,499  $    60,708     $  40,816    $ (27,021)         $ 15     $  2,438         $  17    $  (3,432)     $ (3,041)    $ (5,129)       $ (440)         $ -         $ 820       $   131,250    $  (65,751) $    65,499
                            ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========       ===========   ===========  ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of NationalBasic Earnings Per Common Share

Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,                                            Net Income Available for Common Stock                                                                              $ 0.83
incorporated herein by reference.                                                                                                                                                                                                          ===========

Diluted Earnings Per Common Share
                                                                                                                            Net Income Available for Common Stock                                                                              $ 0.82
                                                                                                                                                                                                                                           ===========

Weighted Average Common Shares Outstanding
                                                                                                                            Used in Basic Calculation                                                                                      79,053,444
                                                                                                                                                                                                                                           ===========
                                                                                                                            Used in Diluted Calculation                                                                                    80,361,258
                                                                                                                                                                                                                                           ===========
                                      NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                            CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                                                                                                           Horizon
                                          National      National       Seneca                    Highland     Data-Track    National       Energy                       Seneca       Niagara
                             National     Fuel Gas      Fuel Gas      Resources      Leidy        Forest       Account        Fuel       Development,    Upstate        Indep.     Indpendence    Horizon     Total Before   Eliminations   Consolidated
                             Fuel Gas    Distribution    Supply      Corporation      Hub,      Resources,    Services,    Resources,       Inc.         Energy,       Pipeline    Marketing,      Power,     Eliminations   & Adjustments  Company and
                             Company       Corp.         Corp.      (Consolidated)    Inc.         Inc.          Inc.         Inc.       (Consolidated)    Inc.        Company        Inc.          Inc.      & Adjustments   Dr (Cr)       Subsidiaries
                            -----------  -----------   -----------  -------------  ----------  -----------   -----------  -----------   ---------------  ---------   -----------  -----------   -----------  --------------  -------------  ------------

EARNINGS REINVESTED
IN THE BUSINESS

  Balance at Beginning
    of Year                  $ 525,847    $ 305,654     $ 211,328    $  13,009        $ (654)     $ 4,836         $ 251     $  1,533      $ (6,102)    $   (816)        $ 907          $ -        $ (105)    $ 1,055,688      $ (529,841)     $ 525,847

  Net Income (Loss)
    Available for
    Common Stock                65,499       60,708        40,816      (27,021)           15        2,438            17       (3,432)       (3,041)      (5,129)         (440)           -           820         131,250         (65,751)        65,499

  Dividends on Common
    Stock (2001 - $0.99
    per share)                 (77,858)     (34,800)      (24,616)      (8,000)            -       (1,600)            -         (400)            -            -             -            -             -        (147,274)         69,416        (77,858)
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------   -----------     -----------     -----------    -----------

  Balance at End of Year     $ 513,488    $ 331,562     $ 227,528    $ (22,012)       $ (639)     $ 5,674         $ 268     $ (2,299)     $ (9,143)    $ (5,945)        $ 467          $ -        $  715      $ 1,039,664     $ (526,176)     $ 513,488
                            ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========   ===========     ===========     ===========    ===========

At September 30, 2001ANALYSIS OF INVESTMENTS IN ASSOCIATED COMPANIES AT SEPTEMBER 30, 2001

                                                                                                                                                       Par or                    Earnings                                  Total Investment
Intercompany Eliminations:                                                                                                                           Stated Value               Reinvested in   Unremitted    Accumulated   in Associated
                                                                                                                                                         of           Paid      the Business     Earnings        Other       Companies
                                                                                                                                                     Subsidiary        In           at            Since        Comprehensive     at
Earnings Reinvested in the Business:                                                                                                                   Stock        Capital     Acquisition     Acquisition      Income        Equity
                                                                                                                                                     -----------   -----------  -----------     -----------    -----------   -----------
  Unremitted Earnings of SubsidiariesRegistrant:
    Since Acquisition                                     532,456                                                           Distribution
  Earnings Reinvested in the Business                                                                                         Corporation              $ 59,170     $ 121,668      $ 4,636       $ 326,926     $      -     $ 512,400
    of Subsidiaries at Acquisition                          7,095                                                           Supply Corporation           25,345        35,833        2,453         225,075          644       289,350
  Consolidating Adjustment                                (13,375)                                                          Seneca Resources                500       104,035            6         (22,018)        (779)       81,744
                                                       -----------
                                                        $ 526,176                                                           Leidy Hub                         4         1,365            -            (639)           -           730
                                                       ===========
                                                                                                                            Highland                          4         3,005            -           5,674            -         8,683
                                                                                                                            Data-Track                        1           499            -             268            -           768
Net Income Available for Common Stock:                                                                                      NFR                              10        33,490            -          (2,299)        (914)       30,287
  Subsidiaries-Dividends on                                                                                                 Horizon                           5        38,246            -          (9,143)     (20,253)        8,855
    Common Stock                                           69,416                                                           Upstate                           1         6,800            -          (5,945)      (1,071)         (215)
  Unremitted Earnings of Subsidiaries                      (1,929)                                                          Seneca Independence               1             -            -             467            -           468
  Consolidating Adjustment                                 (1,736)                                                          Niagara Independence              1             -            -               -            -             1
                                                       -----------
                                                           65,751                                                           Horizon Power, Inc.               1         5,020            -             715            -         5,736
                                                       ===========
                                                                                                                            Consolidating
                                                                                                                              Adjustment                      -             -            -          13,375            -        13,375
                                                                                                                                                     -----------   -----------  -----------     -----------  -----------   -----------
See Notes to Consolidated  Financial  Statements  included in Item 8 of National                                                                         85,043       349,961        7,095         532,456      (22,373)      952,182
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.                                                                                         Supply Corporation:
                                                                                                                            Seneca Resources                  -            61            -               -            -            61
                                                                                                                                                     -----------   -----------  -----------     -----------  -----------   -----------
                                                                                                                                                       $ 85,043     $ 350,022      $ 7,095       $ 532,456     $(22,373)    $ 952,243
                                                                                                                                                     ===========   ===========  ===========     ===========  ===========   ===========

                                       NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                                         CONSOLIDATING STATEMENT OF CASH FLOWS
                                      FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                 (THOUSANDS OF DOLLARS)

                                                                                                                                          Horizon
                                              National     National       Seneca                   Highland    Data-Track    National      Energy                      Seneca      Niagara
                                 National     Fuel Gas     Fuel Gas      Resources      Leidy       Forest      Account        Fuel      Development,    Upstate       Indep.     Indpendence   Horizon     Total Before   Eliminations    Consolidated
                                 Fuel Gas    Distribution   Supply      Corporation     Hub,      Resources,   Services,    Resources,      Inc.         Energy,      Pipeline    Marketing,    Power,      Eliminations   & Adjustments   Company and
                                 Company       Corp.        Corp.      (Consolidated)   Inc.         Inc.         Inc.         Inc.      (Consolidated)    Inc.       Company        Inc.        Inc.       & Adjustments   Dr (Cr)        Subsidiaries
                                -----------  -----------  -----------  --------------  ---------  -----------  -----------  -----------  --------------  ----------  -----------  -----------  ----------   -------------  -------------   ------------
OPERATING ACTIVITIES:
Net Income (Loss) Available
  for Common Stock                $ 65,499     $ 60,708     $ 40,816    $ (27,021)        $ 15     $  2,438        $  17     $ (3,432)   $  (3,041)    $ (5,129)      $ (440)         $ -        $ 820        $ 131,250      $ (65,751)      $  65,499
Adjustments to Reconcile Net
  Income to Net Cash Provided
  by Operating Activities:
    Unremitted (Earnings)/
      Loss of Subsidiaries           1,929            -            -            -            -            -            -            -            -            -            -            -            -            1,929         (1,929)              -
  Dividend Income from
      Subsidiaries                       -            -            -            -            -            -            -            -            -            -            -            -            -                -              -               -
  Impairment of Oil & Gas
      Producing Properties               -            -            -      180,781            -            -            -            -            -            -            -            -            -          180,781              -         180,781
  Depreciation, Depletion
      and Amortization                   2       36,607       23,746       99,246            -        2,297           37          212       12,634           50            -            -           32          174,863             51         174,914
  Deferred Income Taxes                243      (18,002)       3,894      (44,345)          (1)         557           11        1,109          210           59            -            -          416          (55,849)             -         (55,849)
  Minority Interest in Foreign
      Subsidiaries                       -            -            -            -            -            -            -            -        1,342            -            -            -            -            1,342              -           1,342
  Other                              1,502          993       (1,619)        (797)           -       (1,624)           -            2        1,214            -            -            -            -             (329)         6,882           6,553

Change in:
  Receivables and Unbilled
      Utility Revenue                  (64)     (17,442)       4,150       11,124            -         (577)          (2)       1,187         (402)         (31)           -            -         (242)          (2,299)             -          (2,299)
  Accounts Receivable-
      Intercompany                  (5,285)      (3,668)       5,101          768            2          279            2        3,508          (36)           -            -            -          700            1,371         (1,371)              -
  Gas Stored Underground
      and Material and Supplies          -      (40,887)         126          636            -      (10,606)           -        4,487          932        8,279            -            -            -          (37,033)           (21)        (37,054)
  Unrecovered Purchased Gas Costs        -       25,568            -            -            -            -            -            -            -            -            -            -            -           25,568              -          25,568
  Prepayments                          (24)      (5,129)         123        4,719            -          324           (7)        (432)          33            -            -            -           (6)            (399)             -            (399)
  Accounts Payable                     (14)     (13,204)       2,730       31,553            -        3,606           96       (4,862)        (369)       1,000            -            -          (14)          20,522           (103)         20,419
  Amounts Payable to Customers           -       41,640            -            -            -            -            -            -            -            -            -            -            -           41,640              -          41,640
  Accounts Payable-Intercompany        708          969        1,411        4,169           (3)      (1,096)         104          (10)         466       (3,036)         (38)           -           (9)           3,635         (3,635)              -
  Other Accruals and Current
      Liabilities                    9,503        7,839       (8,953)       3,599           (3)        (949)         (33)      (1,109)       5,862       (1,750)         183            -         (227)          13,962              7          13,969
  Other Assets                      (2,734)      (1,164)      (4,340)       1,153            -            -            -      (21,538)      (1,345)       1,359            -            -         (742)         (29,351)        (4,878)        (34,229)
  Other Liabilities                 (2,224)      14,584       (1,607)     (16,164)          (1)        (160)         (45)      14,996         (316)      (4,731)           -            -            -            4,332          8,957          13,289
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------   ----------       ----------     ----------     -----------

  Net Cash Provided by
      (Used in) Operating
      Activities                  $ 69,041     $ 89,412     $ 65,578    $ 249,421          $ 9     $ (5,511)       $ 180     $ (5,882)    $ 17,184     $ (3,930)      $ (295)         $ -        $ 728        $ 475,935      $ (61,791)      $ 414,144
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------   ----------       ----------     ----------     -----------

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

(Consolidating Statement of Cash Flows continues on pages 48 and 49)

                                       NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                                         CONSOLIDATING STATEMENT OF CASH FLOWS
                                      FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                 (THOUSANDS OF DOLLARS)

                                                                                                                                          Horizon
                                              National     National       Seneca                   Highland    Data-Track    National      Energy                     Seneca        Niagara
                                 National     Fuel Gas     Fuel Gas      Resources      Leidy       Forest      Account        Fuel      Development,    Upstate       Indep.     Indpendence   Horizon     Total Before   Eliminations    Consolidated
                                 Fuel Gas    Distribution   Supply      Corporation     Hub,      Resources,   Services,    Resources,      Inc.         Energy,      Pipeline    Marketing,    Power,      Eliminations   & Adjustments   Company and
                                 Company       Corp.        Corp.      (Consolidated)   Inc.         Inc.         Inc.         Inc.      (Consolidated)    Inc.       Company        Inc.        Inc.       & Adjustments     Dr (Cr)      Subsidiaries
                                -----------  -----------  -----------  --------------  ----------  -----------  -----------  -----------  -------------  ----------  -----------  -----------  ----------   -------------  ------------    ------------
INVESTING ACTIVITIES:
Capital Expenditures                  $  -    $ (42,374)   $ (24,998)  $ (206,300)       $   -     $ (3,245)       $ (41)    $   (116)   $ (15,587)       $  (8)        $  -          $ -       $ (37)      $ (292,706)        $  -         $ (292,706)
Investment in Subsidiaries,
  Net of Cash Acquired                   -            -            -      (90,567)           -            -            -            -            -            -            -            -           -          (90,567)           -            (90,567)
Dividends Received from
  Subsidiaries                           -            -            -            -            -            -            -            -            -            -            -            -           -                -            -                  -
Investment in Associated
  Companies                        (36,800)           -            -            -            -            -            -            -            -            -            -            -           -          (36,800)      36,800                  -
Investment in Partnerships               -            -            -            -            -            -            -            -            -            -         (980)           -        (850)          (1,830)           -             (1,830)
Change in Notes
  Receivable - Intercompany        (39,200)           -            -            -            -            -            -            -            -            -            -            -           -          (39,200)      39,200                  -
Other                                    -           37            6       (5,224)           -        7,446            -            -        7,007            -            -            -     (11,500)          (2,228)        (712)            (2,940)
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------       ----------   ----------        -----------

Net Cash Provided by (Used In)
  Investing  Activities            (76,000)     (42,337)     (24,992)    (302,091)           -        4,201          (41)        (116)      (8,580)          (8)        (980)           -     (12,387)        (463,331)      75,288           (388,043)
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------       ----------   ----------        -----------

FINANCING ACTIVITIES:
Change in Notes Payable to
  Banks and Commercial Paper      (141,300)           -            -        2,912            -            -            -            -       (5,009)           -            -            -           -         (143,397)           -           (143,397)
Change in Notes
  Payable-Intercompany               9,100       (8,400)     (16,500)      52,300            -        2,800            -      (14,900)       4,200       (2,800)       1,200            -      12,200           39,200      (39,200)                 -
Capital Contribution                     -            -            -            -            -            -            -       30,000            -        6,800            -            -           -           36,800      (36,800)                 -
Net Proceeds from Issuance of
  Long-Term Debt                   197,294            -            -            -            -            -            -            -       12,927            -            -            -           -          210,221            -            210,221
Reduction of Long-Term Debt              -         (454)        (127)      (1,747)           -            -            -            -      (20,724)           -            -            -           -          (23,052)           -            (23,052)
Proceeds from Issuance of
  Common Stock                      18,477            -            -            -            -            -            -            -            -            -            -            -           -           18,477       (6,932)            11,545
Dividends Paid on Common Stock     (76,671)     (34,800)     (24,616)      (8,000)           -       (1,600)           -         (400)           -            -            -            -           -         (146,087)      69,416            (76,671)
Dividends Paid to Minority
  Interest                               -            -            -            -            -            -            -            -            -            -            -            -           -                -            -                  -
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------       ----------   ----------        -----------

Net Cash Provided by (Used in)
  Financing Activities               6,900      (43,654)     (41,243)      45,465            -        1,200            -       14,700       (8,606)       4,000        1,200            -      12,200           (7,838)     (13,516)           (21,354)
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------       ----------   ----------        -----------

Effect of Exchange Rates
  on Cash                                -            -            -         (853)           -            -            -            -          208            -            -            -           -             (645)           -               (645)
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------       ----------   ----------        -----------

Net Increase (Decrease) in
  Cash and Temporary Cash
  Investments                          (59)       3,421         (657)      (8,058)           9         (110)         139        8,702          206           62          (75)           -         541            4,121          (19)             4,102

Cash and Temporary Cash
  Investments at Beginning
  of Year                               55        2,034          968        8,615           86          297           72       13,938        5,603           64           89            1         258           32,080           45             32,125
                                -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------       ----------   ----------        -----------

Cash and Temporary Cash
  Investments at End of Year          $ (4)     $ 5,455        $ 311        $ 557         $ 95        $ 187        $ 211     $ 22,640      $ 5,809        $ 126         $ 14          $ 1       $ 799         $ 36,201         $ 26           $ 36,227
                                ===========  ===========  ===========  ===========  ===========  ===========  ===========  ===========  ===========  ===========  ===========  ===========  ==========       ==========   ==========        ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                      NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
                                    CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                                                                                                            Horizon
                                          National      National       Seneca                    Highland     Data-Track    National        Energy                       Seneca      Niagara
                             National     Fuel Gas      Fuel Gas      Resources       Leidy        Forest       Account        Fuel        Development,    Upstate        Indep.     Indpendence    Horizon     Total Before   Eliminations    Consolidated
                             Fuel Gas    Distribution    Supply      Corporation       Hub,      Resources,    Services,    Resources,        Inc.         Energy,       Pipeline    Marketing,      Power,     Eliminations   & Adjustments   Company and
                             Company       Corp.         Corp.      (Consolidated)     Inc.         Inc.          Inc.         Inc.       (Consolidated)    Inc.         Company        Inc.          Inc.      & Adjustments     Dr (Cr)      Subsidiaries
                            -----------  -----------   -----------  -------------   ----------  -----------   -----------  -----------   ---------------  ---------    -----------  -----------   -----------  --------------  -------------   ------------
Net Income (Loss) Available
  for Common Stock            $ 65,499     $ 60,708      $ 40,816    $ (27,021)         $ 15      $ 2,438          $ 17     $ (3,432)       $ (3,041)     $ (5,129)       $ (440)         $ -         $ 820      $ 131,250       $ (65,751)      $ 65,499

Other Comprehensive Income
  (Loss), Before Tax:
  Foreign Currency
    Translation Adjustment      (7,158)           -             -      (14,850)            -            -             -            -           7,692             -             -            -             -        (14,316)          7,158         (7,158)
  Unrealized Gain / (Loss) on
    Securities Available
    for Sale Arising During
    the Period                    (712)           -             -            -             -            -             -            -               -             -             -            -             -           (712)              -           (712)
  Unrealized Gain / (Loss) on
    Derivative Financial
    Instruments During
    the Period                  58,355            -         1,606       59,986             -            -             -       (1,450)           (139)       (1,648)            -            -             -        116,710         (58,355)        58,355
  Reclassification Adjustment
    for Realized (Gains)/Losses
    on Derivative Financial
    Instruments
    in Net Income               83,218            -          (438)      82,859             -            -             -            -             796             -             -            -             -        166,435         (83,217)        83,218
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------     -----------   -----------   -----------  -----------   -----------    -----------     -----------    -----------
Other Comprehensive Income
(Loss), Before Tax             133,703            -         1,168      127,995             -            -             -       (1,450)          8,349        (1,648)            -            -             -        268,117        (134,414)       133,703
  Income Tax Expense/(Benefit)
    Related to Unrealized
    Gain/(Loss) on Securities
    Available for Sale Arising
    During the Period             (249)           -             -            -             -            -             -            -               -             -             -            -             -           (249)              -           (249)
  Income Tax Expense/(Benefit)
    Related to Unrealized
    Gain/(Loss) on Derivative
    Financial Instruments
    During the Period           23,053            -           622       23,586             -            -             -         (535)            (43)         (577)            -            -             -         46,106         (23,053)        23,053
  Reclassification Adjustment
    for Income Tax Benefit/
    (Expense) on Derivative
    Financial Instruments
    in Net Income               32,032            -          (169)      31,955             -            -             -            -             247             -             -            -             -         64,065         (32,033)        32,032
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------     -----------   -----------   -----------  -----------   -----------    -----------     -----------    -----------
Income Taxes - Net              54,836            -           453       55,541             -            -             -         (535)            204          (577)            -            -             -        109,922         (55,086)        54,836
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------     -----------   -----------   -----------  -----------   -----------    -----------     -----------    -----------
Other Comprehensive Income
  (Loss), Before Cumulative
  Effect, Net of Tax            78,867            -           715       72,454             -            -             -         (915)          8,145        (1,071)            -            -             -        158,195         (79,328)        78,867
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------     -----------   -----------   -----------  -----------   -----------    -----------     -----------    -----------

Cumulative Effect of
  Change in Accounting         (69,767)           -           (72)     (68,902)            -            -             -            -            (793)            -             -            -             -       (139,534)         69,767        (69,767)
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------     -----------   -----------   -----------  -----------   -----------    -----------     -----------    -----------

Other Comprehensive Income
  (Loss), After Cumulative
   Effect, Net of Tax            9,100            -           643        3,552             -            -             -         (915)          7,352        (1,071)            -            -             -         18,661          (9,561)         9,100
                            -----------  -----------   -----------  -----------   -----------  -----------   -----------  -----------     -----------   -----------   -----------  -----------   -----------    -----------     -----------    -----------

Comprehensive Income (Loss)   $ 74,599     $ 60,708      $ 41,459    $ (23,469)         $ 15      $ 2,438          $ 17     $ (4,347)       $  4,311      $ (6,200)       $ (440)         $ -         $ 820      $ 149,911       $ (75,312)      $ 74,599
                            ===========  ===========   ===========  ===========   ===========  ===========   ===========  ===========     ===========   ===========   ===========  ===========   ===========    ===========     ===========    ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                             SENECA RESOURCES CORPORATION
                                              CONSOLIDATING BALANCE SHEET
                                                 AT SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                          National
                                          Seneca            Fuel                                          Consolidated
                                         Resources       Exploration     Total Before                      Seneca and
                                        Corporation     (Consolidated)   Eliminations    Eliminations      Subsidiary
                                       --------------   --------------  ---------------  --------------   --------------

ASSETS

PROPERTY, PLANT & EQUIPMENT              $ 1,334,320        $ 471,798      $ 1,806,118      $        -      $ 1,806,118
  Less: Accumulated  DD&A                    474,870          218,434          693,304               -          693,304
                                       --------------   --------------  ---------------  --------------   --------------
                                             859,450          253,364        1,112,814               -        1,112,814
                                       --------------   --------------  ---------------  --------------   --------------
CURRENT ASSETS:
  Cash and Temporary Cash Investments            214              343              557               -              557
  Allowance for Uncollectible Accounts          (132)               -             (132)              -             (132)
  Notes Receivable - Intercompany             30,300                -           30,300               -           30,300
  Accounts Receivable                         25,312            8,970           34,282               -           34,282
  Accounts Receivable - Intercompany          20,773                -           20,773         (16,230)           4,543
  Materials and Supplies                         841            2,672            3,513               -            3,513
  Prepayments                                  5,521              767            6,288               -            6,288
                                       --------------   --------------  ---------------  --------------   --------------
                                              82,829           12,752           95,581         (16,230)          79,351
                                       --------------   --------------  ---------------  --------------   --------------
OTHER ASSETS:
  Investment in Associated Company           (32,171)               -          (32,171)         32,171                -
  Deferred Charges                               366              143              509               -              509
  Fair Value of Derivative
   Financial Instruments                      31,981            4,432           36,413               -           36,413
  Notes Receivable - Intercompany            253,005                -          253,005        (253,005)               -
  Other Assets                                 2,068                -            2,068               -            2,068
                                       --------------   --------------  ---------------  --------------   --------------
                                             255,249            4,575          259,824        (220,834)          38,990
                                       --------------   --------------  ---------------  --------------   --------------
TOTAL ASSETS                             $ 1,197,528        $ 270,691      $ 1,468,219      $ (237,064)     $ 1,231,155
                                       ==============   ==============  ===============  ==============   ==============

CAPITALIZATION & LIABILITIES

CAPITALIZATION:
  Common Stock                           $       500        $       -      $       500      $        -      $       500
  Paid - in - Capital                        104,035           78,445          182,480         (78,445)         104,035
  Earnings Reinvested in the Business        (22,012)         (91,382)        (113,394)         91,382          (22,012)
                                       --------------   --------------  ---------------  --------------   --------------
  Total Common Shareholder
    Equity Before Items of
    Other Comprehensive Income                82,523          (12,937)          69,586          12,937           82,523
  Accumulated Other
    Comprehensive Loss                          (779)         (19,234)         (20,013)         19,234             (779)
                                       --------------   --------------  ---------------  --------------   --------------
  Total Comprehensive Shareholders'
    Equity                                    81,744          (32,171)          49,573          32,171           81,744

  Long-Term Debt, Net of Current
  Portion                                          -                -                -               -                -
  Notes Payable-Intercompany                 620,000          253,005          873,005        (253,005)         620,000
                                       --------------   --------------  ---------------  --------------   --------------

  Total Capitalization                       701,744          220,834          922,578        (220,834)         701,744
                                       --------------   --------------  ---------------  --------------   --------------

CURRENT AND ACCRUED LIABILITIES:
  Current Portion of Long-Term Debt                -                -                -               -                -
  Notes Payable to Banks and
    Commercial Paper                               -           15,675           15,675               -           15,675
  Accounts Payable                            42,875           15,922           58,797               -           58,797
  Notes Payable - Intercompany               291,900                -          291,900               -          291,900
  Accounts Payable - Intercompany             19,355           16,230           35,585         (16,230)          19,355
  Dividends Payable - Intercompany             2,000                -            2,000               -            2,000
  Other Accruals and Current
    Liabilities                                 (477)             (48)            (525)              -             (525)
                                       --------------   --------------  ---------------  --------------   --------------
                                             355,653           47,779          403,432         (16,230)         387,202
                                       --------------   --------------  ---------------  --------------   --------------
DEFERRED CREDITS:
  Accumulated Deferred Income Taxes          136,228            2,047          138,275               -          138,275
  Other Deferred Credits                       3,903               31            3,934               -            3,934
                                       --------------   --------------  ---------------  --------------   --------------
                                             140,131            2,078          142,209               -          142,209
                                       --------------   --------------  ---------------  --------------   --------------

TOTAL CAPITALIZATION & LIABILITIES       $ 1,197,528        $ 270,691      $ 1,468,219      $ (237,064)     $ 1,231,155
                                       ==============   ==============  ===============  ==============   ==============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                             SENECA RESOURCES CORPORATION
                                           CONSOLIDATING STATEMENT OF INCOME
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                          Seneca          National                                        Consolidated
                                         Resources          Fuel         Total Before                      Seneca and
                                        Corporation      Exploration     Eliminations    Eliminations      Subsidiary
                                       --------------   --------------  ---------------  --------------   --------------

OPERATING REVENUE:                         $ 335,989        $  73,967       $  409,956        $      -        $ 409,956
                                       --------------   --------------  ---------------  --------------   --------------
OPERATING EXPENSE:
  Purchased Gas                               44,954                -           44,954               -           44,954
  Operation                                   50,769           27,408           78,177               -           78,177
  Maintenance                                      -                -                -               -                -
  Property, Franchise & Other Taxes            4,771            8,264           13,035               -           13,035
  Impairment of Oil & Gas Producing
    Properties                                     -          180,781          180,781               -          180,781
  Depreciation, Depletion and
    Amortization                              78,998           20,247           99,245               -           99,245
  Income Taxes                                40,979          (74,197)         (33,218)              -          (33,218)
                                       --------------   --------------  ---------------  --------------   --------------
                                             220,471          162,503          382,974               -          382,974
                                       --------------   --------------  ---------------  --------------   --------------
  Operating Income (Loss)                    115,518          (88,536)          26,982               -           26,982
                                       --------------   --------------  ---------------  --------------   --------------

OTHER INCOME:
  Unremitted Earnings/(Loss) of
    Subsidiary                               (97,773)               -          (97,773)         97,773                -
  Interest - Intercompany                     10,695                -           10,695          (9,217)           1,478
  Other                                          977              544            1,521               -            1,521
                                       --------------   --------------  ---------------  --------------   --------------
                                             (86,101)             544          (85,557)         88,556            2,999
                                       --------------   --------------  ---------------  --------------   --------------

  Income (Loss) Before
    Interest Charges and
    Minority Interest in
    Foreign Subsidiary                        29,417          (87,992)         (58,575)         88,556           29,981
                                       --------------   --------------  ---------------  --------------   --------------

INTEREST CHARGES:
  Interest on Long-Term Debt                      55                -               55               -               55
  Interest - Intercompany                     56,327            9,217           65,544          (9,217)          56,327
  Other Interest                                  56              564              620               -              620
                                       --------------   --------------  ---------------  --------------   --------------
                                              56,438            9,781           66,219          (9,217)          57,002
                                       --------------   --------------  ---------------  --------------   --------------

  Net Income (Loss) Available
    for Common Stock                       $ (27,021)       $ (97,773)      $ (124,794)       $ 97,773        $ (27,021)
                                       ==============   ==============  ===============  ==============   ==============

See Notes to  Consolidated  Financial  Statements  included  in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 2001,
incorporated herein by reference.

                                             SENECA RESOURCES CORPORATION
                            CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                          Seneca          National                                        Consolidated
EARNINGS REINVESTED                      Resources          Fuel         Total Before                      Seneca and
IN THE BUSINESS                         Corporation      Exploration     Eliminations    Eliminations      Subsidiary
                                       --------------   --------------  ---------------  --------------   --------------

Balance at Beginning of Year               $  13,009        $   6,391       $   19,400        $ (6,391)       $  13,009

Net Income (Loss) Available
for Common Stock                             (27,021)         (97,773)        (124,794)         97,773          (27,021)

Dividends on Common Stock                     (8,000)               -           (8,000)              -           (8,000)
                                       --------------   --------------  ---------------  --------------   --------------

Balance at End of Year                     $ (22,012)       $ (91,382)      $ (113,394)       $ 91,382        $ (22,012)
                                       ==============   ==============  ===============  ==============   ==============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                            SENECA RESOURCES CORPORATION
                                       CONSOLIDATING STATEMENT OF CASH FLOWS
                                    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                             Seneca        National                                     Consolidated
                                           Resources         Fuel        Total Before                    Seneca and
                                          Corporation     Exploration    Eliminations   Eliminations     Subsidiary
                                          -------------  --------------  -------------  -------------   -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                            $ (27,021)      $ (97,773)    $ (124,794)      $ 97,773       $ (27,021)
Adjustments to Reconcile Net Income
  to Net Cash Provided by Operating
  Activities:
  Unremitted (Earnings)/Loss of
    Subsidiary                                  97,773               -         97,773        (97,773)              -
  Impairment of Oil & Gas Producing
    Properties                                       -         180,781        180,781              -         180,781
  Depreciation, Depletion &
    Amortization                                78,998          20,248         99,246              -          99,246
  Deferred Income Taxes                         30,566         (74,911)       (44,345)             -         (44,345)
  Other                                           (797)              -           (797)             -            (797)

Change in:
  Receivables and Unbilled Utility
    Revenue                                      6,828           4,296         11,124              -          11,124
  Accounts Receivable - Intercompany            (9,180)              -         (9,180)         9,948             768
  Materials and Supplies                          (167)            803            636              -             636
  Prepayments                                    5,373            (654)         4,719              -           4,719
  Accounts Payable                              33,655          (2,203)        31,452            101          31,553
  Accounts Payable - Intercompany                4,169          10,049         14,218        (10,049)          4,169
  Other Accruals and Current Liabilities         3,936            (337)         3,599              -           3,599
  Other Assets                                   2,374          (1,221)         1,153              -           1,153
  Other Liabilities                            (14,931)         (1,233)       (16,164)             -         (16,164)
                                          -------------  --------------  -------------  -------------   -------------

Net Cash Provided by
Operating Activities                           211,576          37,845        249,421              -         249,421
                                          -------------  --------------  -------------  -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital Expenditures                        (149,466)        (56,834)      (206,300)             -        (206,300)
  Investment in Subsidiaries,
    Net of Cash Acquired                             -         (90,567)       (90,567)             -         (90,567)
  Change in Notes
    Receivable - Intercompany                  (99,919)              -        (99,919)        99,919               -
  Investment in Associated Company                   -               -              -              -               -
  Other                                         (6,442)          1,218         (5,224)             -          (5,224)
                                          -------------  --------------  -------------  -------------   -------------

  Net Cash Used in Investing
    Activities                                (255,827)       (146,183)      (402,010)        99,919        (302,091)
                                          -------------  --------------  -------------  -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in Notes Payable - Intercompany        52,300          99,919        152,219        (99,919)         52,300
  Change in Notes Payable to Banks and
    Commercial Paper                                 -           2,912          2,912              -           2,912
  Reduction of Long-Term Debt                   (1,747)              -         (1,747)             -          (1,747)
  Dividends Paid on Common Stock                (8,000)              -         (8,000)             -          (8,000)
  Capital Contribution                               -               -              -              -               -
                                          -------------  --------------  -------------  -------------   -------------

  Net Cash Provided by Financing
    Activities                                  42,553         102,831        145,384        (99,919)         45,465
                                          -------------  --------------  -------------  -------------   -------------

Effect of Exchange Rates on Cash                     -            (853)          (853)             -            (853)
                                          -------------  --------------  -------------  -------------   -------------

Net Increase (Decrease) in Cash
and Temporary Cash Investments                  (1,698)         (6,360)        (8,058)             -          (8,058)

Cash and Temporary Cash Investments
at Beginning of Period                           1,912           6,703          8,615              -           8,615
                                          -------------  --------------  -------------  -------------   -------------

Cash and Temporary Cash Investments
at End of Period                             $     214       $     343     $      557      $       -       $     557
                                          =============  ==============  =============  =============   =============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                             SENECA RESOURCES CORPORATION
                                    CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                          Seneca          National                                        Consolidated
                                         Resources          Fuel         Total Before                      Seneca and
                                        Corporation      Exploration     Eliminations    Eliminations      Subsidiary
                                       --------------   --------------  ---------------  --------------   --------------

Net Income (Loss) Available
  for Common Stock                       $ (27,021)       $ (97,773)      $ (124,794)       $ 97,773        $ (27,021)
                                         ----------       ----------      -----------       ---------       ----------

Other Comprehensive Income
  (Loss), Before Tax:
  Foreign Currency
    Translation Adjustment                 (14,850)         (14,850)         (29,700)         14,850          (14,850)
  Unrealized Gain on Derivative
    Financial Instruments During
    the Period                              59,986           17,564           77,550         (17,564)          59,986
  Reclassification Adjustment for
    Realized Losses on Derivative
    Financial Instruments in
    Net Income                              82,859           13,741           96,600         (13,741)          82,859
                                         ----------       ----------      -----------       ---------       ----------
Other Comprehensive Income
  (Loss), Before Tax                       127,995           16,455          144,450         (16,455)         127,995
  Income Tax Expense Related to
    Unrealized Gain on Derivative
    Financial Instruments During
    the Period                              23,586            7,532           31,118          (7,532)          23,586
  Reclassification Adjustment for
    Income Tax Benefit on Losses
    on Derivative Financial
    Instruments Realized in
    Net Income                              31,955            5,746           37,701          (5,746)          31,955
                                         ----------       ----------      -----------       ---------       ----------

Income Taxes - Net                          55,541           13,278           68,819         (13,278)          55,541
                                         ----------       ----------      -----------       ---------       ----------
Other Comprehensive Income
  (Loss), Before Cumulative
  Effect, Net of Tax                        72,454            3,177           75,631          (3,177)          72,454

Cumulative Effect of
  Change in Accounting                     (68,902)         (18,080)         (86,982)         18,080          (68,902)
                                         ----------       ----------      -----------       ---------       ----------
Other Comprehensive Income
  (Loss), After Cumulative
   Effect, Net of Tax                        3,552          (14,903)         (11,351)         14,903            3,552
                                         ----------       ----------      -----------       ---------       ----------
Comprehensive Income (Loss)              $ (23,469)       $(112,676)      $ (136,145)       $112,676        $ (23,469)
                                         ==========       ==========      ===========       ========        ==========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                         NATIONAL FUEL EXPLORATION CORPORATION
                                              CONSOLIDATING BALANCE SHEET
                                                 AT SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                        National Fuel                                     Consolidated
                                       National Fuel     Exploration                                      National Fuel
                                        Exploration      Acquisition     Total Before                      Exploration
                                        Corporation      Corporation     Eliminations    Eliminations      Corporation
                                       --------------   --------------  ---------------  --------------   --------------

ASSETS

PROPERTY, PLANT & EQUIPMENT                $ 296,377        $ 175,421        $ 471,798       $       -        $ 471,798
Less: Accumulated  DD&A                       76,800          146,007          222,807          (4,373)         218,434
                                       --------------   --------------  ---------------  --------------   --------------
                                             219,577           29,414          248,991           4,373          253,364
                                       --------------   --------------  ---------------  --------------   --------------
CURRENT ASSETS:
  Cash and Temporary Cash Investments             65              278              343               -              343
  Allowance for Uncollectible Accounts             -                -                -               -                -
  Notes Receivable - Intercompany                  -                -                -               -                -
  Accounts Receivable                          6,918            2,052            8,970               -            8,970
  Accounts Receivable - Intercompany           3,002                -            3,002          (3,002)               -
  Materials and Supplies                       2,646               26            2,672               -            2,672
  Prepayments                                    414              353              767               -              767
                                       --------------   --------------  ---------------  --------------   --------------
                                              13,045            2,709           15,754          (3,002)          12,752
                                       --------------   --------------  ---------------  --------------   --------------
OTHER ASSETS:
  Investment in Associated Company           (75,231)               -          (75,231)         75,231                -
  Deferred Charges                               143                -              143               -              143
  Fair Value of Derivative
    Financial Instruments                       (262)           4,694            4,432               -            4,432
  Notes Receivable - Intercompany             99,919                -           99,919         (99,919)               -
  Other Assets                                     -                -                -               -                -
                                       --------------   --------------  ---------------  --------------   --------------
                                              24,569            4,694           29,263         (24,688)           4,575
                                       --------------   --------------  ---------------  --------------   --------------
TOTAL ASSETS                               $ 257,191        $  36,817        $ 294,008       $ (23,317)       $ 270,691
                                       ==============   ==============  ===============  ==============   ==============

CAPITALIZATION & LIABILITIES

CAPITALIZATION:
  Common Stock                             $       -        $       -        $       -       $       -        $       -
  Paid - in - Capital                         78,445                -           78,445               -           78,445
  Earnings Reinvested in the Business        (95,464)         (74,368)        (169,832)         78,450          (91,382)
                                       --------------   --------------  ---------------  -------------    --------------
  Total Common Shareholder
    Equity Before Items of
    Other Comprehensive
    Income                                   (17,019)         (74,368)         (91,387)         78,450          (12,937)
  Accumulated Other
    Comprehensive Income                     (19,525)            (863)         (20,388)          1,154          (19,234)
                                       --------------   --------------  ---------------  --------------   --------------
  Total Comprehensive Shareholders'
    Equity                                   (36,544)         (75,231)        (111,775)         79,604          (32,171)

  Long-Term Debt, Net of Current
    Portion                                        -                -                -               -                -
  Notes Payable-Intercompany                 253,005           99,919          352,924         (99,919)         253,005
                                       --------------   --------------  ---------------  --------------   --------------

  Total Capitalization                       216,461           24,688          241,149         (20,315)         220,834
                                       --------------   --------------  ---------------  --------------   --------------

CURRENT AND ACCRUED LIABILITIES:
  Current Portion of Long-Term Debt                -                -                -               -                -
  Notes Payable to Banks and
    Commercial Paper                          11,980            3,695           15,675               -           15,675
  Accounts Payable                            10,551            5,371           15,922               -           15,922
  Notes Payable - Intercompany                     -                -                -               -                -
  Accounts Payable - Intercompany             16,230            3,002           19,232          (3,002)          16,230
  Dividends Payable - Intercompany                 -                -                -               -                -
  Other Accruals and Current
    Liabilities                                 (109)              61              (48)              -              (48)
                                       --------------   --------------  ---------------  --------------   --------------
                                              38,652           12,129           50,781          (3,002)          47,779
                                       --------------   --------------  ---------------  --------------   --------------
DEFERRED CREDITS:
  Accumulated Deferred Income Taxes            2,047                -            2,047               -            2,047
  Other Deferred Credits                          31                -               31               -               31
                                       --------------   --------------  ---------------  --------------   --------------
                                               2,078                -            2,078               -            2,078
                                       --------------   --------------  ---------------  --------------   --------------

TOTAL CAPITALIZATION & LIABILITIES          $257,191        $  36,817        $ 294,008       $ (23,317)       $ 270,691
                                       ==============   ==============  ===============  ==============   ==============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

Note:  The financial statements of National Fuel Exploration Acquisition Corp.
       (presented on pages 57 through 61) represent the financial results of
       its wholly-owned subsidiary, Player Resources Ltd. (Player).  National
       Fuel Exploration Acquisition Corp. has no operations other than serving
       as the holding company for the stock of Player.

                                         NATIONAL FUEL EXPLORATION CORPORATION
                                           CONSOLIDATING STATEMENT OF INCOME
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                        National Fuel                                     Consolidated
                                       National Fuel     Exploration                                      National Fuel
                                        Exploration      Acquisition     Total Before                      Exploration
                                        Corporation      Corporation     Eliminations    Eliminations      Corporation
                                       --------------   --------------  ---------------  --------------   --------------

OPERATING REVENUE:                         $  67,187        $   6,780       $   73,967        $      -        $  73,967
                                       --------------   --------------    -------------  --------------   --------------

OPERATING EXPENSE:
  Purchased Gas                                    -                -                -               -                -
  Operation                                   24,962            2,446           27,408               -           27,408
  Maintenance                                      -                -                -               -                -
  Property, Franchise & Other Taxes            8,264                -            8,264               -            8,264
  Impairment of Oil & Gas Producing
    Properties                                52,117          131,735          183,852          (3,071)         180,781
  Depreciation, Depletion and
    Amortization                              16,116            5,470           21,586          (1,339)          20,247
  Income Taxes                               (15,842)         (58,683)         (74,525)            328          (74,197)
                                       --------------   --------------  ---------------  --------------   --------------
                                              85,617           80,968          166,585          (4,082)         162,503
                                       --------------   --------------  ---------------  --------------   --------------
  Operating Income (Loss)                    (18,430)         (74,188)         (92,618)          4,082          (88,536)
                                       --------------   --------------  ---------------  --------------   --------------

OTHER INCOME:
  Unremitted Loss of
    Subsidiary                               (74,368)               -          (74,368)         74,368                -
  Interest - Intercompany                          -                -                -               -                -
  Other                                          544                -              544               -              544
                                       --------------   --------------  ---------------  --------------   --------------
                                             (73,824)               -          (73,824)         74,368              544
                                       --------------   --------------  ---------------  --------------   --------------

  Income (Loss) Before
    Interest Charges and
    Minority Interest in
    Foreign Subsidiary                       (92,254)         (74,188)        (166,442)         78,450          (87,992)
                                       --------------   --------------  ---------------  --------------   --------------

INTEREST CHARGES:
  Interest on Long-Term Debt                       -                -                -               -                -
  Interest - Intercompany                      9,217                -            9,217               -            9,217
  Other Interest                                 384              180              564               -              564
                                       --------------   --------------  ---------------  --------------   --------------
                                               9,601              180            9,781               -            9,781
                                       --------------   --------------  ---------------  --------------   --------------

  Net Income (Loss) Available
    for Common Stock                       $(101,855)       $ (74,368)      $ (176,223)       $ 78,450        $ (97,773)
                                       ==============   ==============  ===============  ==============   ==============

See Notes to  Consolidated  Financial  Statements  included  in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 2001,
incorporated herein by reference.

                                         NATIONAL FUEL EXPLORATION CORPORATION
                            CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                        National Fuel                                     Consolidated
                                       National Fuel     Exploration                                      National Fuel
EARNINGS REINVESTED                     Exploration      Acquisition     Total Before                      Exploration
IN THE BUSINESS                         Corporation      Corporation     Eliminations    Eliminations      Corporation
                                       --------------   --------------  ---------------  --------------   --------------

Balance at Beginning of Year               $   6,391        $       -        $   6,391         $     -        $   6,391

Net Income (Loss) Available
for Common Stock                            (101,855)         (74,368)        (176,223)         78,450          (97,773)

Dividends on Common Stock                          -                -                -               -                -
                                       --------------   --------------  ---------------  --------------   --------------

Balance at End of Year                     $ (95,464)       $ (74,368)       $(169,832)        $78,450        $ (91,382)
                                       ==============   ==============  ===============  ==============   ==============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                       NATIONAL FUEL EXPLORATION CORPORATION
                                       CONSOLIDATING STATEMENT OF CASH FLOWS
                                    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                                         National Fuel                                  Consolidated
                                          National Fuel   Exploration                                   National Fuel
                                          Exploration     Acquisition    Total Before                   Exploration
                                          Corporation     Corporation    Eliminations   Eliminations    Corporation
                                          -------------  --------------  -------------  -------------   -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                            $(101,855)      $ (74,368)    $ (176,223)      $ 78,450       $ (97,773)
Adjustments to Reconcile Net Income
  to Net Cash Provided by Operating
  Activities:
  Unremitted Loss of Subsidiary                 74,368               -         74,368        (74,368)              -
  Impairment of Oil & Gas Producing
    Properties                                  52,117         131,735        183,852         (3,071)        180,781
  Depreciation, Depletion &
    Amortization                                16,116           5,470         21,586         (1,339)         20,247
  Deferred Income Taxes                        (16,529)        (58,710)       (75,239)           328         (74,911)
  Other                                              -               -              -              -               -

Change in:
  Receivables and Unbilled Utility
    Revenue                                       (383)          4,679          4,296              -           4,296
  Accounts Receivable - Intercompany            (3,089)              -         (3,089)         3,089               -
  Materials and Supplies                           803               -            803              -             803
  Prepayments                                     (290)           (364)          (654)             -            (654)
  Accounts Payable                               2,703          (4,906)        (2,203)             -          (2,203)
  Accounts Payable - Intercompany               10,049           3,089         13,138         (3,089)         10,049
  Other Accruals and Current Liabilities          (400)             63           (337)             -            (337)
  Other Assets                                      18          (1,239)        (1,221)             -          (1,221)
  Other Liabilities                             (1,233)              -         (1,233)             -          (1,233)
                                          -------------  --------------  -------------  -------------   -------------

Net Cash Provided by
Operating Activities                            32,395           5,449         37,844              -          37,844
                                          -------------  --------------  -------------  -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital Expenditures                         (52,607)         (4,227)       (56,834)             -         (56,834)
  Investment in Subsidiaries,
    Net of Cash Acquired                             -         (90,567)       (90,567)             -         (90,567)
  Change in Notes
    Receivable - Intercompany                  (99,919)              -        (99,919)        99,919               -
  Investment in Associated Company                   -               -              -              -               -
  Other                                            904             314          1,218              -           1,218
                                          -------------  --------------  -------------  -------------   -------------

  Net Cash Used in Investing
    Activities                                (151,622)        (94,480)      (246,102)        99,919        (146,183)
                                          -------------  --------------  -------------  -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in Notes Payable - Intercompany        99,919          99,919        199,838        (99,919)         99,919
  Change in Notes Payable to Banks and
    Commercial Paper                            12,326          (9,414)         2,912              -           2,912
  Reduction of Long-Term Debt                        -               -              -              -               -
  Dividends Paid on Common Stock                     -               -              -              -               -
  Capital Contribution                               -               -              -              -               -
                                          -------------  --------------  -------------  -------------   -------------

  Net Cash Provided by Financing
    Activities                                 112,245          90,505        202,750        (99,919)        102,831
                                          -------------  --------------  -------------  -------------   -------------

Effect of Exchange Rates on Cash                   344          (1,196)          (852)             -            (852)
                                          -------------  --------------  -------------  -------------   -------------

Net Increase (Decrease) in Cash
and Temporary Cash Investments                  (6,638)            278         (6,360)             -          (6,360)

Cash and Temporary Cash Investments
at Beginning of Period                           6,703               -          6,703              -           6,703
                                          -------------  --------------  -------------  -------------   -------------

Cash and Temporary Cash Investments
at End of Period                             $      65         $   278       $    343       $      -       $     343
                                          =============  ==============  =============  =============   =============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                         NATIONAL FUEL EXPLORATION CORPORATION
                                    CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                (THOUSANDS OF DOLLARS)

                                                        National Fuel                                     Consolidated
                                       National Fuel     Exploration                                      National Fuel
                                        Exploration      Acquisition     Total Before                      Exploration
                                        Corporation      Corporation     Eliminations    Eliminations      Corporation
                                       --------------   --------------  ---------------  --------------   --------------

Net Income (Loss) Available
  for Common Stock                         $(101,855)      $ (74,368)       $ (176,223)        $78,450        $ (97,773)
                                       --------------   -------------   ---------------  --------------   --------------
Other Comprehensive Income
  (Loss), Before Tax:
  Foreign Currency
    Translation Adjustment                   (14,850)         (2,856)          (17,706)          2,856          (14,850)
  Unrealized Gain on Derivative
    Financial Instruments During
    the Period                                17,273           3,489            20,762          (3,198)          17,564
  Reclassification Adjustment for
    Realized Losses on Derivative
    Financial Instruments in
    Net Income                                13,741               -            13,741               -           13,741
                                       --------------   -------------   ---------------  --------------   --------------
Other Comprehensive Income
  (Loss), Before Tax                          16,164             633            16,797            (342)          16,455
Income Tax Expense Related to
  Unrealized Gain on Derivative
  Financial Instruments During
  the Period                                   7,532           1,496             9,028          (1,496)           7,532
Reclassification Adjustment for
  Income Tax Benefit on Losses
  on Derivative Financial
  Instruments Realized in
  Net Income                                   5,746               -             5,746               -            5,746
                                       --------------   -------------   ---------------  --------------   --------------

Income Taxes - Net                            13,278           1,496            14,774          (1,496)          13,278
                                       --------------   -------------   ---------------  --------------   --------------
Other Comprehensive Income
  (Loss), Before Cumulative
  Effect, Net of Tax                           2,886            (863)            2,023           1,154            3,177

Cumulative Effect of
  Change in Accounting                       (18,080)              -           (18,080)              -          (18,080)
                                       --------------   -------------   ---------------  --------------   --------------

Other Comprehensive Income
  (Loss), After Cumulative
   Effect, Net of Tax                        (15,194)           (863)          (16,057)          1,154          (14,903)
                                       --------------   -------------   ---------------  --------------   --------------

Comprehensive Income (Loss)                $(117,049)      $ (75,231)       $ (192,280)        $79,604        $(112,676)
                                       ==============   =============   ===============  ==============   ==============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                 HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
                                            CONSOLIDATING BALANCE SHEET
                                               AT SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                    Horizon       Horizon
                                    Energy         Energy        Sceptre                                 Consolidated
                                  Development,    Holdings        Power      Total Before                Horizon and
                                     Inc.       (Consolidated)   Company     Eliminations  Eliminations  Subsidiaries
                                  ------------  -------------  ------------  ------------  ------------  ------------

ASSETS

PROPERTY, PLANT & EQUIPMENT         $     $ -      $ 271,073     $       -     $ 271,073    $        -     $ 271,073
  Less:  Accumulated DD&A                   -         92,824             -        92,824             -        92,824
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                            -        178,249             -       178,249             -       178,249
                                  ------------  -------------  ------------  ------------  ------------  ------------
CURRENT ASSETS:
  Cash and Temporary Cash Investments    (140)         5,938            11         5,809             -         5,809
  Notes Receivable - Intercompany         920              -             -           920          (120)          800
  Allowance for Uncollectible Accounts      -           (762)            -          (762)            -          (762)
  Accounts Receivable - Intercompany    2,819              -             -         2,819        (2,783)           36
  Accounts Receivable                       -          5,707            10         5,717             -         5,717
  Unbilled Utility Revenue                  -          3,840             -         3,840             -         3,840
  Materials and Supplies                    -          3,014             -         3,014             -         3,014
  Prepayments                               -             27             -            27             -            27
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                        3,599         17,764            21        21,384        (2,903)       18,481
                                  ------------  -------------  ------------  ------------  ------------  ------------
OTHER ASSETS:
  Investment in Associated Companies  116,440              -             -       116,440      (116,440)            -
  Other Assets                              -          9,590             -         9,590             -         9,590
  Notes Receivable - Intercompany           -              -             -             -             -             -
  Deferred Charges                         40              -             -            40             -            40
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                      116,480          9,590             -       126,070      (116,440)        9,630
                                  ------------  -------------  ------------  ------------  ------------  ------------
TOTAL ASSETS                        $ 120,079      $ 205,603     $      21     $ 325,703    $ (119,343)    $ 206,360
                                  ============  =============  ============  ============  ============  ============

CAPITALIZATION & LIABILITIES

CAPITALIZATION:
  Common Stock                      $       5      $       2      $ 11,524     $  11,531    $  (11,526)    $     $ 5
  Paid - in - Capital                  38,246        115,056             -       153,302      (115,056)       38,246
  Capital Contribution from Horizon         -              -             -             -             -             -
  Earnings Reinvested in the Business  (9,143)        17,044        (7,576)          325        (9,468)       (9,143)
                                  ------------  -------------  ------------  ------------  ------------  ------------
  Total Common Shareholder Equity
    Before Items of Other
    Comprehensive Income               29,108        132,102         3,948       165,158      (136,050)       29,108
  Accumulated Other Comprehensive
    Income                            (20,253)       (19,610)            -       (39,863)       19,610       (20,253)
                                  ------------  -------------  ------------  ------------  ------------  ------------
Total Comprehensive Shareholders'
  Equity                                8,855        112,492         3,948       125,295      (116,440)        8,855
                                  ------------  -------------  ------------  ------------  ------------  ------------
  Long-Term Debt, Net of Current
    Portion                                 -         22,475             -        22,475             -        22,475
  Notes Payable - Intercompany         90,000              -             -        90,000             -        90,000
                                  ------------  -------------  ------------  ------------  ------------  ------------

Total Capitalization                   98,855        134,967         3,948       237,770      (116,440)      121,330
                                  ------------  -------------  ------------  ------------  ------------  ------------
  Minority Interest in Foreign
    Subsidiaries                            -         22,324             -        22,324             -        22,324
                                  ------------  -------------  ------------  ------------  ------------  ------------

CURRENT AND ACCRUED LIABILITIES:
  Notes Payable - Intercompany         13,700            120             -        13,820          (120)       13,700
  Notes Payable to Banks                    -         14,098             -        14,098             -        14,098
  Current Portion of Long-Term Debt         -          9,002             -         9,002             -         9,002
  Accounts Payable                        126          8,990            15         9,131          (277)        8,854
  Accounts Payable - Intercompany       3,844          2,506             -         6,350        (2,506)        3,844
  Other Accruals and Current
    Liabilities                         3,796          2,965        (3,923)        2,838             -         2,838
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                       21,466         37,681        (3,908)       55,239        (2,903)       52,336
                                  ------------  -------------  ------------  ------------  ------------  ------------
DEFERRED CREDITS:
  Accumulated Deferred Income Taxes      (718)         9,961           (20)        9,223             -         9,223
  Fair Value of Deriv. Financial
    Instruments                             -            581             -           581             -           581
  Other Deferred Credits                  476             89             1           566             -           566
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                         (242)        10,631           (19)       10,370             -        10,370
                                  ------------  -------------  ------------  ------------  ------------  ------------

TOTAL CAPITALIZATION & LIABILITIES  $ 120,079      $ 205,603      $     21     $ 325,703    $ (119,343)    $ 206,360
                                  ============  =============  ============  ============  ============  ============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                 HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
                                         CONSOLIDATING STATEMENT OF INCOME
                                    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                    Horizon
                                    Energy      Horizon Energy   Sceptre                                 Consolidated
                                  Development,    Holdings        Power      Total Before  Eliminations  Horizon and
                                     Inc.       (Consolidated)   Company     Eliminations    (Dr) Cr     Subsidiaries
                                  ------------  -------------  ------------  ------------  ------------  ------------

OPERATING REVENUE:                   $      -       $ 97,937           $ -      $ 97,937      $    (27)     $ 97,910
                                  ------------  -------------  ------------  ------------  ------------  ------------

OPERATING EXPENSE:
Fuel Used in Heat and
  Electric Generation                       -         53,334             -        53,334             -        53,334
Operation                               3,738         19,403             -        23,141           (26)       23,115
Maintenance                                 -             38             -            38             -            38
Property, Franchise & Other Taxes          15          2,169             -         2,184             -         2,184
Depreciation, Depletion and
  Amortization                             25         12,609             -        12,634             -        12,634
Income Taxes                           (3,416)         3,669             -           253             -           253
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                          362         91,222             -        91,584           (26)       91,558
                                  ------------  -------------  ------------  ------------  ------------  ------------
Operating Income (Loss)                  (362)         6,715             -         6,353            (1)        6,352
                                  ------------  -------------  ------------  ------------  ------------  ------------

OTHER INCOME:
Unremitted Earnings of
  Subsidiaries                          3,287              -             -         3,287        (3,287)            -
Interest - Intercompany                    24              -             -            24            (1)           23
Other                                     409          1,482             -         1,891             -         1,891
                                  ------------  -------------  ------------  ------------  ------------  ------------

                                        3,720          1,482             -         5,202        (3,288)        1,914
                                  ------------  -------------  ------------  ------------  ------------  ------------

Income (Loss) Before
  Interest Charges and
  and Minority Interest in
  Foreign Subsidiaries                  3,358          8,197             -        11,555        (3,289)        8,266
                                  ------------  -------------  ------------  ------------  ------------  ------------

INTEREST CHARGES:
Interest on Long-Term Debt                  -          3,565             -         3,565             -         3,565
Interest-Intercompany                   5,738              1             -         5,739            (1)        5,738
Other Interest                            661              1             -           662             -           662
                                  ------------  -------------  ------------  ------------  ------------  ------------
                                        6,399          3,567             -         9,966            (1)        9,965
                                  ------------  -------------  ------------  ------------  ------------  ------------
Minority Interest in
  Foreign Subsidiaries                      -         (1,342)            -        (1,342)            -        (1,342)
                                  ------------  -------------  ------------  ------------  ------------  ------------

Net Income (Loss) Available
  for Common Stock                   $ (3,041)      $  3,288           $ -      $    247      $ (3,288)     $ (3,041)
                                  ============  =============  ============  ============  ============  ============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                 HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
                           CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                                    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                    Horizon
                                    Energy      Horizon Energy   Sceptre                                 Consolidated
EARNINGS REINVESTED               Development,    Holdings        Power      Total Before  Eliminations  Horizon and
IN THE BUSINESS                      Inc.       (Consolidated)   Company     Eliminations    (Dr) Cr     Subsidiaries
                                  ------------  -------------  ------------  ------------  ------------  ------------

Balance at Beginning of Year         $ (6,102)      $ 13,757      $ (7,576)        $  79      $ (6,181)     $ (6,102)

Net Income (Loss) Available
  for Common Stock                     (3,041)         3,288             -           247        (3,288)       (3,041)

Dividends on Common
  Stock                                     -              -             -             -             -             -
                                  ------------  -------------  ------------  ------------  ------------  ------------

Balance at End of Year               $ (9,143)      $ 17,045      $ (7,576)        $ 326      $ (9,469)     $ (9,143)
                                  ============  =============  ============  ============  ============  ============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                 HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
                                       CONSOLIDATING STATEMENT OF CASH FLOWS
                                    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                         Horizon
                                         Energy      Horizon Energy  Sceptre     Total Before                Consolidated
                                       Development,   Holdings        Power      Eliminations  Eliminations  Horizon and
                                          Inc.       (Consolidated)  Company     & Adjustments & Adjustments Subsidiaries
                                       ------------  --------------------------  ------------  ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                        $ (3,041)      $ 3,288          $  -       $   247      $ (3,288)     $ (3,041)
Adjustments to Reconcile Net Income
  to Net Cash Provided by Operating
  Activities:
Unremitted Earnings of Subsidiaries        (3,287)            -             -        (3,287)        3,287             -
Depreciation, Depletion &
  Amortization                                 25        12,609             -        12,634             -        12,634
Deferred Income Taxes                          22           188             -           210             -           210
Minority Interest in Foreign
  Subsidiaries                                  -         1,342             -         1,342             -         1,342
Other                                         130         1,084             -         1,214             -         1,214

Change in:
Accounts Receivable - Intercompany           (263)            -             -          (263)          227           (36)
Receivables and Unbilled Utility
  Revenue                                       -          (402)            -          (402)            -          (402)
Material and Supplies                           -           932             -           932             -           932
Prepayments                                     -            33             -            33             -            33
Accounts Payable                               15          (157)            -          (142)         (227)         (369)
Accounts Payable - Intercompany               466             -             -           466             -           466
Other Accruals and Current
  Liabilities                               2,062         3,800             -         5,862             -         5,862
Other Assets                                    5        (1,350)            -        (1,345)            -        (1,345)
Other Liabilities                            (403)           87             -          (316)            -          (316)
                                      ------------  ------------  ------------  ------------  ------------  ------------

Net Cash Provided by (Used in)
Operations                                 (4,269)       21,454             -        17,185            (1)       17,184
                                      ------------  ------------  ------------  ------------  ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures                            -       (15,587)            -       (15,587)            -       (15,587)
Investment in Associated Companies              -             -             -             -             -             -
Other                                           -         7,007             -         7,007             -         7,007
                                      ------------  ------------  ------------  ------------  ------------  ------------
Net Cash Provided by (Used In)
Investing  Activities                           -        (8,580)            -        (8,580)            -        (8,580)
                                      ------------  ------------  ------------  ------------  ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in Notes Payable to Banks                -        (5,009)            -        (5,009)            -        (5,009)
Change in Notes Payable - Intercompany      4,080           120             -         4,200             -         4,200
Return of Capital Contribution                  -             -             -             -             -             -
Net Proceeds from Issuance of
  Long-Term Debt                                -        12,927             -        12,927             -        12,927
Reduction of Long-Term Debt                     -       (20,724)            -       (20,724)            -       (20,724)
                                      ------------  ------------  ------------  ------------  ------------  ------------

Net Cash Provided by (Used in)
  Financing Activities                      4,080       (12,686)            -        (8,606)            -        (8,606)
                                      ------------  ------------  ------------  ------------  ------------  ------------

Effect of Exchange Rates on Cash                -           208             -           208             -           208
                                      ------------  ------------  ------------  ------------  ------------  ------------

Net Increase (Decrease) in Cash
  and Temporary Cash Investments             (189)          396             -           207            (1)          206

Cash and Temporary Cash Investments
  of Beginning of Period                       49         5,542            11         5,602             -         5,602
                                      ------------  ------------  ------------  ------------  ------------  ------------

Cash and Temporary Cash
  Investments at End of Year             $   (140)      $ 5,938          $ 11       $ 5,809      $     (1)     $  5,808
                                      ============  ============  ============  ============  ============  ============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                 HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
                                  CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                                    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                               (THOUSANDS OF DOLLARS)

                                    Horizon
                                    Energy      Horizon Energy   Sceptre     Total Before                Consolidated
                                  Development,    Holdings        Power      Eliminations  Eliminations  Horizon and
                                     Inc.       (Consolidated)   Company     & Adjustments   (Dr) Cr     Subsidiaries
                                  ------------  -------------  ------------  ------------  ------------  ------------

Net Income (Loss) Available for
  Common Stock                       $ (3,041)      $  3,288           $ -      $    247     $  (3,288)     $ (3,041)
                                  ------------  -------------  ------------  ------------  ------------  ------------

Other Comprehensive Income (Loss) :
  Foreign Currency Translation
    Adjustment                          7,692          7,692             -        15,384        (7,692)        7,692
  Unrealized Gain / (Loss) on
    Derivative Financial
    Instruments During
    the Period                           (139)          (139)            -          (278)          139          (139)
  Reclassification Adjustment
    for Realized (Gains)/Losses on
    Derivative Financial Instruments
    in Net Income                         796            796             -         1,592          (796)          796
                                  ------------  -------------  ------------  ------------  ------------  ------------
Other Comprehensive Income (Loss),
  Before Tax                            8,349          8,349             -        16,698        (8,349)        8,349

  Income Tax Expense/(Benefit)
    Related to Unrealized Gain/
    (Loss) on Derivative
    Financial Instruments
    During the Period                     (43)           (43)            -           (86)           43           (43)
  Reclassification Adjustment
    for Income Tax Benefit/(Expense)
    on Derivative Financial
    Instruments in Net Income             247            247             -           494          (247)          247
                                  ------------  -------------  ------------  ------------  ------------  ------------
Income Taxes - Net                        204            204             -           408          (204)          204
                                  ------------  -------------  ------------  ------------  ------------  ------------
Other Comprehensive Income (Loss),
  Before Cumulative Effect,
  Net of Tax                            8,145          8,145             -        16,290        (8,145)        8,145
                                  ------------  -------------  ------------  ------------  ------------  ------------

Cumulative Effect of
  Change in Accounting                   (793)          (793)            -        (1,586)          793          (793)
                                  ------------  -------------  ------------  ------------  ------------  ------------

Other Comprehensive Income (Loss),
  After Cumulative Effect
  Net of Tax                            7,352          7,352             -        14,704        (7,352)        7,352
                                  ------------  -------------  ------------  ------------  ------------  ------------

Comprehensive Income (Loss)          $  4,311       $ 10,640           $ -      $ 14,951     $ (10,640)     $  4,311
                                  ============  =============  ============  ============  ============  ============

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                     HORIZON ENERGY HOLDINGS
                                   CONSOLIDATING BALANCE SHEET
                                      AT SEPTEMBER 30, 2001
                                      (THOUSANDS OF DOLLARS)

                                                                                             Consolidated
                                  Horizon     Horizon Energy                                    Horizon
                                   Energy     Development B.V.  Total Before                 Energy Holdings
                                  Holdings    (Consolidated)    Eliminations   Eliminations  and Subsidiaries
                                 -----------  --------------    ------------   -----------   ----------------

ASSETS

PROPERTY, PLANT & EQUIPMENT       $       -     $ 271,073        $ 271,073     $        -        $ 271,073
  Less:  Accumulated DD&A                 -        92,824           92,824              -           92,824
                                 -----------  ------------      -----------    -----------      -----------
                                          -       178,249          178,249              -          178,249
                                 -----------  ------------      -----------    -----------      -----------
CURRENT ASSETS:
  Cash and Temporary Cash Investments     -         5,938            5,938              -            5,938
  Notes Receivable - Intercompany         -             -                -              -                -
  Allowance for Uncollectible Accounts    -          (762)            (762)             -             (762)
  Accounts Receivable - Intercompany      -             -                -              -                -
  Accounts Receivable                     -         5,707            5,707              -            5,707
  Unbilled Utility Revenue                -         3,840            3,840              -            3,840
  Materials and Supplies                  -         3,014            3,014              -            3,014
  Prepayments                             -            27               27              -               27
                                 -----------  ------------      -----------    -----------      -----------
                                          -        17,764           17,764              -           17,764
                                 -----------  ------------      -----------    -----------      -----------
OTHER ASSETS:
  Investment in Associated
    Companies                       112,492             -          112,492       (112,492)               -
  Other Assets                            -         9,590            9,590              -            9,590
  Notes Receivable - Intercompany         -             -                -              -                -
  Deferred Charges                        -             -                -              -                -
                                 -----------  ------------      -----------    -----------      -----------
                                    112,492         9,590          122,082       (112,492)           9,590
                                 -----------  ------------      -----------    -----------      -----------
TOTAL ASSETS                      $ 112,492     $ 205,603        $ 318,095     $ (112,492)       $ 205,603
                                 ===========  ============      ===========    ===========      ===========

CAPITALIZATION & LIABILITIES

CAPITALIZATION:
  Common Stock                    $       2     $      29        $      31     $      (29)       $       2
  Paid - in - Capital               115,056       109,921          224,977       (109,921)         115,056
  Earnings Reinvested
    in the Business                  17,044        22,794           39,838        (22,794)          17,044
                                 -----------  ------------     ------------    -----------      -----------
  Total Common Shareholder
    Equity Before Items of
    Other Comprehensive Income      132,102       132,744          264,846       (132,744)         132,102
  Accumulated Other
    Comprehensive Income            (19,610)      (20,252)         (39,862)        20,252          (19,610)
                                 -----------  ------------      -----------    -----------      -----------
Total Comprehensive
  Shareholders' Equity              112,492       112,492          224,984       (112,492)         112,492
                                 -----------  ------------      -----------    -----------      -----------
  Long-Term Debt, Net of Current
    Portion                               -        22,475           22,475              -           22,475
  Notes Payable - Intercompany            -             -                -              -                -
                                 -----------  ------------      -----------    -----------      -----------

Total Capitalization                112,492       134,967          247,459       (112,492)         134,967
                                 -----------  ------------      -----------    -----------      -----------
  Minority Interest in Foreign
    Subsidiaries                          -        22,324           22,324              -           22,324
                                 -----------  ------------      -----------    -----------      -----------

CURRENT AND ACCRUED LIABILITIES:
  Notes Payable - Intercompany            -           120              120              -              120
  Notes Payable to Banks                  -        14,098           14,098              -           14,098
  Current Portion of Long-Term Debt       -         9,002            9,002              -            9,002
  Accounts Payable                        -         8,990            8,990              -            8,990
  Accounts Payable - Intercompany         -         2,506            2,506              -            2,506
  Other Accruals and Current
    Liabilities                           -         2,965            2,965              -            2,965
                                 -----------  ------------      -----------    -----------      -----------
                                          -        37,681           37,681              -           37,681
                                 -----------  ------------      -----------    -----------      -----------
DEFERRED CREDITS:
  Accumulated Deferred Income Taxes       -         9,961            9,961              -            9,961
  Fair Value of Deriv.
    Financial Instruments                 -           581              581              -              581
  Other Deferred Credits                  -            89               89              -               89
                                 -----------  ------------      -----------    -----------      -----------
                                          -        10,631           10,631              -           10,631
                                 -----------  ------------      -----------    -----------      -----------

TOTAL CAPITALIZATION &
LIABILITIES                     $ 112,492     $ 205,603        $ 318,095     $ (112,492)       $ 205,603
                                 ===========  ============      ===========    ===========      ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                     HORIZON ENERGY HOLDINGS
                                CONSOLIDATING STATEMENT OF INCOME
                           FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                      (THOUSANDS OF DOLLARS)

                                                                                             Consolidated
                                  Horizon     Horizon Energy                                Horizon Energy
                                   Energy     Development B.V.  Total Before   Eliminations  Holdings and
                                  Holdings    (Consolidated)    Eliminations    (Dr) Cr      Subsidiaries
                                 -----------  ------------      -------------  ------------  -------------

OPERATING REVENUE:                 $      -      $ 97,937        $ 97,937      $       -        $ 97,937
                                 -----------  ------------     -----------    -----------     -----------

OPERATING EXPENSE:
Fuel Used in Heat and
  Electric Generation                     -        53,334          53,334              -          53,334
Operation                                 -        19,403          19,403              -          19,403
Maintenance                               -            38              38              -              38
Property, Franchise & Other Taxes         -         2,169           2,169              -           2,169
Depreciation, Depletion and
  Amortization                            -        12,609          12,609              -          12,609
Income Taxes                              -         3,669           3,669              -           3,669
                                 -----------  ------------     -----------    -----------     -----------
                                          -        91,222          91,222              -          91,222
                                 -----------  ------------     -----------    -----------     -----------
Operating Income (Loss)                   -         6,715           6,715              -           6,715
                                 -----------  ------------     -----------    -----------     -----------

OTHER INCOME:
Unremitted Earnings of
  Subsidiaries                        3,287             -           3,287         (3,287)              -
Interest - Intercompany                   -             -               -              -               -
Other                                     -         1,482           1,482              -           1,482
                                 -----------  ------------     -----------    -----------     -----------

                                      3,287         1,482           4,769         (3,287)          1,482
                                 -----------  ------------     -----------    -----------     -----------

Income (Loss) Before
  Interest Charges and
  and Minority Interest in
  Foreign Subsidiaries                3,287         8,197          11,484         (3,287)          8,197
                                 -----------  ------------     -----------    -----------     -----------

INTEREST CHARGES:
Interest on Long-Term Debt                -         3,565           3,565              -           3,565
Interest-Intercompany                     -             1               1              -               1
Other Interest                            -             1               1              -               1
                                 -----------  ------------     -----------    -----------     -----------
                                          -         3,567           3,567              -           3,567
                                 -----------  ------------     -----------    -----------     -----------
Minority Interest in
  Foreign Subsidiaries                    -        (1,342)         (1,342)             -          (1,342)
                                 -----------  ------------     -----------    -----------     -----------

Net Income (Loss) Available
  for Common Stock                  $ 3,287      $  3,288        $  6,575       $ (3,287)       $  3,288
                                 ===========  ============     ===========    ===========     ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                     HORIZON ENERGY HOLDINGS
                  CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                           FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                      (THOUSANDS OF DOLLARS)

                                                                                             Consolidated
                                  Horizon     Horizon Energy                                Horizon Energy
EARNINGS REINVESTED                Energy     Development B.V.  Total Before  Eliminations  Holdings and
IN THE BUSINESS                   Holdings    (Consolidated)    Eliminations    (Dr) Cr      Subsidiaries
                                 -----------  ------------      -----------   ------------   -----------

Balance at Beginning of Year       $ 13,757      $ 19,507         $ 33,264     $ (19,507)      $ 13,757

Net Income (Loss) Available
for Common Stock                      3,287         3,288            6,575        (3,287)         3,288

Dividends on Common
Stock                                     -             -                -             -              -
                                 -----------  ------------      -----------   -----------    -----------

Balance at End of Year             $ 17,044      $ 22,795         $ 39,839     $ (22,794)      $ 17,045
                                 ===========  ============      ===========   ===========    ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                   HORIZON ENERGY HOLDINGS
                            CONSOLIDATING STATEMENT OF CASH FLOWS
                         FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                    (THOUSANDS OF DOLLARS)

                                                                                                   Consolidated
                                      Horizon     Horizon Energy     Total Before                 Horizon Energy
                                       Energy     Development B.V.   Eliminations                  Holdings and
                                      Holdings    (Consolidated)     & Adjustments  Eliminations   Subsidiaries
                                     -----------  ----------------   -------------  ------------   ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                       $ 3,287      $ 3,288            $ 6,575     $ (3,287)        $ 3,288
Adjustments to Reconcile Net Income
  to Net Cash Provided by Operating
  Activities:
  Unremitted Earnings of Subsidiaries    (3,287)           -             (3,287)       3,287               -
  Depreciation, Depletion &
    Amortization                              -       12,609             12,609            -          12,609
  Deferred Income Taxes                       -          188                188            -             188
  Minority Interest in Foreign
    Subsidiaries                              -        1,342              1,342            -           1,342
  Other                                       -        1,084              1,084            -           1,084

Change in:
  Accounts Receivable - Intercompany          -            -                  -            -               -
  Receivables and Unbilled Utility
    Revenue                                   -         (402)              (402)           -            (402)
  Material and Supplies                       -          932                932            -             932
  Prepayments                                 -           33                 33            -              33
  Accounts Payable                            -         (157)              (157)           -            (157)
  Accounts Payable - Intercompany             -            -                  -            -               -
  Other Accruals and Current
    Liabilities                               -        3,800              3,800            -           3,800
  Other Assets                                -       (1,350)            (1,350)           -          (1,350)
  Other Liabilities                           -           87                 87            -              87
                                     -----------  -----------        -----------  -----------     -----------

Net Cash Provided by (Used in)
  Operations                                  -       21,454             21,454            -          21,454
                                     -----------  -----------        -----------  -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures                          -      (15,587)           (15,587)           -         (15,587)
Investment in Associated Companies            -            -                  -            -               -
Other                                         -        7,007              7,007            -           7,007
                                     -----------  -----------        -----------  -----------     -----------
Net Cash Provided by (Used In)
  Investing  Activities                       -       (8,580)            (8,580)           -          (8,580)
                                     -----------  -----------        -----------  -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in Notes Payable to Banks              -       (5,009)            (5,009)           -          (5,009)
Change in Notes Payable - Intercompany        -          120                120            -             120
Net Proceeds from Issuance of
  Long-Term Debt                              -       12,927             12,927            -          12,927
Reduction of Long-Term Debt                   -      (20,724)           (20,724)           -         (20,724)
                                     -----------  -----------        -----------  -----------     -----------

Net Cash Provided by (Used in)
  Financing Activities                        -      (12,686)           (12,686)           -         (12,686)
                                     -----------  -----------        -----------  -----------     -----------

Effect of Exchange Rates on Cash              -          208                208            -             208
                                     -----------  -----------        -----------  -----------     -----------

Net Increase (Decrease) in Cash
  and Temporary Cash Investments              -          396                396            -             396

Cash and Temporary Cash Investments
  of Beginning of Period                      -        5,542              5,542            -           5,542
                                     -----------  -----------        -----------  -----------     -----------

Cash and Temporary Cash
  Investments at End of Year            $     -      $ 5,938            $ 5,938     $      -         $ 5,938
                                     ===========  ===========        ===========  ===========     ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                     HORIZON ENERGY HOLDINGS
                         CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                           FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                      (THOUSANDS OF DOLLARS)

                                                                                                  Consolidated
                                      Horizon     Horizon Energy    Total Before                 Horizon Energy
                                       Energy     Development B.V.  Eliminations   Eliminations   Holdings and
                                      Holdings    (Consolidated)    & Adjustments    (Dr) Cr      Subsidiaries
                                     -----------  ---------------   -------------  ----------   ---------------

Net Income (Loss) Available for
  Common Stock                         $  3,287      $  3,288         $  6,575      $  (3,287)     $  3,288
                                     -----------  ------------      -----------    -----------   -----------

Other Comprehensive Income (Loss) :
  Foreign Currency Translation
    Adjustment                            7,692         7,692           15,384         (7,692)        7,692
  Unrealized Gain / (Loss) on
    Derivative Financial
    Instruments During
    the Period                             (139)         (139)            (278)           139          (139)
  Reclassification Adjustment
    for Realized (Gains)/Losses on
    Derivative Financial Instruments
    in Net Income                           796           796            1,592           (796)          796
                                     -----------  ------------      -----------    -----------   -----------
Other Comprehensive Income (Loss),
  Before Tax                              8,349         8,349           16,698         (8,349)        8,349

  Income Tax Expense/(Benefit)
    Related to Unrealized Gain/
    (Loss) on Derivative
    Financial Instruments
    During the Period                       (43)          (43)             (86)            43           (43)
  Reclassification Adjustment for
    Income Tax Benefit/(Expense)
    on Derivative Financial
    Instruments in Net Income               247           247              494           (247)          247
                                     -----------  ------------      -----------    -----------   -----------
Income Taxes - Net                          204           204              408           (204)          204
                                     -----------  ------------      -----------    -----------   -----------
Other Comprehensive Income (Loss),
  Before Cumulative Effect,
  Net of Tax                              8,145         8,145           16,290         (8,145)        8,145
                                     -----------  ------------      -----------    -----------   -----------

Cumulative Effect of
  Change in Accounting                     (793)         (793)          (1,586)           793          (793)
                                     -----------  ------------      -----------    -----------   -----------

Other Comprehensive Income (Loss),
  After Cumulative Effect
  Net of Tax                              7,352         7,352           14,704         (7,352)        7,352
                                     -----------  ------------      -----------    -----------   -----------

Comprehensive Income (Loss)            $ 10,639      $ 10,640         $ 21,279      $ (10,639)     $ 10,640
                                     ===========  ============      ===========    ===========   ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                                                                        HORIZON ENERGY DEVELOPMENT, B.V.
                                                                                          CONSOLIDATING BALANCE SHEET
                                                                                             AT SEPTEMBER 30, 2001
                                                                                             (THOUSANDS OF DOLLARS)

                                                             United
                                                          Energy, a.s.                                                                                                                          Consolidated
                                                              (UE)                  Power                                   Horizon Energy         Total Before                                 Horizon B.V.
                                   Horizon B.V.          (Consolidated)          Development             Kromeriz         Development, s.r.o.      Eliminations          Eliminations         and Subsidiaries
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

ASSETS

PROPERTY, PLANT & EQUIPMENT               $       -              $ 269,717                $    -                $ 1,135               $   221             $ 271,073            $        -              $ 271,073
  Less:  Accumulated DD&A                         -                 91,511                     -                  1,135                   178                92,824                     -                 92,824
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                                  -                178,206                     -                      -                    43               178,249                     -                178,249
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
CURRENT ASSETS:
  Cash and Temporary Cash Investments            34                  4,426                     2                      6                 1,470                 5,938                     -                  5,938
  Notes Receivable - Intercompany                18                      -                     -                      -                    54                    72                   (72)                     -
  Allowance for Uncollectible Accounts            -                   (762)                    -                      -                     -                  (762)                    -                   (762)
  Accounts Receivable - Intercompany              -                      -                     -                      -                   115                   115                  (115)                     -
  Accounts Receivable                             -                  5,438                     -                    176                    93                 5,707                     -                  5,707
  Unbilled Utility Revenue                        -                  3,840                     -                      -                     -                 3,840                     -                  3,840
  Materials and Supplies                          -                  3,014                     -                      -                     -                 3,014                     -                  3,014
  Prepayments                                     -                     24                     -                      -                     3                    27                     -                     27
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                                 52                 15,980                     2                    182                 1,735                17,951                  (187)                17,764
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
OTHER ASSETS:
  Investment in Associated Companies        115,093                      -                     -                      -                     -               115,093              (115,093)                     -
  Other Assets                                  (27)                 9,059                     -                    (35)                  593                 9,590                     -                  9,590
  Notes Receivable - Intercompany                 -                      -                     -                      -                    95                    95                   (95)                     -
  Deferred Charges                                -                      -                     -                      -                     -                     -                     -                      -
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                            115,066                  9,059                     -                    (35)                  688               124,778              (115,188)                 9,590
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
TOTAL ASSETS                              $ 115,118              $ 203,245                   $ 2                $   147               $ 2,466             $ 320,978            $ (115,375)             $ 205,603
                                ====================   ====================  ====================  =====================  ====================  ====================  ====================   ====================

CAPITALIZATION & LIABILITIES

CAPITALIZATION:
  Common Stock                            $      29              $  59,770                $ (506)               $ 1,524               $ 1,779             $  62,596            $  (62,567)             $      29
  Paid - in - Capital                       109,921                 50,804                 1,623                    354                     -               162,702               (52,781)               109,921
  Earnings Reinvested in the Business        22,794                 21,619                  (258)                (1,642)                  770                43,283               (20,489)                22,794
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
  Total Common Shareholder
    Equity Before Items of
    Other Comprehensive Income              132,744                132,193                   859                    236                 2,549               268,581              (135,837)               132,744
  Accumulated Other Comprehensive Income    (20,252)               (19,374)                 (857)                  (299)                 (214)              (40,996)               20,744                (20,252)
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
Total Comprehensive Shareholders'
  Equity                                    112,492                112,819                     2                    (63)                2,335               227,585              (115,093)               112,492
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
  Long-Term Debt, Net of Current
    Portion                                       -                 22,475                     -                      -                     -                22,475                     -                 22,475
  Notes Payable - Intercompany                    -                      -                     -                     82                     -                    82                   (82)                     -
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Total Capitalization                        112,492                135,294                     2                     19                 2,335               250,142              (115,175)               134,967
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
  Minority Interest in Foreign
    Subsidiaries                                  -                 22,324                     -                      -                     -                22,324                     -                 22,324
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

CURRENT AND ACCRUED LIABILITIES:
  Notes Payable - Intercompany                  120                      -                     -                      -                     -                   120                     -                    120
  Notes Payable to Banks                          -                 14,098                     -                      -                     -                14,098                     -                 14,098
  Current Portion of Long-Term Debt               -                  9,002                     -                      -                     -                 9,002                     -                  9,002
  Accounts Payable                                -                  8,976                     -                    140                    51                 9,167                  (177)                 8,990
  Accounts Payable - Intercompany             2,506                      -                     -                     23                     -                 2,529                   (23)                 2,506
  Other Accruals and Current
    Liabilities                                   -                  2,920                     -                    (35)                   80                 2,965                     -                  2,965
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                              2,626                 34,996                     -                    128                   131                37,881                  (200)                37,681
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
DEFERRED CREDITS:
  Accumulated Deferred Income Taxes               -                  9,961                     -                      -                     -                 9,961                     -                  9,961
  Fair Value of Deriv. Financial
    Instruments                                   -                    581                     -                      -                     -                   581                     -                    581
  Other Deferred Credits                          -                     89                     -                      -                     -                    89                     -                     89
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                                  -                 10,631                     -                      -                     -                10,631                     -                 10,631
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

TOTAL CAPITALIZATION & LIABILITIES        $ 115,118              $ 203,245                   $ 2                  $ 147               $ 2,466             $ 320,978            $ (115,375)             $ 205,603
                                ====================   ====================  ====================  =====================  ====================  ====================  ====================   ====================

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                                                                        HORIZON ENERGY DEVELOPMENT, B.V.
                                                                                       CONSOLIDATING STATEMENT OF INCOME
                                                                                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                                                             (THOUSANDS OF DOLLARS)

                                                                                                                                                                                                Consolidated
                                                               UE                   Power                                   Horizon Energy         Total Before          Eliminations           Horizon B.V.
                                   Horizon B.V.          (Consolidated)          Development             Kromeriz         Development, s.r.o.      Eliminations             (Dr) Cr           and Subsidiaries
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

OPERATING REVENUE:                          $     -               $ 96,925                $    -               $    975                 $ 930              $ 98,830              $   (893)              $ 97,937
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

OPERATING EXPENSE:
Fuel Used in Heat and
  Electric Generation                             -                 52,601                     -                    733                     -                53,334                     -                 53,334
Operation                                        61                 18,646                   153                    781                   656                20,297                  (894)                19,403
Maintenance                                       -                      -                     -                     31                     7                    38                     -                     38
Property, Franchise & Other Taxes                 4                  2,070                     5                      1                    89                 2,169                     -                  2,169
Depreciation, Depletion and
  Amortization                                    -                 11,654                     -                    924                    31                12,609                     -                 12,609
Income Taxes                                      -                  3,664                     -                      -                     5                 3,669                     -                  3,669
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                                 65                 88,635                   158                  2,470                   788                92,116                  (894)                91,222
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
Operating Income (Loss)                         (65)                 8,290                  (158)                (1,495)                  142                 6,714                     1                  6,715
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

OTHER INCOME:
Unremitted Earnings of
  Subsidiaries                                3,354                      -                     -                      -                     -                 3,354                (3,354)                     -
Other                                             -                  1,209                     -                    190                    83                 1,482                     -                  1,482
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

                                              3,354                  1,209                     -                    190                    83                 4,836                (3,354)                 1,482
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Income (Loss) Before
  Interest Charges and
  and Minority Interest in
  Foreign Subsidiaries                        3,289                  9,499                  (158)                (1,305)                  225                11,550                (3,353)                 8,197
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

INTEREST CHARGES:
Interest on Long-Term Debt                        -                  3,554                     -                     11                     -                 3,565                     -                  3,565
Interest-Intercompany                             1                      -                     -                      -                     -                     1                     -                      1
Other Interest                                    1                      -                     -                      -                     -                     1                     -                      1
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
                                                  2                  3,554                     -                     11                     -                 3,567                     -                  3,567
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
Minority Interest in
  Foreign Subsidiaries                            -                 (1,342)                    -                      -                     -                (1,342)                    -                 (1,342)
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Net Income (Loss) Available
  for Common Stock                          $ 3,287               $  4,603                $ (158)              $ (1,316)                $ 225              $  6,641              $ (3,353)              $  3,288
                                ====================   ====================  ====================  =====================  ====================  ====================  ====================   ====================

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                                                                        HORIZON ENERGY DEVELOPMENT, B.V.
                                                                         CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                                                                                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                                                             (THOUSANDS OF DOLLARS)

                                                                                                                                                                                                Consolidated
EARNINGS REINVESTED                                            UE                   Power                                   Horizon Energy         Total Before          Eliminations           Horizon B.V.
IN THE BUSINESS                    Horizon B.V.          (Consolidated)          Development             Kromeriz         Development, s.r.o.      Eliminations             (Dr) Cr           and Subsidiaries
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Balance at Beginning of Year               $ 19,507               $ 17,017                $ (100)              $   (326)                $ 545              $ 36,643             $ (17,136)              $ 19,507

Net Income (Loss) Available
  for Common Stock                            3,287                  4,603                  (158)                (1,316)                  225                 6,641                (3,353)                 3,288

Dividends on Common
  Stock                                           -                      -                     -                      -                     -                     -                     -                      -
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Balance at End of Year                     $ 22,794               $ 21,620                $ (258)              $ (1,642)                $ 770              $ 43,284             $ (20,489)              $ 22,795
                                ====================   ====================  ====================  =====================  ====================  ====================  ====================   ====================

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                                                                         HORIZON ENERGY DEVELOPMENT, B.V.
                                                                                       CONSOLIDATING STATEMENT OF CASH FLOWS
                                                                                   FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                                                              (THOUSANDS OF DOLLARS)

                                                                                                                                                                                                         Consolidated
                                                                       UE                   Power                                   Horizon Energy          Total Before                                 Horizon B.V.
                                           Horizon B.V.          (Consolidated)          Development             Kromeriz         Development, s.r.o.       Eliminations          Eliminations         and Subsidiaries
                                        --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                             $ 3,287                $ 4,603                $ (158)              $ (1,316)              $   225                $ 6,641              $ (3,353)               $ 3,288
Adjustments to Reconcile Net Income
  to Net Cash Provided by Operating
  Activities:
  Unremitted Earnings of Subsidiaries          (3,354)                     -                     -                      -                     -                 (3,354)                3,354                      -
  Depreciation, Depletion &
    Amortization                                    -                 11,654                     -                    924                    31                 12,609                     -                 12,609
  Deferred Income Taxes                             -                    182                     -                      -                     6                    188                     -                    188
  Minority Interest in Foreign
    Subsidiaries                                    -                  1,342                     -                      -                     -                  1,342                     -                  1,342
  Other                                             -                    578                     -                    483                    23                  1,084                     -                  1,084

Change in:
  Accounts Receivable - Intercompany                -                      -                     -                      -                    25                     25                   (25)                     -
  Receivables and Unbilled Utility
    Revenue                                         -                   (493)                    -                     92                    (1)                  (402)                    -                   (402)
  Material and Supplies                             -                    932                     -                      -                     -                    932                     -                    932
  Prepayments                                       -                      9                     -                      2                    22                     33                     -                     33
  Accounts Payable                                  -                   (234)                   (1)                    64                    (2)                  (173)                   16                   (157)
  Accounts Payable - Intercompany                   -                      -                     -                      -                     -                      -                     -                      -
  Other Accruals and Current
    Liabilities                                     -                  3,774                     -                    (35)                   61                  3,800                     -                  3,800
  Other Assets                                    (13)                (1,487)                  115                     35                     -                 (1,350)                    -                 (1,350)
  Other Liabilities                                 1                     86                     -                      -                     -                     87                     -                     87
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

Net Cash Provided by (Used in)
  Operations                                      (79)                20,946                   (44)                   249                   390                 21,462                    (8)                21,454
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures                                -                (15,451)                    -                   (135)                   (1)               (15,587)                    -                (15,587)
Change in Notes
  Receivable - Intercompany                       (19)                     -                     -                      -                    (7)                   (26)                   26                      -
Investment in Associated Companies                  -                      -                     -                      -                     -                      -                     -                      -
Other                                            (100)                 7,383                     -                      -                  (276)                 7,007                     -                  7,007
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------
Net Cash Provided by (Used In)
  Investing  Activities                          (119)                (8,068)                    -                   (135)                 (284)                (8,606)                   26                 (8,580)
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in Notes Payable to Banks                    -                 (5,009)                    -                      -                     -                 (5,009)                    -                 (5,009)
Change in Notes Payable - Intercompany            120                      -                    18                      -                     -                    138                   (18)                   120
Net Proceeds from Issuance of
  Long-Term Debt                                    -                 12,927                     -                      -                     -                 12,927                     -                 12,927
Reduction of Long-Term Debt                         -                (20,724)                    -                      -                     -                (20,724)                    -                (20,724)
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

Net Cash Provided by (Used in)
  Financing Activities                            120                (12,806)                   18                      -                     -                (12,668)                  (18)               (12,686)
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

Effect of Exchange Rates on Cash                    -                    201                    26                   (134)                  115                    208                     -                    208
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

Net Increase (Decrease) in Cash
  and Temporary Cash Investments                  (78)                   273                     -                    (20)                  221                    396                     -                    396

Cash and Temporary Cash Investments
  of Beginning of Period                          112                  4,153                     2                     26                 1,249                  5,542                     -                  5,542
                                  --------------------  ---------------------  --------------------  ---------------------  --------------------  ---------------------  --------------------   --------------------

Cash and Temporary Cash
  Investments at End of Year                  $    34                $ 4,426                $    2               $      6               $ 1,470                $ 5,938              $      -                $ 5,938
                                  ====================  =====================  ====================  =====================  ====================  =====================  ====================   ====================

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                                                                        HORIZON ENERGY DEVELOPMENT, B.V.
                                                                                CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                                                                                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                                                             (THOUSANDS OF DOLLARS)

                                                                                                                                                                                                       Consolidated
                                                                      UE                   Power                                   Horizon Energy         Total Before          Eliminations           Horizon B.V.
                                          Horizon B.V.          (Consolidated)          Development             Kromeriz         Development, s.r.o.      Eliminations             (Dr) Cr           and Subsidiaries
                                      --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Net Income (Loss) Available for
  Common Stock                             $  3,287               $  4,603                $ (158)              $ (1,316)                $ 225              $  6,641             $  (3,353)              $  3,288
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Other Comprehensive Income (Loss) :
  Foreign Currency Translation
    Adjustment                                7,692                  7,592                  (276)                  (223)                  146                14,931                (7,239)                 7,692
  Unrealized Gain / (Loss) on
    Derivative Financial
    Instruments During
    the Period                                 (139)                  (139)                    -                      -                     -                  (278)                  139                   (139)
  Reclassification Adjustment
    for Realized (Gains)/Losses on
    Derivative Financial Instruments
    in Net Income                               796                    796                     -                      -                     -                 1,592                  (796)                   796
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
Other Comprehensive Income (Loss),
  Before Tax                                  8,349                  8,249                  (276)                  (223)                  146                16,245                (7,896)                 8,349

  Income Tax Expense/(Benefit)
    Related to Unrealized Gain/(Loss)
    on Derivative Financial
    Instruments During
    the Period                                  (43)                   (43)                    -                      -                     -                   (86)                   43                    (43)
  Reclassification Adjustment for
    Income Tax Benefit/(Expense)
    on Derivative Financial
    Instruments in Net Income                   247                    247                     -                      -                     -                   494                  (247)                   247
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
Income Taxes - Net                              204                    204                     -                      -                     -                   408                  (204)                   204
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------
Other Comprehensive Income (Loss),
  After Cumulative Effect,
  Net of Tax                                  8,145                  8,045                  (276)                  (223)                  146                15,837                (7,692)                 8,145
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Cumulative Effect of
  Change in Accounting                         (793)                  (793)                    -                      -                     -                (1,586)                  793                   (793)
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Other Comprehensive Income (Loss),
  After Cumulative Effect
  Net of Tax                                  7,352                  7,252                  (276)                  (223)                  146                14,251                (6,899)                 7,352
                                --------------------   --------------------  --------------------  ---------------------  --------------------  --------------------  --------------------   --------------------

Comprehensive Income (Loss)                $ 10,639               $ 11,855                $ (434)              $ (1,539)                $ 371              $ 20,892             $ (10,252)              $ 10,640
                                ====================   ====================  ====================  =====================  ====================  ====================  ====================   ====================

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                                       UNITED ENERGY, a.s.
                                                   CONSOLIDATING BALANCE SHEET
                                                      AT SEPTEMBER 30, 2001
                                                      (THOUSANDS OF DOLLARS)

                                                                   Jablonecka
                                                                   Teplarenska a                                        Consolidated
                                                      Teplarna     Realitni, as               Total Before                UE and
                                            UE         Liberec       (JTR)          ENOP      Eliminations Eliminations Subsidiaries
                                        -----------  ------------  -----------   -----------  ------------ ------------ -----------

ASSETS

PROPERTY, PLANT & EQUIPMENT              $ 254,445      $ 15,200          $ -         $  72    $ 269,717   $        -    $ 269,717
  Less:  Accumulated DD&A                   86,567         4,611            -           333       91,511            -       91,511
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                           167,878        10,589            -          (261)     178,206            -      178,206
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
CURRENT ASSETS:
  Cash and Temporary Cash Investments        1,888         2,305            -           233        4,426            -        4,426
  Notes Receivable - Intercompany                -             -            -             -            -            -            -
  Allowance for Uncollectible Accounts        (386)         (375)           -            (1)        (762)           -         (762)
  Accounts Receivable - Intercompany             -             -            -             -            -            -            -
  Accounts Receivable                        3,686         1,635            -           117        5,438            -        5,438
  Unbilled Utility Revenue                   3,645           195            -             -        3,840            -        3,840
  Materials and Supplies                     2,915            99            -             -        3,014            -        3,014
  Prepayments                                   16             8            -             -           24            -           24
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                            11,764         3,867            -           349       15,980            -       15,980
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
OTHER ASSETS:
  Investment in Associated Companies         8,429             -            -             -        8,429       (8,429)           -
  Other Assets                               9,946          (986)           -            99        9,059            -        9,059
  Notes Receivable - Intercompany                -             -            -             -            -            -            -
  Deferred Charges                               -             -            -             -            -            -            -
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                            18,375          (986)           -            99       17,488       (8,429)       9,059
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
TOTAL ASSETS                             $ 198,017      $ 13,470          $ -         $ 187    $ 211,674   $   (8,429)   $ 203,245
                                        ===========  ============  ===========   ===========  ===========  ===========  ===========

CAPITALIZATION & LIABILITIES

CAPITALIZATION:
  Common Stock                           $  59,770      $ 17,004          $ -         $   3     $ 76,777    $ (17,007)   $  59,770
  Paid - in - Capital                       50,804        (5,723)           -           883       45,964        4,840       50,804
  Earnings Reinvested in the Business       21,619           153            -          (527)      21,245          374       21,619
                                        -----------  ------------  ------------  -----------  -----------  -----------  -----------
  Total Common Shareholder
    Equity Before Items of Other
    Comprehensive Income                   132,193        11,434            -           359      143,986      (11,793)     132,193
  Accumulated Other Comprehensive Income   (19,374)       (3,247)           -          (117)     (22,738)       3,364      (19,374)
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
Total Comprehensive Shareholders'
  Equity                                   112,819         8,187            -           242      121,248       (8,429)     112,819
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
  Long-Term Debt, Net of Current
    Portion                                 22,475             -            -             -       22,475            -       22,475
  Notes Payable - Intercompany                   -             -            -             -            -            -            -
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

Total Capitalization                       135,294         8,187            -           242      143,723       (8,429)     135,294
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
  Minority Interest in Foreign
    Subsidiaries                            18,378         3,946            -             -       22,324            -       22,324
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

CURRENT AND ACCRUED LIABILITIES:
  Notes Payable - Intercompany                   -             -            -             -            -            -            -
  Notes Payable to Banks                    14,098             -            -             -       14,098            -       14,098
  Current Portion of Long-Term Debt          9,002             -            -             -        9,002            -        9,002
  Accounts Payable                           8,092           806            -            65        8,963           13        8,976
  Accounts Payable - Intercompany               13             -            -             -           13          (13)           -
  Other Accruals and Current
  Liabilities                                2,312           564            -            44        2,920            -        2,920
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                            33,517         1,370            -           109       34,996            -       34,996
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
DEFERRED CREDITS:
  Accumulated Deferred Income Taxes         10,158           (33)           -          (164)       9,961            -        9,961
  Fair Value of Deriv. Financial
    Instruments                                581             -            -             -          581            -          581
  Other Deferred Credits                        89             -            -             -           89            -           89
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                            10,828           (33)           -          (164)      10,631            -       10,631
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

TOTAL CAPITALIZATION & LIABILITIES       $ 198,017      $ 13,470          $ -         $ 187    $ 211,674     $ (8,429)   $ 203,245
                                        ===========  ============  ===========   ===========  ===========  ===========  ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

Note:  At the end of June 2001, UE sold its 65.78% in JTR.

                                                       UNITED ENERGY, a.s.
                                                CONSOLIDATING STATEMENT OF INCOME
                                           FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                      (THOUSANDS OF DOLLARS)

                                                                                                                         Consolidated
                                                      Teplarna                                Total Before  Eliminations    UE and
                                            UE         Liberec        JTR           ENOP      Eliminations  (Dr) Cr      Subsidiaries
                                        -----------  ------------  -----------   -----------  ------------  -----------  ------------

OPERATING REVENUE:                        $ 75,348      $ 16,784      $ 7,280        $  511     $ 99,923     $ (2,998)    $ 96,925
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

OPERATING EXPENSE:
Fuel Used in Heat and
  Electric Generation                       37,275        11,159        3,998           169       52,601            -       52,601
Operation                                   15,378         5,056          736           474       21,644       (2,998)      18,646
Maintenance                                      -             -            -             -            -            -            -
Property, Franchise & Other Taxes            1,646           288          132             4        2,070            -        2,070
Depreciation, Depletion and
  Amortization                               9,793           847          621           393       11,654            -       11,654
Income Taxes                                 3,558          (199)         380           (75)       3,664            -        3,664
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                            67,650        17,151        5,867           965       91,633       (2,998)      88,635
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
Operating Income (Loss)                      7,698          (367)       1,413          (454)       8,290            -        8,290
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

OTHER INCOME:
Unremitted Earnings of
  Subsidiaries                                 403             -            -             -          403         (403)           -
Other                                          914           265           27             3        1,209            -        1,209
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

                                             1,317           265           27             3        1,612         (403)       1,209
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

Income (Loss) Before
  Interest Charges and
  and Minority Interest in
  Foreign Subsidiaries                       9,015          (102)       1,440          (451)       9,902         (403)       9,499
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

INTEREST CHARGES:
Interest on Long-Term Debt                   3,489             -           65             -        3,554            -        3,554
Interest-Intercompany                            -             -            -             -            -            -            -
Other Interest                                   -             -            -             -            -            -            -
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
                                             3,489             -           65             -        3,554            -        3,554
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------
Minority Interest in
  Foreign Subsidiaries                        (923)           48         (467)            -       (1,342)           -       (1,342)
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

Net Income (Loss) Available
  for Common Stock                        $  4,603     $     (54)    $    908        $ (451)    $  5,006    $    (403)    $  4,603
                                        ===========  ============  ===========   ===========  ===========  ===========  ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

Note:  At the end of June 2001, UE sold its 65.78% in JTR.  The income statement
for JTR represents the period of October 1, 2000 through June 30, 2001.

                                                       UNITED ENERGY, a.s.
                                  CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
                                           FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                      (THOUSANDS OF DOLLARS)

                                                                                                                          Consolidated
EARNINGS REINVESTED                                   Teplarna                                Total Before  Eliminations     UE and
IN THE BUSINESS                             UE         Liberec        JTR           ENOP      Eliminations    (Dr) Cr     Subsidiaries
                                        -----------  ------------  -----------   -----------  -----------   ------------  ------------

Balance at Beginning of Year              $ 17,017         $ 207        $ 271        $  (76)    $ 17,419       $ (402)    $ 17,017

Net Income (Loss) Available
  for Common Stock                           4,603           (54)         908          (451)       5,006         (403)       4,603

Elimination of JTR Earnings
  Reinvested in Business due
  to sale in June 2001                           -             -       (1,179)            -       (1,179)       1,179            -

Dividends on Common
  Stock                                          -             -            -             -            -            -            -
                                        -----------  ------------  -----------   -----------  -----------  -----------  -----------

Balance at End of Year                    $ 21,620         $ 153        $   -        $ (527)    $ 21,246       $  374     $ 21,620
                                        ===========  ============  ===========   ===========  ===========  ===========  ===========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

                                             UNITED ENERGY, a.s.
                                    CONSOLIDATING STATEMENT OF CASH FLOWS
                                 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                            (THOUSANDS OF DOLLARS)

                                                                                        Total Before                Consolidated
                                                       Teplarna                         Eliminations                   UE and
                                              UE       Liberec      JTR        ENOP     & Adjustments  Eliminations  Subsidiaries
                                          ----------  ---------  ---------  ---------  -------------  ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                          $ 4,603    $   (54)     $ 908     $ (451)      $ 5,006        $ (403)      $ 4,603
Adjustments to Reconcile Net Income
  to Net Cash Provided by Operating
  Activities:
  Unremitted Earnings of Subsidiaries         (403)         -          -          -          (403)          403             -
  Depreciation, Depletion &
    Amortization                             9,793        847        621        393        11,654             -        11,654
  Deferred Income Taxes                        862       (585)        57       (152)          182             -           182
  Minority Interest in Foreign
    Subsidiaries                               923        (48)       467          -         1,342             -         1,342
  Other                                        640        (58)       (10)         6           578             -           578

Change in:
  Accounts Receivable - Intercompany            14          -          -          -            14           (14)            -
  Receivables and Unbilled Utility
    Revenue                                   (785)       (89)        84        297          (493)            -          (493)
  Material and Supplies                        (67)       631        368          -           932             -           932
  Prepayments                                    9          -          -          -             9             -             9
  Accounts Payable                            (617)       451       (139)        81          (224)          (10)         (234)
  Accounts Payable - Intercompany              (25)         -          -          -           (25)           25             -
  Other Accruals and Current
    Liabilities                              2,825        494        308        147         3,774             -         3,774
  Other Assets                              (1,217)       (30)      (240)         -        (1,487)            -        (1,487)
  Other Liabilities                             86          -          -          -            86             -            86
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------

Net Cash Provided by (Used in)
  Operations                                16,641      1,559      2,424        321        20,945             1        20,946
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures                       (14,207)      (958)      (285)        (1)      (15,451)            -       (15,451)
Change in Notes
  Receivable - Intercompany                      -          -          -          -             -             -             -
Other                                        8,650         43        269          -         8,962        (1,579)        7,383
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------
Net Cash Provided by (Used In)
  Investing  Activities                     (5,557)      (915)       (16)        (1)       (6,489)       (1,579)       (8,068)
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in Notes Payable to Banks            (3,756)         -     (1,253)         -        (5,009)            -        (5,009)
Change in Notes Payable - Intercompany           -          -       (593)         -          (593)          593             -
Net Proceeds from Issuance of
  Long-Term Debt                            12,927          -          -          -        12,927             -        12,927
Repayment of Lease to Subsidiaries               -          -          -        (95)          (95)           95             -
Reduction of Long-Term Debt                (20,562)         -       (162)         -       (20,724)            -       (20,724)
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------

Net Cash Provided by (Used in)
  Financing Activities                     (11,391)         -     (2,008)       (95)      (13,494)          688       (12,806)
                                        ----------  ---------  ---------  ---------    ----------    ----------     ---------

Effect of Exchange Rates on Cash               135         88        (13)        (9)          201             -           201
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------

Net Increase (Decrease) in Cash
  and Temporary Cash Investments              (172)       732        387        216         1,163          (890)          273

Cash and Temporary Cash Investments
  of Beginning of Period                     2,060      1,573        502         18         4,153             -         4,153
                                         ----------  ---------  ---------  ---------    ----------    ----------     ---------

Cash and Temporary Cash
  Investments at End of Year               $ 1,888    $ 2,305      $ 889     $  234       $ 5,316        $ (890)      $ 4,426
                                         ==========  =========  =========  =========    ==========    ==========     =========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

Note:  At the end of June 2001, UE sold its 65.78% in JTR.  The statement of
cash flows for JTR represents the period of October 1, 2000 through June 30, 2001.

                                                   UNITED ENERGY, a.s.
                                     CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
                                       FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
                                                  (THOUSANDS OF DOLLARS)

                                                                                                                    Consolidated
                                                    Teplarna                            Total Before  Eliminations     UE and
                                          UE        Liberec        JTR         ENOP     Eliminations    (Dr) Cr     Subsidiaries
                                      ----------  -----------  ----------   ----------  ------------  -----------   ------------

Net Income (Loss) Available for
  Common Stock                         $  4,603        $ (54)    $   908       $ (451)   $  5,006       $   (403)     $  4,603
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------

Other Comprehensive Income (Loss) :
  Foreign Currency Translation
    Adjustment                            7,592          675       1,036           30       9,333         (1,741)        7,592
  Unrealized Gain / (Loss) on
    Derivative Financial
    Instruments During
    the Period                             (139)           -           -            -        (139)             -          (139)
  Reclassification Adjustment
    for Realized (Gains)/Losses on
    Derivative Financial Instruments
    in Net Income                           796            -           -            -         796              -           796
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------
Other Comprehensive Income (Loss),
  Before Tax                              8,249          675       1,036           30       9,990         (1,741)        8,249

  Income Tax Expense/(Benefit)
    Related to Unrealized Gain/(Loss)
    on Derivative Financial
    Instruments During
    the Period                              (43)           -           -            -         (43)             -           (43)
  Reclassification Adjustment for
    Income Tax Benefit/(Expense) on
    Derivative Financial
    Instruments in Net Income               247            -           -            -         247              -           247
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------
Income Taxes - Net                          204            -           -            -         204              -           204
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------
Other Comprehensive Income (Loss),
  Before Cumulative Effect,
  Net of Tax                              8,045          675       1,036           30       9,786         (1,741)        8,045
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------

Cumulative Effect of
  Change in Accounting                     (793)           -           -            -        (793)             -          (793)
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------

Other Comprehensive Income (Loss),
  After Cumulative Effect
  Net of Tax                              7,252          675       1,036           30       8,993         (1,741)        7,252
                                      ----------  -----------  ----------   ----------  ----------    -----------    ----------

Comprehensive Income (Loss)            $ 11,855        $ 621     $ 1,944       $ (421)   $ 13,999       $ (2,144)     $ 11,855
                                      ==========  ===========  ==========   ==========  ==========    ===========    ==========

See Notes to Consolidated  Financial  Statements  included in Item 8 of National
Fuel Gas  Company's  Form 10-K for the fiscal  year ended  September  30,  2001,
incorporated herein by reference.

Note:  At the end of June 2001, UE sold its 65.78% in JTR.  The statement of
comprehensive income for JTR represents the period of October 1, 2000 through
June 30, 2001.
EXHIBITS

   A.    *(1)  Annual Report on Form 10-K for fiscal year ended September 30,
               2001 filed December 17, 2001 (File No. 1-3880).

          (2)  National Fuel Gas Company 2001 Annual Report to Shareholders
               (paper copy submitted under cover of Form SE).

         *(3)  National Fuel Gas Company Proxy Statement, dated and filed
               January 10, 2002 (File No. 1-03880).

   B.      Articles of Incorporation, By-Laws and Partnership Agreements.

          (1)  National Fuel Gas Company

                    *i    Restated Certificate of Incorporation of National Fuel
                          Gas Company, dated September 21, 1998 (Exhibit 3.1,
                          Form 10-K for fiscal year ended September 30, 1998 in
                          File No. 1-3880).

                   *ii    National Fuel Gas Company By-Laws as amended on
                          December 13, 2001 (Exhibit 3.1, Form 10-K/A for fiscal
                          year ended September 30, 2001 in File No. 1-3880)

          (2)  National Fuel Gas Distribution Corporation

                    *i    By-Laws, as amended March 11, 1998.  (Exhibit (2)i,
                          designated as Exhibit EX-99-1 for EDGAR purposes, Form
                          U5S for fiscal year ended September 30, 1999.)

                   *ii    Restated Certificate of Incorporation of National Fuel
                          Gas Distribution Corporation, dated May 9, 1988
                          (Exhibit B-1 in File No. 70-7478).

          (3)  National Fuel Gas Supply Corporation

                    *i    By-Laws, as amended (Exhibit (3)i, Form U5S for fiscal
                          year ended September 30, 1989).

                   *ii    Articles of Incorporation of United Natural Gas Company,
                          dated February 1, 1886 (Exhibit (3)ii, Form U5S for
                          fiscal year ended September 30, 1984).

                  *iii    Certificate of Merger and Consolidation dated January 2,
                          1951 (Exhibit (3)iii, Form U5S for fiscal year
                          ended September 30, 1984).

                   *iv    Joint Agreement and Plan of Merger, dated June 18, 1974
                          (Exhibit (3)iv, Form U5S for fiscal year ended
                          September 30, 1987).

                    *v    Certificate of Merger and Plan of Merger of Penn-York
                          Energy Corporation and National Fuel Gas Supply
                          Corporation dated April 1, 1994 (Exhibit (3)v, designated
                          as Exhibit EX-99-3 for EDGAR purposes, Form U5S
                          for fiscal year ended September 30, 1994).

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

          (4)  Leidy Hub, Inc. (formerly Enerop Corporation)

                    *i    By-Laws (Exhibit A-15, File No. 70-7478).

                   *ii    Restated Certificate of Incorporation of Enerop Corporation
                          dated October 15, 1993.  (Exhibit (4)ii,
                          designated as Exhibit Ex-99-2 for EDGAR purposes, Form
                          U5S for fiscal year ended September 30, 1999).

                  *iii    Action by Board of Directors to amend the By-Laws dated
                          October 10, 1993 (Exhibit (4)iii, designated as
                          Exhibit EX-3 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1993).

          (5)  Seneca Resources Corporation

                    *i    By-Laws, as amended (Exhibit (5)i, Form U5S for fiscal
                          year ended September 30, 1989).

                   *ii    Articles of Incorporation of Mars Natural Gas Company
                          dated March 29, 1913 (Exhibit (5)ii, Form U5S for
                          fiscal year ended September 30, 1984).

                  *iii    Secretary's Certificate dated January 4, 1918 (Exhibit
                          (5)iii, Form U5S for fiscal year ended September 30,
                          1984).

                   *iv    Articles of Amendment, dated March 30, 1955 (Exhibit
                          (5)iv, Form U5S for fiscal year ended September 30,
                          1984).

                    *v    Certificate of Amendment changing name of the Mars Company
                          to Seneca Resources Corporation, January 29, 1976
                          (Exhibit (5)v, Form U5S for fiscal year ended
                          September 30, 1984).

                   *vi    Certificate of Merger and Plan of Merger of Seneca
                          Resources Corporation and Empire Exploration, Inc. dated
                          April 29, 1994 (Exhibit (5)vi, designated as Exhibit
                          EX-99-2 for EDGAR purposes, Form U5S for fiscal year
                          ended September 30, 1994).

                  *vii    Articles of Merger and Plan of Merger of HarCor Energy,
                          Inc. with and into Seneca Resources Corporation, filed
                          August 31, 1999.  (Exhibit (5)vii, designated as Exhibit
                          EX-99-3 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1999.)

                 *viii    Certificate of Ownership and Merger merging HarCor
                          Energy, Inc. into Seneca Resources Corporation filed
                          August 31, 1999.  (Exhibit (5)viii, designated as
                          Exhibit EX-99-4 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1999.)

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

          (6)  Empire Exploration Company

                     i    Certificate of Limited Partnership, dated November 28,
                          1983.  Designated as Exhibit ex99-1 for EDGAR
                          purposes.

                   *ii    Limited Partnership Agreement, dated November 28, 1983,
                          between Empire  Exploration, Inc. (now Seneca
                          Resources Corporation) as general partner and Herman
                          P. Loonsk as limited partner (Exhibit (8), Form U5S for
                          fiscal year ended September 30, 1984).

          (7)  Empire 1983 Drilling Program

                     i    Certificate of Limited Partnership, dated November 28,
                          1983.  Designated as Exhibit ex99-2 for EDGAR
                          purposes.

                    ii    Amendment of Certificate of Limited Partnership, dated
                          December 21, 1983.  Designated as Exhibit ex99-3 for
                          EDGAR purposes.

                  *iii    Limited Partnership Agreement, dated November 28, 1983,
                          among Empire Exploration, Inc. (now Seneca Resources
                          Corporation) as general partner and those parties
                          collectively called limited partners (Exhibit (9),
                          Form U5S for fiscal year ended September 30, 1984).

          (8)  Empire 1983 Joint Venture

                     i    Business Certificate for Partners, dated December 6,
                          1983.  Designated as Exhibit ex99-4 for EDGAR purposes.

                   *ii    Joint Venture Agreement, dated December 6, 1983,
                          between Empire Exploration, Inc. (now Seneca
                          Resources Corporation) and Empire 1983 Drilling Program
                          (Exhibit (10), Form U5S for fiscal year ended
                          September 30, 1984).

          (9)  Highland Forest Resources, Inc. (formerly Highland Land &
               Minerals, Inc.)

                    *i    Certificate of Incorporation, dated August 19, 1982
                          (Exhibit (11)i, Form U5S for fiscal year ended September
                          30, 1985).

                   *ii    By-Laws (Exhibit (11) ii, Form U5S for fiscal year
                          ended September 30, 1987).

                  *iii    Articles of Merger and Plan of Merger of Utility Constructors,
                          Inc. into Highland Land & Minerals, Inc. filed
                          October 1, 1999.  (Exhibit (9)iii, designated as Exhibit
                          EX-99-5 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1999.)

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

                   *iv    Articles of Amendment of the Articles of the Corporation,
                          dated June 8, 2000.  (Exhibit (9)iv, designated as Exhibit
                          EX-99-2 for EDGAR purposes, Form U5S for fiscal year
                          ended September 30, 2000.)

         (10)  Data-Track Account Services, Inc.

                    *i    Restated Articles of Incorporation, dated March 2, 1984
                          (Exhibit A-1, File No. 70-7512).

                   *ii    By-Laws (Exhibit A-2, File No. 70-7512).

         (11)  National Fuel Resources, Inc.

                    *i    Articles of Incorporation, dated January 9, 1991
                          (Exhibit (14)i, designated as Exhibit EX-3(a) for EDGAR
                          purposes, Form U5S for fiscal year ended September 30, 1992).

                   *ii    By-Laws (Exhibit (14)ii, designated as Exhibit EX-3(b)
                          for EDGAR purposes, Form U5S for fiscal year ended
                          September 30, 1992).

         (12)  Horizon Power, Inc. (formerly NFR Power, Inc.)

                    *i    Certificate of Incorporation, dated December 13, 1995.
                          (Exhibit (13)i, designated as Exhibit EX-3-1 for EDGAR
                          purposes, Form U5S for fiscal year ended September 30, 1999.)

                   *ii    By-Laws.  (Exhibit (13)ii, designated as Exhibit EX-3-2
                          for EDGAR purposes, Form U5S for fiscal year ended September
                          30, 1999.)

                   iii    Certificate of Amendment of the Certificate of Incorporation
                          of NFR Power, Inc., dated June 20, 2001.  Designated as
                          Exhibit ex99-5 for EDGAR purposes.

         (13)  Seneca Energy II, LLC

                     i    Articles of Organization, dated February 23, 2000.
                          Designated as Exhibit ex99-6 for EDGAR purposes.

                    ii    Amended and Restated Operating Agreement, dated March 1,
                          2000 (Confidential Treatment Requested)

         (14)  Model City Energy, LLC

                     i    Articles of Organization, dated February 11, 2000.
                          Designated as Exhibit ex99-7 for EDGAR purposes.

                    ii    Operating Agreement, dated March 1, 2000
                          (Confidential Treatment Requested)

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

         (15)  Energy Systems North East, LLC

                     i    Certificate of Formation, dated September 26, 2000.
                          Designated as Exhibit ex99-8 for EDGAR purposes.

                    ii    Limited Liability Company Agreement, dated September 26,
                          2000 (Confidential Treatment Requested).

         (16)  Horizon Energy Development, Inc.

                    *i    Certificate of Incorporation (Exhibit (13)i, designated
                          as Exhibit EX-3(a) for EDGAR purposes, Form U5S for
                          fiscal year ended September 30, 1995).

                   *ii    By-Laws (Exhibit (13)ii, designated as Exhibit EX-3(b)
                          for EDGAR purposes, Form U5S for fiscal year ended
                          September 30, 1995).

         (17)  Horizon Energy Holdings, Inc.

                    *i    Certificate of Incorporation, dated April 1, 1998.
                          (Exhibit (14)i designated as Exhibit EX99-1 for EDGAR
                          purposes, Form U5S for fiscal year ended September 30, 1998).

                   *ii    By-Laws.  (Exhibit (14)ii, designated as Exhibit EX99-2
                          for EDGAR purposes, Form U5S for fiscal year ended
                          September 30, 1998).

         (18)  Horizon Energy Development B.V. (formerly Beheeren-Beleggingmaatschappij
               Bruwabel B.V.)

                    *i    Articles of Incorporation (Exhibit (14), designated as
                          Exhibit EX-99-2 for EDGAR purposes, Form U5S for
                          fiscal year ended September 30, 1996).

                    ii    Notarial Record, dated December 4, 2001.  Designated as
                          Exhibit ex99-9 for EDGAR purposes.

         (19)  Horizon Energy Development, s.r.o. (formerly Power International, s.r.o.)

                    *i    Founding Notarial Deed, dated May 8, 1991 (Exhibit (15)i,
                          designated as Exhibit EX-99-9 for EDGAR purposes,
                          Form U5S/A for fiscal year ended September 30, 1996).

                   *ii    Notarial Deed, dated December 2, 1993 (Exhibit (15)ii,
                          designated as Exhibit EX-99-10 for EDGAR purposes,
                          Form U5S/A for fiscal year ended September 30, 1996).

                  *iii    Notarial Deed, dated June 28, 1996 (Exhibit (15)iii,
                          designated as Exhibit EX-99-11 for EDGAR purposes, Form
                          U5S/A for fiscal year ended September 30, 1996).

                   *iv    Notarial Deed, dated November 27, 1996 (Exhibit (15)iv,
                          designated as Exhibit EX-99-12 for EDGAR purposes, Form
                          U5S/A for fiscal year ended September 30, 1996).

   *  Incorporated herein by reference as indicated

EXHIBITS (Continued)

         (20)  Power Development, s.r.o.

                    *i    Founding Notarial Deed, dated May 4, 1994 (Exhibit (16)i,
                          designated as Exhibit EX-99-13 for EDGAR purposes,
                          Form U5S/A for fiscal year ended September 30, 1996).

                   *ii    Notarial Deed, dated June 28, 1996 (Exhibit (16)ii,
                          designated as Exhibit EX-99-14 for EDGAR purposes, Form
                          U5S/A for fiscal year ended September 30, 1996).

                  *iii    Notarial Deed, dated November 27, 1996 (Exhibit (16)iii,
                          designated as Exhibit EX-99-15 for EDGAR purposes,
                          Form U5S/A for fiscal year ended September 30, 1996).

         (21)  Teplarna Kromeriz, a.s.

                    *i    Statutes, dated June 1996 (Exhibit (17), designated as
                          Exhibit EX-99-16 for EDGAR purposes, Form U5S/A for
                          fiscal year ended September 30, 1996).

                    ii    Articles of Association, dated June 27, 2001.
                          Designated as Exhibit ex99-10 for EDGAR purposes.

         (22)  Teplarna Liberec, a.s.

                    *i    Founding Contract, dated November 11, 1994 (Exhibit (21)i,
                          designated as Exhibit EX99-12 for EDGAR purposes,
                          Form U5S/A for fiscal year ended September 30, 1997).

                   *ii    Notarial Record, dated November 11, 1994 (Exhibit (21)ii,
                          designated as Exhibit EX99-13 for EDGAR purposes,
                          Form U5S/A for fiscal year ended September 30, 1997).

                   iii    Articles of Association, dated June 21, 2001.
                          Designated as Exhibit ex99-11 for EDGAR purposes.

         (23)  Teplo Branany, s.r.o.

                    *i    Partnership Agreement, dated November 18, 1997.
                          (Exhibit (28)i, designated as Exhibit 99-4 for EDGAR
                          purposes, Form U5S for fiscal year ended September 30, 1998).

         (24)  Jablonecka teplarenska a realitni, a.s.

                    *i    Articles of Association.  (Exhibit (29)i, designated as
                          Exhibit EX99-5 for EDGAR purposes, Form U5S for
                          fiscal year ended September 30, 1998).

                          Note:  Jablonecka teplarenska a realitni, a.s. was sold
                          by United Energy, a.s. during the fiscal year ended
                          September 30, 2001.

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

         (25)  Lounske tepelne hospodarstvi, s.r.o.

                    *i    Notarial Records, dated November 12, 1998, January 6,
                          1999 and December 2, 1999.  Designated as Exhibit
                          EX-99-6 for EDGAR purposes, Form U5S for fiscal year
                          ended September 30, 1999.

         (26)  ENOP, s.r.o.

                    *i    Founders Deed, dated December 19, 1995.  (Exhibit (31)i,
                          designated as Exhibit EX99-8 for EDGAR purposes,
                          Form U5S for fiscal year ended September 30, 1998).

         (27)  United Energy, a.s.

                    *i    Notarial Record from Prvni severozapadni teplarenska, a.s.,
                          dated September 28, 1998.  (Exhibit (28) i,
                          designated as Exhibit EX-99-3 for EDGAR purposes,
                          Form U5S for fiscal year ended September 30, 2000.)

                   *ii    Notarial Record from Severoceske Teplarny, a.s. dated
                          September 28, 1998.  (Exhibit (28) ii, designated as
                          Exhibit EX-99-4 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 2000.)

                  *iii    Court Resolution, dated December 9, 1999.  (Exhibit (28) iii,
                          designated as Exhibit EX-99-5 for EDGAR
                          purposes, Form U5S for fiscal year ended September 30, 2000.)

                   *iv    Court Resolution, dated July 17, 2000.  (Exhibit (28) iv,
                          designated as Exhibit EX-99-6 for EDGAR purposes,
                          Form U5S for fiscal year ended September 30, 2000.)

                     v    Articles of Association, dated April 28, 1992, as amended
                          on June 28, 2001.  Designated as Exhibit ex99-12
                          for EDGAR purposes.

         (28)  Upstate Energy Inc. (formerly Niagara Energy Trading Inc.)

                    *i    Restated Certificate of Incorporation of Niagara Energy
                          Trading Inc., dated May 19, 1998.  (Exhibit (32)i,
                          designated as Exhibit EX99-9 for EDGAR purposes, Form
                          U5S for fiscal year ended September 30, 1998).

                   *ii    By-Laws as amended August 24, 1999.  (Exhibit (32)ii,
                          designated as Exhibit EX-99-7 for EDGAR purposes, Form
                          U5S for fiscal year ended September 30, 1999.)

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

         (29)  Roystone Gas Processing Plant Partnership

                    *i    Facility Construction, Ownership and Operating Agreement,
                          dated November 1, 1994.  (Exhibit (33)i, designated as
                          Exhibit EX-99-8 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1999.)

                   *ii    Ratification and Joinder of Roystone Gas Processing Plant
                          Facility Construction, Ownership and Operating
                          Agreement and Related Agreements, dated September 30, 1999.
                          (Exhibit (33)ii, designated as Exhibit EX-99-9
                          for EDGAR purposes, Form U5S for fiscal year ended
                          September 30, 1999.)

         (30)  Niagara Independence Marketing Company

                    *i    Certificate of Incorporation, dated September 17, 1997
                          (Exhibit (27)i, designated as Exhibit EX99-3 for EDGAR
                          purposes, Form U5S for fiscal year ended September 30, 1997).

                   *ii    By-Laws amended March 11, 1998.  (Exhibit (33)ii,
                          designated at Exhibit EX99-11 for EDGAR purposes, Form
                          U5S for fiscal year ended September 30, 1998).

                  *iii    Marketing Partnership Agreement among Coastal Gas Marketing
                          DirectLink Corp., MGS Marketing Corp., Niagara
                          Independence Marketing Company and Williams Independence
                          Marketing Company  (Exhibit (27)iii, designated as
                          Exhibit EX-99-5 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1997).

         (31)  Seneca Independence Pipeline Company

                    *i    Certificate of Incorporation of Empire Oklahoma, Inc.,
                          dated April 16, 1996  (Exhibit (28)i, designated as
                          Exhibit EX-99-6 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 1997).

                   *ii    Certificate of Amendment of Certificate of Incorporation
                          of Empire Oklahoma, Inc., dated July 24, 1997
                          (Exhibit (28)ii, designated as Exhibit EX-99-7 for EDGAR
                          purposes, Form U5S for fiscal year ended September
                          30, 1997).

                  *iii    By-Laws amended September 20, 1999.  (Exhibit (35)iii,
                          designated as Exhibit EX-99-10 for EDGAR purposes,
                          Form U5S for fiscal year ended September 30, 1999.)

         (32)  National Fuel Exploration Corp.

                    *i    Certificate of Amalgamation and Articles of Amalgamation,
                          dated June 16, 2000.  (Exhibit (33)i, designated
                          as Exhibit EX-99-7 for EDGAR purposes, Form U5S for fiscal
                          year ended September 30, 2000.)

                   *ii    By-Laws No. 1, dated April 28, 2000.  (Exhibit (33)ii,
                          designated as Exhibit EX-99-8 for EDGAR purposes,
                          Form U5S for fiscal year ended September 30, 2000.)

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

         (33)  Player Resources Ltd.

                     i    Certificate of Amalgamation and Articles of Amalgamation,
                          dated September 28, 2001.  Designated as Exhibit
                          ex99-13 for EDGAR purposes.

                    ii    By-laws No. 1, dated January 28, 1998.  Designated as
                          Exhibit ex99-14 for EDGAR purposes.

   C.    Indentures

         *   Indenture dated as of October 15, 1974, between the Company and The
             Bank of New York (formerly Irving Trust Company)
             (Exhibit 2(b) in File No. 2-51796).

         *   Third Supplemental Indenture dated as of December 1, 1982, to Indenture
             dated as of October 15, 1974, between the Company
             and The Bank of New York (formerly Irving Trust Company) (Exhibit
             4(a)(4) in File No. 33-49401).

         *   Tenth Supplemental Indenture dated as of February 1, 1992, to Indenture
             dated as of October 15, 1974, between the Company and The Bank of
             New York (formerly Irving Trust Company) (Exhibit 4(a), Form 8-K dated
             February 14, 1992 in File No. 1-3880).

         *   Eleventh Supplemental Indenture dated as of May 1, 1992, to Indenture
             dated as of October 15, 1974, between the Company and The Bank of
             New York (formerly Irving Trust Company) (Exhibit 4(b), Form 8-K dated
             February 14, 1992 in File No. 1-3880).

         *   Twelfth Supplemental Indenture dated as of June 1, 1992, to Indenture
             dated as of October 15, 1974, between the Company and The Bank of
             New York (formerly Irving Trust Company) (Exhibit 4(c), Form 8-K dated
             June 18, 1992 in File No. 1-3880).

         *   Thirteenth Supplemental Indenture dated as of March 1, 1993, to Indenture
             dated as of October 15, 1974, between the Company and The Bank of
             New York (formerly Irving Trust Company) (Exhibit 4(a)(14) in File
             No. 33-49401).

         *   Fourteenth Supplemental Indenture dated as of July 1, 1993, to Indenture
             dated as of October 15, 1974, between the Company and The Bank of
             New York (formerly Irving Trust Company) (Exhibit 4.1, Form 10-K for
             fiscal year ended September 30, 1993 in File No. 1-3880).

         *   Fifteenth Supplemental Indenture dated as of September 1, 1996 to Indenture
             dated as of October 15, 1974, between the Company and The Bank of
             New York (formerly Irving Trust Company) (Exhibit 4.1, Form 10-K for
             fiscal year ended September 30, 1996 in File No. 1-3880).

         *   Indenture dated as of October 1, 1999 between the Company and the
             Bank of New York (Exhibit 4.1, Form 10-K for the fiscal
             year ended September 30, 1999 in File No. 1-3880).

*  Incorporated herein by reference as indicated.

EXHIBITS (Continued)

         *   Officers Certificate Establishing Medium-Term Notes dated October 14,
             1999 (Exhibit 4.2, Form 10-K for the fiscal year ended September 30,
             1999 in File No. 1-3880).

         *   Amended and Restated Rights Agreement dated as of April 30, 1999
             between National Fuel Gas Company and HSBC Bank USA (Exhibit 10.2,
             Form 10-Q for the quarterly period ended March 31, 1999 in File No. 1-3880).

   D.        Tax Allocation Agreement pursuant to Rule 45(c).  Designated as
             Exhibit ex99-15 for EDGAR purposes.

   E.     *(1) Employee Relocation Manual filed pursuant to Rule 48(b) (Exhibit E(1),
               designated as Exhibit EX-99-9 for EDGAR purposes, Form U5S for fiscal
               year ended September 30, 1997).

          *(2) National Fuel Employee Computer Purchase Program filed pursuant to
               Rule 48(b).  (Exhibit E(2), designated as Exhibit EX99-15 for EDGAR
               purposes, Form U5S for fiscal year ended  September 30, 1998).

           (3) Independence Pipeline Company Unaudited Financial Statements for the
               quarter and year-to-date period ended December 31, 2000 and the
               quarter and year-to-date period ended September 30, 2001 filed pursuant
               toRule 16.  These documents are subject to a request for
               confidential treatment under Rule 104(b).

   F.        Schedules supporting items of this Report - None.

   G.      (1)  Organization chart showing relationship to Teplarna Kromeriz, a.s.,
                a foreign utility company.  Designated as Exhibit ex99-16 for
                EDGAR purposes.

           (2)  Organization chart showing relationship to United Energy, a.s.,
                a foreign utility company, and Teplarna Liberec, a.s., a foreign
                utility company.  Designated as Exhibit ex99-17 for EDGAR purposes.

           (3)  Organization chart showing relationship to Horizon Power, Inc.,
                an exempt wholesale generator, and Energy Systems North East, LLC,
                an exempt wholesale generator.  Designated as Exhibit ex99-18 for
                EDGAR purposes.

   H.      (1)  United Energy, a.s. Audited Financial Statements for the Calendar
                Year Ended December 31, 2000.  Designated as Exhibit ex99-19 for
                EDGAR purposes.

           (2)  Teplarna Liberec, a.s. Audited Financial Statements for the Calendar
                Year Ended December 31, 2000. Designated as Exhibit ex99-20 for EDGAR
                purposes.

           (3)  Teplarna Kromeriz, a.s. Audited Financial Statements for the Calendar
                Year Ended December 31, 2000.  Designated as Exhibit ex99-21 for
                EDGAR purposes.

*  Incorporated herein by reference as indicated.

   EXHIBITS (Concluded)

           (4)  Horizon Power, Inc. Audited Financial Statements for the Fiscal
                Year Ended September 30, 2001.  These financial
                statements will be filed by amendment when available.

           (5)  Energy Systems North East, LLC Unaudited Financial Statements
                for the Fiscal Year Ended September 30, 2001.  These
                financial statements will be filed by amendment when available.
* Incorporated herein by reference as indicated.
S I G N A T U R E
     The undersigned System company has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized pursuant to the requirements of the Public Utility Holding Company Act of 1935.

 	NATIONAL FUEL GAS COMPANY

By: /s/Joseph P. Pawlowski
Joseph P. Pawlowski, Treasurer
and Principal Accounting Officer	
Date: January 28, 2002 
EXHIBIT INDEX
ex99-1          Certificate of Limited Partnership, dated November 28, 1983, of
                Empire Exploration Company

ex99-2          Certificate of Limited Partnership, dated November 28, 1983, of
                Empire 1983 Drilling Program

ex99-3          Amendment of Certificate of Limited Partnership, dated December
                21, 1983, of Empire 1983 Drilling Program

ex99-4          Business Certificate for Partners, dated December 6, 1983, of
                Empire 1983 Joint Venture

ex99-5          Certificate of Amendment of the Certificate of Incorporation,
                dated June 20, 2001, of Horizon Power, Inc.

ex99-6          Articles of Organization, dated February 23, 2000, of Seneca
                Energy II, LLC

ex99-7          Articles of Organization, dated February 11, 2000, of Model City
                Energy, LLC

ex99-8          Certificate of Formation, dated September 26, 2000, of Energy
                Systems North East, LLC

ex99-9          Notarial Record, dated December 4, 2001, of Horizon Energy Development B.V.

ex99-10         Articles of Association, dated June 27, 2001, of Teplarna Kromeriz, a.s.

ex99-11         Articles of Association, dated June 21, 2001, of Teplarna Liberec, a.s.

ex99-12         Articles of Association, dated April 28, 1992, of United Energy, a.s.

ex99-13         Certificate of Amalgamation and Articles of Amalgamation,dated
                September 28, 2001, of Player Resources Ltd.

ex99-14         By-Laws No. 1, dated January 28, 1998, of Player Resources Ltd.

ex99-15         Tax Allocation Agreement pursuant to Rule 45(c)

ex99-16         Organization Chart Showing Relationship to Teplarna Kromeriz, a.s.

ex99-17         Organization Chart Showing Relationship to United Energy, a.s.

ex99-18         Organization Chart Showing Relationship to Horizon Power, Inc.

ex99-19         United Energy, a.s. Audited Financial Statements for the Calendar
                Year Ended December 31, 2000

ex99-20         Teplarna Llberec, a.s. Audited Financial Statements for the Calendar
                Year Ended December 31, 2000

ex99-21         Teplarna Kromeriz, a.s. Audited Financial Statements for the Calendar
                Year Ended December 31, 2000

CERTIFICATE OF LIMITED PARTNERSHIP

OF

EMPIRE EXPLORATION COMPANY
        Pursuant to Article 8 of the New York Partnership Law
        WE, THE UNDERSIGNED, desiring to form a limited partnership pursuant to the laws of the State of New York, certify as follows:
        1. The name of the Partnership is EMPIRE EXPLORATION COMPANY.
        2. The character of the business of the Partnership is to invest and become general partner in a partnership which will engage in oil and gas drilling, production, operation and marketing in Villenova Township, Chautauqua County, and Dayton Township, Cattaraugus County, New York, and the doing of any and all things incident there to or connected therewith.
        3. The principal place of business of the Partnership is at 10 Lafayette Square, Buffalo, New York, 14203.
        4. The name and place of residence of the General and Limited Partner are:
         The General Partner :
        EMPIRE EXPLORATION, INC.
        10 Lafayette Square
        Buffalo, New York 14203

         The Limited Partner :
        HERMAN P. LOONSK
        142 Bryant Street
        Buffalo, New York 14222
        5. The Partnership shall terminate on December 31, 2013, unless sooner terminated and dissolved upon the happening of any one of the following events:
        5.1. The withdrawal or incapacity of the General Partner.
        5.2 The sale or other disposition at one time of all or substantially all of the Partnership assets, by the consent of the Limited and General Partner.
        5.3 The election to dissolve the Partnership by the consent of the Limited and General Partner.
        5.4 The happening of any other event causing the dissolution of the Partnership under the laws of the State of New York.
        6. The Limited Partner has agreed to contribute cash to the Partnership in an amount equal to 5% of the Partnership’s capital contribution to Empire 1983 Drilling Program, a New York limited partnership for which the Partnership will act as general partner; but in no event will he be obligated to contribute more than $25,000.00. Such contribution shall be made no later than 30 days from November 30, 1983 or such other date as may be designated by the General Partner.
        7. No additional contribution needs to be made by the Limited Partner.
        8. No time has been agreed upon for the return of the contribution of the Limited Partner.
        9. The share of the profits or other compensation by way of income which the Limited Partner shall receive by reason of his contribution is 5%.
        10. The Partnership Agreement contains the following provisions relating to the right of the Limited Partner to substitute an assignee as contributor in his place:
        10.1 No sale, transfer or assignment of the Limited Partner's interest may be made if the transfer would result in the violation of any federal or state securities laws.
        10.2 The Limited Partner's interest may not be assigned or transferred to a minor or an incompetent except by will or intestate succession.
        10.3 No sale, assignment or transfer of the Limited Partner’s interest is permitted without the prior written consent of the General Partner, which may be unreasonably withheld.
        10.4 In the event of the death, incompentency, or bankruptcy of the Limited Partner, his executor, guardian, trustee, or legal representative, whichever the case may be, shall have all the rights of a Limited Partner for the purpose of settling or managing the estate and such power as the incapacitated Limited Partner possessed to assign all or any part of his interest. The death or incapacity of the Limited Partner shall not dissolve the Partnership.
        10.5 The Limited Partner does not have the right to substitute a purchaser, assignee, transferee, donee, heir, legatee, or other recipient of his interest in his place. All such successors may be admitted as Substituted Limited Partners only with the consent of the General Partner which may be withheld arbitrarily. Any such consent is binding and conclusive without the consent of the Limited Partners. All Substituted Limited Partners are required, if necessary, to execute an amendment to the Partnership Agreement.
        11. The Partnership Agreement does not provide for the admission of additional Limited Partners, other than as provided in Paragraph 10 above.
        12. There is no priority among Limited Partners.
        13. There is no right given for the Partners to continue the business of the Partnership on the Retirement or other legal incapacity of the General Partner.
        14. The Limited Partner is not entitled to demand and receive property other than cash in return for his contribution.
        15. The Limited Partner irrevocably constitutes and appoints the General Partner, as lawful attorney-in-fact with full power and authority in his name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents, instruments and conveyances as may be necessary or appropriate to carry out the provisions or purposes of the Partnership Agreement, including, without limitation:
                (i) all certificates and other instruments (including counterparts of the Partnership Agreement), and any amendment thereof, including any amendment substituting a Limited Partner pursuant to Section 7.03 thereof, which the General Partner deems appropriate to qualify or continue the Partnership as a limited Partnership (or a partnership in which the limited partners have limited liability comparable to that provided by the New York Uniform Limited Partnership Act) in the jurisdictions in which the Partnership may conduct business;
                 (ii) all instruments which the General Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of the Partnership Agreement, including amendments which have been approved by the consent of the Limited Partners as provided for therein; and
                (iii) all conveyances and other instruments which the General Partner deems appropriate to reflect the dissolution and termination of the Partnership.
        The appointment by the Limited Partner of the General Partner as attorney-in-fact shall be deemed to be a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner to act as contemplated by the Partnership Agreement in any filing and other action by it on behalf of the Partnership, and shall survive the incapacity of any person hereby giving such power and the transfer or assignment of all or any part of the interests of such person; provided, however, that in the event of the transfer by the Limited Partner of all of his interests, the foregoing power of attorney of a transferor Limited Partner shall survive such transfer only until such time as the transferee shall have been admitted to the Partnership as a Substituted Limited Partner and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.
        IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals this 28 th day of November, 1983.
                                         EMPIRE EXPLORATION, INC.
                                         By/s/ William A. Ross Vice-President
                                         General Partner

/s/Herman P. Loonsk
                                         HERMAN P. LOONSK
                                         Limited Partner
ACKNOWLEDGMENT
STATE OF NEW YORK )
COUNTY OF ERIE    )ss:
        On this 28 th day of November, 1983, before me personally came William A. Ross to me known, who, being duly sworn, deposes and says that he resides at 185 South Cayuga Road, Williamsville, NY that he is the Vice-President of EMPIRE EXPLORATION, INC., the corporation described herein and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
/s/William C. Hultman
                                              Notary Public

                                              WILLIAM C. HULTMAN
                                              Notary Public, State of New York
                                              Qualified in Erie County
                                              My Commission Expires March 30, 1984
ACKNOWLEDGMENT
STATE OF NEW YORK )
COUNTY OF ERIE    )ss:
        On this 28 th day of November, 1983, before me personally came HERMAN P. LOONSK, to me known, who, being duly sworn, deposes and says that he resides at 142 Bryant Street, Buffalo, New York, 14222 and that he executed the foregoing instrument.
/s/ William C. Hultman
                                              Notary Public

                                              WILLIAM C. HULTMAN
                                              Notary Public, State of New York
                                              Qualified in Erie County
                                              My Commission Expires March 30, 1984

CERTIFICATE OF LIMITED PARTNERSHIP

OF

EMPIRE 1983 DRILLING PROGRAM
        Pursuant to Article 8 of the New York Partnership Law
                WE, THE UNDERSIGNED, desiring to form a limited partnership pursuant to the laws of the State of New York, certify as follows:
        1. The name of the Partnership is EMPIRE 1983 DRILLING PROGRAM.
        2. The character of the business of the Partnership is to invest and become a partner in a joint venture which will engage in oil and gas drilling, production, operation and marketing in Villenova Township, Chautauqua County, and Dayton Township, Cattaraugus County, New York and do any and all things incident thereto or connected therewith.
        3. The principal place of business of the Partnership is at 10 Lafayette Square, Buffalo, New York, 14203.
        4. The name and place of residence of the general and limited partners are:
         The General Partner :
        EMPIRE EXPLORATION COMPANY
        10 Lafayette Square
        Buffalo, New York 14203

         The Limited Partner : (the "Original limited Partner")
        WILLIAM C. HULTMAN
        2956 Westwood Drive
        Grand Island, New York 14072
        5. The Partnership shall terminate on December 31, 2013, unless sooner terminated and dissolved upon the happening of any one of the following events:
        5.1 The withdrawal or incapacity of the General Partner, subject to reconstitution by election of Limited Partners holding 51% or more of all Partnership Units.
        5.2 The sale or other disposition at one time of all or substantially all of the Partnership assets by consent of the Limited Partners holding 51% or more of all Partnership Units.
        5.3 The election to dissolve the Partnership by the consent of the Limited Partners holding 51% or more of all Partnership Units.
        5.4 The happening of any other event causing the dissolution of the Partnership under the laws of the State of New York.
        5.5 The consent and election provided in paragraphs 5.2 and 5.3 above are conditional upon obtaining an opinion of counsel that the operation of such provisions is permitted by the New York Uniform Limited Partnership Act, will not impair the limited liability of the Limited Partners and will not adversely affect the classification of the Partnership as a partnership for Federal income tax purposes.
        6. The Original Limited Partner has contributed cash in the amount of Ten Dollars ($10.00) to the Partnership.
        7. No additional contribution needs to be made by the original Limited Partner.
        8. The time agreed upon for the return of the contribution of the Original Limited Partner is upon admission of other Limited Partners.
        9. The share of the profits or other compensation by way of income which the Original Limited Partner shall receive by reason of his contribution is 95%.
        10. The Partnership Agreement contains the following provisions relating to the right of a Limited Partner to substitute an assignee as contributor in his place:
        10.1 Upon the admission of one or more Limited Partners, the Original Limited Partner shall withdraw from the Partnership and be repaid the amount of his Capital Contribution and shall have no further liability to the Partnership.
        10.2 No sale, transfer or assignment of a Limited Partner’s Units may be made if the transfer would result in a termination of the Partnership under the Internal Revenue Code, as amended, or if the transfer would violate any federal or state securities laws applicable to the Partnership or the Units to be transferred or assigned.
        10.3 No assignment or transfer of all or any part of the Units is permitted to be made to a minor or an incompetent except by will or intestate succession.
        10.4 No sale, assignment or transfer of a Limited Partner’s Unit is permitted without the prior written consent of the General Partner, which may be unreasonably withheld.
        10.5 If a Limited Partner dies, his executor, administrator or trustee, or, if he is adjudicated incompetent, his committee, guardian or conservator, or, if he becomes bankrupt, the trustee or receiver of his estate, shall have all the rights of a Limited Partner for the purpose of settling or managing his estate and such power as the incapacitated Limited Partner possessed to assign all or any part of his Units and to join with such assignee in satisfying conditions precedent to such assignee becoming a Substituted Limited Partner. The death or incapacity of a Limited Partner shall not dissolve the Partnership.
        10.6 No Limited Partner has the right to substitute a purchaser, assignee, transferee, donee, heir, legatee, or other recipient of Units of a Limited Partner in his place. All such successors may be admitted as Substituted Limited Partners only with the consent of the General Partner which may be withheld arbitrarily. Any such consent is binding and conclusive without the consent of any of the Limited Partners. All Substituted Limited Partners or their attorney-in-fact are required to execute an amendment to the Partnership Agreement.
        11. The Partnership Agreement does not provide for the admission of additional Limited Partners, other than as provided in Paragraph 10 above, and as follows:
        The General Partner may admit additional Limited Partners who agree to contribute $50,000.00 (or more in increments of $5,000.00) to the Partnership on or before November 30, 1983, or such other date designated by the General Partner, by executing a subscription agreement and suitability statement acceptable to the General Partner. Such subscription shall be payable in full in cash, or in the alternative, a Limited Partner may pay not less than 50% of his subscription in cash and deliver a promissory note secured by a letter of credit and an assumption agreement in payment of the balance. Such subscriptions to the Partnership in the aggregate shall not exceed $10,000,000.00, but shall be at least $6,000,000.00 if any additional Limited Partners are admitted.
        12. There is no priority among Limited Partners.
        13. In the event of the death, bankruptcy, dissolution or other legal incapacity of the General Partner, the Partnership shall be dissolved subject to reconstitution at the election of the withdrawing General Partner or its legal representative and with the consent of Limited Partners holding 51% or more of all Partnership Units, with the successor General Partner as General Partner of such reconstituted Partnership.
        14. A Limited Partner is not entitled to demand and receive property other than cash in return for his contribution.
        15. Each Limited Partner irrevocably constitutes and appoints the General Partner, as lawful attorney-in-fact with full power and authority in his name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents, instruments and conveyances as may be necessary or appropriate to carry out the provisions or purposes of the Partnership Agreement, including, without limitation:
                (i) all certificates and other instruments (including counterparts of the Partnership Agreement), and any amendment thereof, including any amendment substituting a Limited Partner pursuant to Section 7.03 thereof, which the General Partner deems appropriate to qualify or continue the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability comparable to that provided by the New York Uniform Limited Partnership Act) in the jurisdictions in which the Partnership may conduct business;
                (ii) all instruments which the General Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of the Partnership Agreement, including amendments which have been approved by the consent of the Limited Partners as provided for therein; and
                (iii) all conveyances and other instruments which the General Partner deems appropriate to reflect the dissolution and termination of the Partnership.
        The appointment by the Limited Partners of the General Partner as attorney-in-fact shall be deemed to be a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner to act as contemplated by the Partnership Agreement in any filing and other action by it on behalf of the Partnership, and shall survive the incapacity of any person hereby giving such power and the transfer or assignment of all or any part of the Units of such person; provided, however, that in the event of the transfer by a Limited Partner of all of his Units, the foregoing power of attorney of a transferor Limited Partner shall survive such transfer only until such time as the transferee shall have been admitted to the Partnership as a Substituted Limited Partner and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.
        IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals this 28th day of November, 1983.
                                                     EMPIRE EXPLORATION COMPANY
                                                     By Empire Exploration, Inc.
                                                     By/s/ William A. Ross  Vice-President
                                                              General Partner
/s/ William C. Hultman
                                                              Original Limited Partner
ACKNOWLEDGMENT
STATE OF NEW YORK)
COUNTY OF ERIE   ) Ss:
        On this 28th day of November, 1983, before me personally came William A. Ross to me known, who being by me sworn, did depose and say that he resides at 185 Cayuga Road, Williamsville, NY that he is the Vice-President of EMPIRE EXPLORATION, INC., the General Partner of Empire Exploration Company; that it is the corporation described in and which executed the foregoing instrument on behalf of Empire Exploration Company; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.
/s/ Thomas F. Hewner
                                           Notary Public
                                           THOMAS F. HEWNER
                                           Notary Public, State of New York
                                           Qualified in Erie County
                                           My commission expires March 30, 1984
ACKNOWLEDGMENT
STATE OF NEW YORK)        Ss:
COUNTY  OF  ERIE )
On this 28th day of November, 1983, before me personally came WILLIAM C. HULTMAN, to me known, who, being duly sworn, deposes and says that he resides at 2956 Westwood Drive, Grand Island, New York, 14072 and that he executed the foregoing instrument.
/s/ Thomas Hewner
                                           Notary Public
                                           THOMAS F. HEWNER
                                           Notary Public, State of New York
                                           Qualified in Erie County
                                           My Commission Expires March 30, 1984

AMENDMENT OF
CERTIFICATE OF LIMITED PARTNERSHIP
OF
EMPIRE 1983 DRILLING PROGRAM
EMPIRE 1983 DRILLING PROGRAM, a Limited Partnership existing under the laws of the State of New York, pursuant to the provisions of Sections 113 and 114 of the New York Partnership Law, hereby amends its Certificate of Limited Partnership now of record in the Office of the Clerk of the County of Erie, State of New York, as follows:
     1. Paragraph 4 of the Certificate now on file is deleted in its entirety and the following is added in its place:
           "4. The name and place of residence of the General and Limited Partners are:
           The General Partner :

          Empire Exploration Company
          10 Lafayette Square
          Buffalo, New York 14203

           The Limited Partners :

          See Schedule A attached and made a part hereof."
     2. Paragraph 6 of the Certificate now on file is deleted in its entirety and the following is added in its place:

 	“6. The amount of capital contributed to the Partnership by each Limited Partner is set forth on the attached Schedule A. Unless otherwise specified on Schedule A, each Limited Partner paid 50% of his capital contribution in cash and the balance of his capital contribution consisted of an interest bearing promissory note secured by an irrevocable letter of credit and an Assumption Agreement, the forms of which are attached as exhibits hereto.”	

     3. Paragraph 7 of the Certificate now on file is deleted in its entirety and the following is added in its place:

 	“7. No additional contributions need to be made by any Limited Partner.”	

     4. Paragraph 8 of the Certificate now on file is deleted in its entirety and the following is added in it s place:

 	“8. No time has been agreed upon for the return of the contributions of the Limited Partners.”	

     5. Paragraph 9 of the Certificate now on file is deleted in its entirety and the following is added in its place:

 	“9. The profits or other compensation by way of income of the Partnership for each fiscal year of the Partnership is allocated among the Limited Partners 95%, pursuant to their sharing ratio, which is determined-by dividing the contribution of a Limited Partner by the sum of all Limited Partners’ contributions.”	

     The foregoing amendment to the Certificate of Limited Partnership now on file is hereby adopted by all members of the Limited Partnership, including those members added hereby, to be effective on the filing of this Amendment in the Office of the Clerk of the County of Erie, State of New York, and on such filing to become a provision of the Partnership Agreement and of the Certificate of Limited Partnership.
     In WITNESS WHEREOF, the undersigned have executed this Certificate of Amendment this 21st day of December, 1983,

General  Partner                        All Limited Partners
specified in Schedule A

EMPIRE   LOPATION COMPANY               By:  EMPIRE EXPLORATION COMPANY,
                                             their attorney-in-fact

By: Empire Exploration, Inc.
                                        By:  Empire Exploration, Inc.

By:/s/W. A. Ross
    Vice President                      By:/s/W. A. Ross
                                             Vice President
ACKNOWLEDGMENT
STATE OF NEW YORK:
COUNTY OF ERIE   :SS.
     On this 15 th day of December, 1983, before me personally came William A. Ross to me known, who being by me duly sworn, did depose and say that he resides at 185 South Cayuga Road, Williamsville, New York, that he is the Vice-President of EMPIRE EXPLORATION, INC., the General Partner of Empire Exploration Company; that it is the corporation described in and which executed the foregoing instrument on behalf of Empire Exploration Company; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order.

/s/William C. Hultman
                                Notary Public

                                WILLIAM C.  HULTMAN
                                Notary Public, state of New York
                                Filed in Erie County
                                My Commission Expires March 30. 1984
SCHEDULE A

EMPIRE 1983 DRILLING PROGRAM
LIMITED PARTNERS
Alfaro, Santiago B. (Cash)
144 West Market Street, West Chester, PA 19380
$50,000.00

Allen, Robert F. and Dorothy
105 Briarwood Circle, Oak Brook, Ill. 60521
$50,000.00

Allison, Gary & Pamela
16450 Eugenia Way, Los Gatos, CA 95030
$50,000.00

Altman, Harold
729 Berry Street, Lemont, PA 16851
$200,000.00

Andwell Partners
Patrick Welsh & Bruce Anderson
10 Lewellyn Rd Summit, N.J. 07901
$100,000.00

Axelrad, Maurice
7114 Fairfax Road, Bethesda, MD 20814
$50,000.00

Aylward, Theodore D.
1900 Aspen Street, New Port Richey, FL 33552
$500,000.00

Bacci, F. P.
695 San Martin Place, Los Altos, CA 94022
$50,000.00

Bartek, Frederic John
337 West 20th Street, Apt. 3B, New York, NY 10011
$50,000.00

Beck, Steven J.
1316 Memorial Drive, Calumet City, Il. 60409
$50,000.00

Bell, Robert L.
4914 Stonecrest Terrace, St. Joseph, MO 64506
$100,000

Bower, Joseph
Baker Bridge Road, Lincoln, MA 01773
$50,000.00

Burgess, Ernest A.
600 - 35th Avenue, Seattle, WA 98122
$50,000.00

C and C, Investment Partnership
R.D. Cohen, 11802 Willow Point Way, Tampa, FL 33624
C.E. Cernuda 4930 Andros Drive, Tampa, FL 33629
$50,000.00

Caldwell, Donald B.
Rt. 1, Box 164, Earlysville, VA 22936
$50,000.00

Carlton, Raymond R.
3105 S.E. Carlton Street, Portland, OR 97202
$50,000.00

Carr, Arthur
44 Donnelly Drive, Dover, MA 02030
$50,000.00

Carr, William Edgar
10348 Xylon Rd., S. Bloomington, Mn. 55438
$50,000.00

Cattaneo, Anthony & Alison
224 Humboldt Street, San Rafael, Ca. 94901
$50,000.00

Chabot, Donald F.
13 Vista Road, Englewood, CO 80110
$50,000.00

Chamlin, M&R
3 Elton Road, Morrisville, Pa. 19067
$50,000.00

Chapin, Roy, Jr. (Cash)
234 Touraine Road, Grosse Pointe, MI 48236
$50,000.00

Cheney Partnership
R.D. 5 Jamestown, New York 14701
$50,000.00

Ciejek, Stanley
277 Beauchamp Terrace, Chicopee, MA 01020
$50,000.00

Clock, Frances, T. Trust (Cash)
Clock, Edwin H. Co-Trustee P.O. Box 893, Belvedere, CA 94920
$50,000.00

Cohn, George A.
S. Tudor Place, Buffalo, NY 14222
$50,000.00

Cotman, Robert J.
1206 Traver Ann Arbor, MI 48105
$50,000.00

C & S Investment Co.
119 Meridan Drive, Newark, DE 19711
$50,000.00

Culp, Clyde
5301 Cherry Blossom Trail, Nashville, Tenn. 37215
$50,000.00

Cutler, Melvin S.
15 Eaglehead Terrace, Shrewsbury, MA 01545
$50,000.00

Dekle, Patrick
1902 Canyonwood Court, Val Rico, FL 33594
$50,000.00

DeRose, Michael J.
4245 Clardon Drive, Clarence, NY 14031
$50,000.00

DeRose Food Brokers, Inc.
891 Delaware Ave, Buffalo, New York 14209
$50,000.00

Diamond, Harvey & Vicki (Cash)
14 Emerald Drive, Morganville, NJ 07751
$50,000.00

Dossey, Frank C.
4728 S. 67th E. Ave., Tulsa, Oklahoma 74145
$50,000.00

Elorriaga, John A.
4011 SW Downs View Court, Portland, OR 97221
$50,000.00

Ferrell, William
1125 Park Ave., New York, New York 10128
$50,000.00

Fox, James & Susan (Cash)
168 Woodbridge Avenue, Buffalo, NY 14214
$50,000.00

Gango, George & Jacqueline M.
2931 Vale Court, Lake Oswego, OR 97034
$50,000.00

Garrison, Henry B.
6422 S.W. Berlingame Place, Portland, Oregon 97201
$50,000.00

Gentry, Randall E.
4133 Carrollwood Village Drive, Tampa, FL 33624
$50,000.00

Georgas, John (Cash)
835 Ponte Vedra Boulevard, Ponte Vedra, FL 32082
$100,000.00

Goff, Robert
8020 Peninsula Drive, Traverse City, MI 49684
$50,000.00

Gold, Bernard
67 Silver Birch Road, Longmeadow, MA 01106
$50,000.00

Goldberg, Betty Jane
19 Lakeside Street, Haverhill, MA 02173
$50,000.00

Goode, Denny & Susan
12912 Topping Est. Drive, St. Louis, MO 63131
$50,000.00

Graulich, William III (Cash)
278 W. Hobart Gap Road, Livingston, NJ 07039
$50,000.00

Grayson, Richard C.
139 N. Central Unit P., St. Louis, MO 63105
$50,000.00

Gregory, George
16 Greenaway, Buffalo, NY 14226
$50,000.00

Haarala, Peter A.
15588 So. 45th Street, Afton Mn. 55001
$50,000.00

Hanifin, Patrick
321 Holcomb Road, Springfield, MA 01118
$50,000.00

Hansen, John S.
3530 S.W. 55th Drive, Portland, Oregon 97203
$50,000.00

Hayden, Steven C.
15609 Highland Heights Dr., Minnetoftka, Mn. 55343
$50,000.00

Heiam, Albert E.
4210 Sunnyside Rd. Edina, Mn 55424
$50,000.00

Henley, Robert J.
157 Atlantis Boulevard, Atlantis, FL 33462
$50,000.00

Herro Investments Partnership Ltd.
5115 North Central Avenue, Phoenix, Arizona 85012
$75,000.00

Holce, Thomas J.
8195 SW Ernst Road, Portland, OR 97225
$50,000.00

Book, Oliver F.
2308 Cuma Prieta Lane, Menlo Park, CA 94025
$50,000.00

Hudson, William N. Jr.
4985 Sheridan Drive, Williamsville, NY 14221
$50,000.00

Hunter, David
103 River Road, Scarborough, NY 10010
$50,000.00

Hurley, John L.
1920 Elmwood Avenue, Buffalo, NY 14207
$50,000.00

Irwin, Michael J.
3505 Oak Lane
Altoona, Pa. 16602
$50,000.00

Jage, Patrick S. (Cash)
2666 Mavor Lane Highland Park, Ill. 60035
$100,000.00

Jensen, Frank E.
55 North Brooklyn Avenue, Wellsville, NY 14895
$50,000.00

Johnson, Robert C. (Cash)
1155 Park Avenue, New York, NY 10128
$50,000.00

Johnson, Arnold A.
RR 6, Box 63, Brainerd, MN 56401
$100,000.00

Jones, Paul A.
1803 Wagner Road, Glenview, IL 60025
$75,000.00

Jones, Paul C.
232 Amity Street, Amherst, MA 01002
$50,000.00

Joy, Harry E. (Cash)
698 Swamp Creek Drive, Jamesboro, GA 30236
$50,000.00

Kent, Jerol E.
9300 Hunting Valley, North Clarence, NY 14031
$50,000.00

Kohn, Eugene A.
14 East 90th Street, New York, New York 10028
$50,000.00

Kostrevagh, C. Andrew
2020 Saxonia Lane, Kalamazoo, MI 49008
$50,000.00

Kuzmer, L.K.
3504 N.E. Royal Oaks Drive, Vancouver, WA 98662
$50,000.00

Lentz, Henry G.
2045 North llth Street, Reading, PA 19604
$50,000.00

Lentz, Mark J.
2045 North llth St. Reading, Pa. 19604
$50,000.00

Lewis, Sheldon & Suzanne
3711 Rose Court, Lafayette, Ca. 94549
$50,000.00

Lindley, Homer "Chris" E.
12131 S.W. Country Lane, Santa Ana, CA 92705
$150,000.00

Loeb, Alexander
578 Sarah Lane, Unit 202 St. Louis, MO 63141
$100,000.00

Lotz, Benno & Waltraud (Cash)
604 So. Colfax Street, Warsaw, IN 46580
$50,000

Lowe, Otto
Taft Drive, Short Hills, NJ 07078
$50,000.00

Lyle, Joseph L. Jr.
8104 Atlantic Avenue, Virginia Beach, VA 23451
$50,000.00

March, Elizabeth 0.
150 Mill Creek Lane, Chagrin Falls, OH 44022
$5OiOOO.OO

Margolis, Ronald (Cash)
945 Elford Drive, Seattle, WA 98177
$50,000.00

Markewicz, Fred & Doris
Rt. 24, Box 312, Chester, NJ 07930
$50,000.00

Matarazzo, Stanley M. (Cash)
477 Woodbine Road, North Stamford, CT 06903
$50,000.00

Matthews, Donald J. (Cash)
477 Woodbine, Stamford, Ct. 06903
$50,000.00

Maxwell, J.L., Jr.
711 Lakeshore Drive, Walnut Creek, Goldsboro, N.C. 27530
$50,000.00

Miller, Alfred & Maria (Cash)
700 7th Street, S.W., Apt. 814, Washington, DC 20024
$75,000.00

Miller, Yale
7909 Cornell, St. Louis, MO 63130
$50,000.00

Murray, Richard E.
409 Heath Street, Chestnut Hill, MA 02167
$50,000.00

Myer, James (Cash)
11914 W. 82nd Terrace, Lenexa, KS 66215
$50,000.00

Namay, N. Richard Jr.
517 Rogers Street, Lowell, MA 01852
$50,000.00

Niewald, Paul H.
2208 W. 69th Street, Mission Hills, KS 66208
$50,000.00

Noco Unlimited
700 Grand Island Boulevard, Tonawanda, NY 14150
$1,000,000.00

Paolucci, D.A.
5202 Redwing Drive, Alexandria, VA 22312
$50,000.00

Parker, Stephen B.
4875 E. Lake Harriett Blvd., Minneapolis MN 55409
$50,000.00

Petty, John R.
37 W. Lenox Street, Chevy Chase, MD 20815
$50,000.00

Pfitzenmaier, Erwin
3136 Tower View Dr. Atlanta, Ga 30324
$50,000.00

Phillips, Wayne Jr.
1276 Parkside Place, Virginia Beach, VA 23454
$50,000.00

Pope, Harold W.
22 Eaton Road, Amherst, NH 03031
$50,000.00

Prior, Cornelius B.
547 Third Street, Brooklyn, NY 12215
$50,000.00

Rau Trust
2183 Bryant Street, Palo Alto, CA 94301
$50,000.00

Ravitch, Donald N.
851 Traeger Avenue, Ste. 200, San Bruno, CA 94066
$50,000.00

Reagan, Jimmie G.
3710 Longview Drive, Atlanta, GA 303Al
$50,000.00

Reber, Daniel A.
c/o Central Fidelity Bank, P.O. Box 700, Lynchburg, VA 24505
$50,000.00

Reeves, Donnelly C. (Cash)
106 Ardith Dr. Orinda, CA 94563
$100,000.00

Reilly, Walter F.
48 Huron Drive, Chatham, NJ 07928
$50,000.00

Roberts, Jim W.
61 Troy View, Williamsville, NY 14221
$50,000.00

Rodman, Sylvia Lyon
19 East 72nd Street, New York, NY 10021
$50,000.00

Rooney, Fred B.
1350 Highland Place N.W., Washington, DC 20008
$50,000.00

Sachsse, Eckart
270 Park Drive, Longmeadow, MA 01106
$50,000.00

Schilling, Norman A. (Cash)
32367A Hamilton Ct #103 Solon, Ohio 44139
$50,000.00

Sellon, John A.
494 Forest Avenue, Rye, NY 10580
$50,000.00

Sexton, Delbert A.
2928 Buccaneer Road, Virginia Beach, VA 23451
$50,000.00

Shelley, Rulon Gene (Cash)
116 Bent Road, Sudbury, MA 01776
$50,000.00

Shumlin, George
R.D.3, Putney, VT 05346
$100,000.00

Siegel, Lawrence R.
1292 Southfield Place, Virginia Beacn, VA 23452
$50,000.00

1600 Investors Company
1600 Main Place Tower Buffalo, New York 14202
$100,000.00

Slater, William M. Trust
130 Palmetto Dunes Circle, Naples, FL 33962
$50,000.00

Smith, Carson
3211 S. Austin Amarillo, TX 79109
$50,000.00

Spang-Houser Investments
11710 Palmer Drive, Tampa, FL 33624
$200,000.00

Stecher, Vera J.
201A Washington Avenue, Renssalaer, NY 12144
$50,000.00

Stevens Trust (Cash)
61 Berkely Street, Nashua, NH 03060
$50,000.00

Surdam, John' L.
76 Lincoln Parkway, Buffalo, NY 14222
$50,000.00

Swartzendruber, W. H. (Cash)
3455 Hill Circle, Colorado Springs, CO 80904
$50,000.00

Sweeny, Frederic H.
7129 Gleason Rd. Edina, MN 55435
$50,000.00

Swink, Warren L.
4907 Longview Way, El Cajon, CA 92020
$50,000.00

Sycamore Trust VII
William F. Frain
77 Richard Eger Drive, Holyoke, MA 01040
$150,000.00

Szymkiewicz, George
6074 Riding Court, San Jose, CA 95124
$50,000.00

Thomas, Jimmy N.
c/o Central Fidelity Bank, P.O. Box 700, Lynchburg, VA 24505
$50,000.00

Thordarson, Norman K.
9917 Kenwanda Drive, Snohomish, Washington 98290
$75,000.00

Tinstman, Dale
#40 Bishop Square 3901 South 27th Street, Lincoln, NB 68502
$50,000.00

Trelawney, John
261 Hamilton Avenue #215, Palo Alto, CA 94301
$50,000.00

Turcotte, Norman L.
480 Donald Street, Bedford, NH 03102
$50,000.00

Wagner, Bruce E.
2331 Sea Island Drive, Ft. Lauderdale, FL 33301
$50,000.00

Wagner, Louis E. (Cash)
8 Eltham Drive, Eggertsv,ille, NY 14226
$50,000.00

Walker, J. T.
450 S. Gulfview Bld., Unit 1106, Clearwater, FL. 33515
$50,000.00

Wallace, Frank & Lorice (Cash)
4610 South Zunis, Tulsa, Okla. 74105
$50,000.00

Wallach, Larry & Brenda
8005 N.W. 72nd Street, Tamarac, FL 33321
$50,000.00

Wardynski, Raymond F.
300 Brompton Road, Williamsville, NY 14221
$100,000.00

Warzecha, L.W.
1056 Beaumont Road, Berwyn, PA 19312
$50,000.00

Watterson, Robert A.
840 Stirling Street, Coatesville, PA, 19320
$50,000.00

Watts, Kaighan & Marian
Route 3, Box 1002, San Antonio, Texas 78218
$50,000.00

Weise, Theordore L.
2932 Ashmont, Germantown, TN 38138
$50,000.00

White, Victor A. (Trust No. 4)
8 - 172nd Place, Hammond, IN 46324
$50,000.00

Wight, Albert B.
Anders Lane, Nashua, NH 03060
$50,000.00

Williams, Robert G.
151 Morningside Drive, Longmeadow, MA 01106
$50,000.00

Wilson, Richard
338 Beacon St. #3 Boston, MASS 02116
$50,000.00

Wukits, Victor A.
103 Point Vue Drive, Pittsburgh, PA 15237
$50,000.00

Yellen, Stephen I.
91 Deborah Road, Newton, MA 02159
$50,000.00

EXHIBIT A

NEGOTIABLE PROMISSORY NOTE
$_______________________________            Dated:  ____________, 1983
     FOR VALUE RECEIVED, the undersigned (also referred to as “Maker”) promises to pay to the order of EMPIRE 1983 DRILLING PROGRAM, a limited partnership formed under the laws of the State of New York (the “Payee”), the principal sum of _________________, in lawful money of the United States plus interest (calculated on the basis of a 360 day year) on the unsaid principal balance hereof at the Prime commercial lending rate per annum of Empire of America FSA at Buffalo, New York as publicly announced to be in effect from time to time plus one-half percent (Prime plus 1/2%), but in no event to exceed the maximum amount permitted by law in the State of New York. The rate of interest shall change on the effective date of each and every chance in such prime rate, and the undersigned agrees that the Payee or subsequent holder shall not be obligated to notify the undersigned of any change in said prime rate. The calculation by the Payee or subsequent holder of this Promissory Note of the amount of accrued interest due on this Promissory Note shall be conclusive and binding on Maker.
     Payment of this Promissory Note shall be made at Empire of America FSA, One Main Place, Buffalo, New York 14202, or such other place as the holder hereof may direct in writing and this Promissory Note shall be due and payable as follows:

	Interest shall be accrued from the date this Promissory Note is first assigned or negotiated by the Payee and added to the unpaid principal balance hereof on January 1, 1984, and quarterly thereafter on the first day of April July, October and January of each year to and including October 1, 1985.		

	Accrued interest only from October 1, 1985 shall be due and payable on January 1, 1986 and quarterly thereafter on the first day of April, July, October and January of each year until the unpaid principal balance and interest is paid in full.		

	Unless sooner paid, the entire unpaid principal balance hereof plus accrued interest shall become due and payable on November 15, 1988.		

     The whole of said principal sum and interest shall be immediately due and payable at the option of the holder of this Promissory Note upon the failure of Maker to make any payment of principal or interest when due hereunder, or if the Letter of Credit, provided as additional security for this Promissory Note, is not renewed by the issuer thereof during the term of this Promissory Note. Maker of this Promissory Note shall have the right to repay in whole or in part at any time. No delay or failure on the part of the Payee or subsequent holder of this Promissory Note to exercise any right, option or remedy of the Payee or subsequent holder shall operate as a waiver thereof. If this Promissory Note or any interest payment becomes payable on a Saturday, Sunday or public holiday under the laws of the State of New York, then such payment shall be due on the next succeeding business day, and interest thereon shall be payable at the rate specified during such extension.
     For value received, to secure the payment of this Promissory Note, Maker has granted a security interest in his limited partnership interest in Empire 1983 Drilling Program and does hereby irrevocably, assign to the Payee and any subsequent holder of this Promissory Note, any and all cash distributions to be received by the undersigned as a Limited Partner of Empire 1983 Drilling Program, all to be at applied by the Payee and any subsequent holder of this Promissory Note in the following order:

(a)	First, to the payment of all accrued but unpaid interest upon said Promissory Note, whether or not due and payable, and second, to the payment of principal resulting from the addition of accrued interest thereto, if any, and then		

(b)	50% of the cash distribution remaining (if any), to the prepayment and reduction of the unpaid principal balance of this Promissory Note.		

Said assignment is limited to the amounts set forth in (a) and (b) above. When and if the unpaid principal balance and accrued interest are paid in full, the above assignment shall thereafter be null and void.
     The foregoing assignment secures, and the Maker agrees to pay on demand, all expenses (including reasonable expenses for legal services of every kind or other charges) of or incidental to, the sale or collection or realization upon the cash distributions so assigned or in any way related to the enforcement or protection of the rights of the Payee or subsequent holder hereunder. The Payee or subsequent holder may, without notice to Maker, sell, assign or transfer this note, with all the rights, remedies, security interests and liens provided for herein, and the Payee or subsequent holder shall thereafter be relieved and fully discharged from any liability or responsibilities herein.
     Maker hereby authorizes the Payee or subsequent holder of this Promissory Note to file one or more financing statements to perfect the security interests contained herein without Maker’s signature thereon, and Maker agrees to do, file, record, make, execute and deliver all such acts, deeds, notices, instruments and financing statements as the Payee or subsequent holder may request in order to perfect and enforce the rights to the Payee or subsequent holder herein.
     The Maker and each endorser hereby waives resentment, demand for payment, notice of dishonor, protest and notice of protest and of non-payment and consent is hereby given to any extension of this Promissory Note. This Note shall be governed by and construed under the laws of the State of New York.

                                        --------------------------------
                                        (Signature)

                                        --------------------------------
                                        Name (Please Print)

                                        --------------------------------
                                        Street and Number (Residence)

                                        --------------------------------
                                        City,  State  and Zip Code

 --------------------------------
 Signature guaranteed by:

EXHIBIT B

(Form of Irrevocable Letter of Credit)

(TO BE ON LETTERHEAD OF BANK)

Dated: ________________, 1983
Empire 1983 Drilling Program
10 Lafayette Square
New, York 14203

Gentlemen:
     At the request of and for the account of ___________________________________, We hereby open our clean Irrevocable Letter Of Credit _______________________ in favor for a sum not exceeding ___________________________________________ plus interest (calculated on the basis of a 360 day year) at the prime commercial lending rate per annum of Empire of America FSA at Buffalo, New York as publicly announced to be in effect from time to time plus one-half percent (Prime plus ½%), but in no event to exceed the maximum amount permitted by law in the State of New York, which is available to you upon presentation of one or more of your sight drafts drawn on us. This Letter of Credit may be transferred or assigned by you to any person, firm or corporation upon written notice to us of such transfer or assignment.
      This Credit applies to a Promissory Note payable to your order dated __________________________, 1983, executed by _____________________________________________________________ in the principal sum of $____________________and due and payable as follows:

	Interest shall be accrued from the date the Promissory Note is first assigned or negotiated by the Payee and added to the unpaid principal balance on January 1, 1984 and quarterly thereafter on the first day of April, July, October and January of each year to and including October 1, 1985.		

	Accrued interest only from October 1, 1985 shall be due and payable on January 1, 1986, and quarterly thereafter on the first day of April, July, October and January of each year until the unpaid principal balance and accrued interest is paid in full.		

	Unless sooner paid, the entire unpaid principal balance plus accrued interest shall become due and payable on November 15, 1988.		

     The rate of interest on the Promissory Note shall chance on the effective date of each and every change in such prime rate and the issuer of this Letter of Credit agrees that the holder of the note is not obligated to notify such issuer of any change in said prime rate. The calculation by the holder of this Letter of Credit of the amount of accrued interest due pursuant to the Promissory Note shall be conclusive and binding on the issuer of this Letter of Credit.
     Partial drawings are permitted under this Letter of Credit. Unless this Letter of Credit provides to the contrary below, sight drafts shall be accompanied by a signed statement from the holder that the amount set forth on the draft represents payments then due and unpaid pursuant to said Promissory Note. Drafts shall state “Drawn under ________________ Letter of Credit #_____________ dated _______________________________.
     Except so far as otherwise expressly stated, this Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1974 Revision) international Chamber of Commerce Publication No. 290.
     We hereby agree with drawers, endorsers and holders of all drafts drawn and delivered to us in compliance with the terms of this Credit that the same shall be duly honored on presentation to the drawee.
(INSERT EITHER CLAUSE "A" OR CLAUSE "B")

CLAUSE "A"
     All Drafts must be drawn and presented on or before December 31, 1988, which date is the expiration date of this Letter of Credit.
OR
CLAUSE "B"
     All Drafts must be drawn and presented on or before the expiration date of this Letter of Credit. The expiration date of the initial primary term of this Letter of Credit is __________________ provided nevertheless that this Letter of Credit shall be deemed automatically renewed and extended without amendment for successive periods of one year each unless at least sixty days prior to the expiration date of either the initial primary term or of any renewal term hereof, you receive written notice by registered mail (addressed to Empire of America FSA, One Main Place, Buffalo, New York 14202, or at such other address as shall be specified by the Holder of this Letter of Credit), that we elect not to have this Letter of Credit renewed for such additional one year period. This letter of Credit will have a final expiration date of December 31, 1988. You may draw under this Letter of Credit at any time within forty-five days after receipt by you of such notice of non-renewal for the total unpaid principal balance of said Promissory Note plus accrued interest even though the same is not yet due and payable pursuant to the terms of said Note.

                                        Very truly yours,

                                        ---------------------------------
                                        Authorized Signature Bank Officer
EXHIBIT C

ASSUMPTION AGREEMENT
     The undersigned, in consideration of credit given by EMPIRE OF AMERICA FSA (the “Bank”), having an address of One Main Place, Buffalo, New York 14202, to Empire 1983 Drilling Program, a New York limited partnership (the ‘Borrower’), having a mailing address at 10 Lafayette Square, Buffalo, New York 14203, which extension of credit is beneficial to and desired by the undersigned and to induce the Bank to extend such credit, hereby agrees to pay and to assume primary and personal liability for the prompt payment when due of a Proportionate share of any and all liability or indebtedness of the Borrower to the Bank now existing and hereafter arising under a certain promissory note in the principal amount of not more than FIVE MILLION DOLLARS ($5,000,000) dated effective November 30, 1983 (Letter of Credit Loan), such proportionate share shall be limited to the principal amount of ______________________DOLLARS ($___________________) plus interest at the prime commercial lending rate per annum of Empire of America FSA at Buffalo, New York as publicly announced to be in effect from time to time plus one-half percent (Prime plus 1/2%), but in no event to exceed the maximum amount permitted by law in the State of New York, less all amounts credited thereon (all or which is hereinafter called the “Indebtedness”) irrespective of any invalidity of the Indebtedness, the unenforceability thereof, or the insufficiency, invalidity, impairment or unenforceability of any security which might be given therefor by the Borrower. The undersigned’s share of or interest accrued on such Letter of Credit Loan is determined by taking the ratio which the outstanding balance on his Indebtedness from time to time bears to the outstanding balance on the aggregate Letter of Credit Loan. The rate of interest shall chance or. the effective date of each and every change in such or prime rate and the undersigned agrees the Borrower and the Bank shall not be obligated to notify the undersigned of any change in said prime rate. The calculation by the Borrower or the Bank of the amount of accrued interest due pursuant to this Assumption Agreement shall be conclusive and binding on the undersigned.
     Payment of the indebtedness shall be made at Empire of America FSA, One Main Place, Buffalo, New York, 14202, or such other place as the Bank may direct in writing and, the Indebtedness shall be due and payable as follows:

	Interest shall be accrued from the date the Promissory Note is first assigned or negotiated by the Partnership, and added to the unpaid principal balance hereunder on January 1, 1984 and quarterly thereafter on the first day of April, July, October and January of each year to and including October 1, 1985.		

	Accrued interest only from October 1, 1985 shall, be due and payable on January 1, 1986, and quarterly thereafter on the first day of April, July, October and January of each year until the unpaid principal balance and accrued interest is paid in full.		

	Unless sooner paid, the entire unpaid principal balance hereunder plus accrued interest shall become due and payable on November 15, 1988.		

     The whole of said Indebtedness shall become immediately due and payable at the option of the Bank upon the failure the undersigned to make any payment of the Indebtedness when due hereunder.
     The Indebtedness represented hereby will be secured by an assignment to the Bank as collateral security of a certain promissory note executed and delivered by the undersigned in payment of a portion of his subscription to Empire 1983 Drilling Program. Any payment of principal or interest made on.such Promissory Note shall be credited against the Indebtedness outstanding hereunder, and the Indebtedness reduced accordingly.
     The Indebtedness may be prepaid in whole or in part at any time without penalty at which time the Promissory Note and underlying Letter of Credit shall be released or reduced accordingly.
     For value received, to secure the payment of the Indebtedness, the Undersigned does hereby assign to the Bank, any and all cash distributions to be received by the undersigned as a Limited Partner of Empire 1983 Drilling Program, all to be applied by the Bank in the following order:

(a)	First to the payment of all accrued but unpaid interest upon said Assumption Agreement, whether or not due and payable, and second, to the payment of principal resulting from the addition Of accrued interest thereto, if any, and then		

(b)	50% of the cash distribution remaining (if any), to the prepayment and reduction of the unpaid principal balance of this Assumption Agreement.		

Said assignment is limited to the amount s set forth in (a) and (b) above. When and if the unpaid principal balance and accrued interest are paid in full, the above assignment shall thereafter be null and void.
     The foregoing assignment secures, and, the undersigned agrees to pay on demand, all expenses (including reasonable expenses for legal services of every kind or other charges) of or incidental to, the sale or collection, or realization upon, the cash distributions so assigned or in any way related to the enforcement or protection of the rights of the Bank hereunder.
     The undersigned hereby authorizes the Bank to file one or more financing statements to perfect the security, interests granted herein without the undersigned’s signature thereon, and the undersigned agrees to do, file, record, make, execute and deliver all such acts, deeds, notices, instruments and financing statements as the Bank may request to order to perfect and enforce the rights to the Bank herein.
     The undersigned’s obligation hereunder is an absolute, unconditional and continuing assumption of primary and personal liability for payment of the Indebtedness and any renewals, consolidations, modifications, and extensions thereof and, substitution therefor. If this Assumption Agreement is execute by more than one person, the obligation of each of the undersigned will be joint and several. And, notices to the Bank hereunder will be effective only if delivered, in writing, to the Bank.
     The Bank will not be requires, before enforcing the liability of the undersigned hereunder, to exhaust the Bank’s remedies against the Borrower or any other person liable on the Indebtedness or attempt to collect on or resort to any security or the indebtedness. Payment by the undersigned hereunder will not entitle the undersigned by contribution, indemnification, subrogation or otherwise to any payment by the Borrower until such time as the Bank
has been paid in full amounts owing and payable to the Bank by the Borrower, contingently, absolutely or otherwise All moneys available to the Bank for application in payment or reduction of the Indebtedness may be applied by the Bank in such manner and in such amounts and at such time or times as the Bank may see fit to the payment or reduction of such of the Indebtedness as the Bank may elect.
     The undersigned hereby waives presentment, demand for payment, protest and notice of protest and nonpayment of the Indebtedness and notice of acceptance of this Assumption Agreement by the Bank and consents to any and all extensions, renewals, substitutions, consolidations or modifications of the Indebtedness, and the release of any or all collateral securing payment of the Indebtedness, all without notice to the undersigned.
     The Bank’s rights under this Assumption Agreement may be assigned, in whole or part, in conjunction with the assignment of the Indebtedness or any portion thereof. This Assumption Agreement will be binding on the undersigned and the undersigned’s heirs, personal representatives, successors and assigns and will inure to the benefit of the Bank and the Bank’s successors and assignee. All of the Bank’s rights hereunder are cumulative and not alternative. This instrument is executed and delivered as an incident to lending transaction negotiated and consummated in Buffalo, New York is to be construed according to the laws of the State of New York.
     The undersigned hereby represents and warrants that the undersigned is a limited partner in the Empire 1983 Drilling Program.
     The undersigned will not transfer, assign, convey, dispose or encumber all or any, part of the undersigned’s interest in the Borrower except with the Bank’s prior written consent.
     Any suit, action or proceeding against the undersigned with this Assumption agreement, the loan, the notes or any judgement entered by any court in respect thereof may be brought in the courts of the State of New York, County of Erie, or in the United States Courts located in the State of New York as any bank or agent thereof in its sole discretion may elect, and the undersigned hereby submits to the nonexclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding. The undersigned hereby further irrevocably consents to the service of process in any
suit, action or proceeding arising out of or relating to this Assumption Agreement or any note brought in the courts located in the State of New York, County of Erie, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
     The undersigned hereby appoints Empire Exploration Company, a New York Limited Partnership, general partner of the Borrower, as attorney-in-fact to do and perform, any and all acts necessary on behalf of the undersigned so that the undersigned’s proportionate share of the Borrower’s indebtedness wi11 be assumed in accordance with the terms of this Assumption Agreement.
     This Assumption Agreement is in addition to all other Assumption Agreements given by the undersigned to the Bank. This Assumption Agreement can be modified only by a written instrument signed by the party to be charged hereby.
     Executed and delivered effective as of the _________day of ____________ 1983.

                                        ---------------------------
                                        Financing Limited Partner

Signature guaranteed by:

------------------------

BUSINESS CERTIFICATE FOR PARTNERS
     The undersigned do hereby certify that they are conducting or transacting business as members of a partnership under the name or designation of Empire 1983 Joint Venture at 1O Lafayette Square, City of Buffalo, County of Erie, in the Township of Villenova, County of Chautauqua, and in the Township of Dayton, County of Cattaraugus, State of New York, and do further certify that the full names of all the persons Conducting or transacting such partnership including the full names of all partners with the residence address of each such person, are as follows:
·	Empire Exploration, Inc., a New York corporation,10 Lafayette Square, Buffalo, New York 14202.

·	Empire 1983 Drilling Program, a New York limited partnership, 10 Lafayette Square, Buffalo, New York 14202.

     IN WITNESS WHEREOF, the undersigned have this day of December, 1983, made and signed this Certificate.
EMPIRE 1983 DRILLING PROGRAM EMPIRE EXPLORATION
BY: Empire Exploration Company
By: Empire Exploration, Inc.

By: /s/ William A. Ross
Vice President

EMPIRE EXPLORATION, INC.
By: /s/ William A. Ross
Vice President
STATE OF NEW YORK:
COUNTY OF ERIE : SS.
     On this 6 th day of December, 1983, before me personally came WILLIAM A. ROSS, to me known, who, being by me duly sworn, did depose and say that he resides at 185 South Cayuga Drive, Williamsville. New York, that he is the Vice President of Empire Exploration, Inc., the corporation described in and, which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the board of directors of said corporation, and, that he signed his name thereto, by like order.
/s/ William C. Hultman
                                   Notary Public
                                   WILLIAM C. HULTMAN
                                   Notary Public, State of New York
                                   Qualified in Erie County
                                   My commission expires March 30, 1984

CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
NFR POWER, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
Filer: James Peterson
10 Lafayette Square
Buffalo, New York 14203
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
NFR POWER, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
The undersigned, being the president and the secretary of NFR Power, Inc., do hereby certify and set forth:
·	The name of the corporation is NFR Power, Inc.

·	The certificate of incorporation of NFR Power, Inc. was filed by the Department of State on the 14th day of December, 1995.

·	The certificate of incorporation of NFR Power, Inc., is hereby amended in the following respects:

·	Paragraph (1) of the certificate of incorporation of NFR Power, Inc., which sets forth the name of the corporation, is hereby amended to read:

·	The name of the corporation is Horizon Power, Inc.

·	The statement of the certificate of incorporation of NFR Power, Inc., relating to the post office address to which the Secretary of State shall mail a copy of any process against the corporation served upon him is hereby stricken and the following statement is substituted in lieu thereof:

“The post office address within the State of New York to which the Secretary of State shall mail a copy of any process against the corporation served upon him is c/o Corporation Service Company, 80 State Street, Albany, New York 12207.”

·	The following statement of designation of registered agent is added to the certificate of incorporation:

“The name and address of the registered agent of the corporation are Corporation Service Company, 80 State Street, Albany, New York 12207. Said registered agent is to be the registered agent upon which process against the corporation may be served.”

·	These amendments to the certificate of incorporation of NFR Power, Inc. were authorized, pursuant to sections 803(a) and 615(a) of the Business Corporation Law, by vote of the board, followed by unanimous written consent, setting forth the action so taken, signed by the holders of all outstanding shares entitled to vote thereon.

IN WITNESS WHEREOF, the undersigned have executed and signed this certificate this 20th day of June, 2001.
/s/ B. H. Hale
------------------------------------

B.H. Hale, President

/s/ W. M. Petmecky
------------------------------------

W.M. Petmecky, Secretary

STATE OF NEW YORK
COUNTY OF ERIE
     B.H. Hale, being first duly sworn, deposes and says that he is the President of NFR Power, Inc., that he has read the foregoing certificate and knows the contents thereof and that the statements therein contained are true.
                                                                       /s/ B. H. Hale
                                                                       --------------------------
Sworn to me this 20th
day of June, 2001

/s/ James R. Peterson
------------------------------------
Notary Public

James R. Peterson
Notary Public, State of New York
Qualified in Erie County
My Commission Expires Aug. 31, 2001

ARTICLES OF ORGANIZATION
OF
SENECA ENERGY II, LLC
Under Section 203 of the
Limited Liability Company Law
           Filed by:       David V. Sanchez, Esq.
                           Amigone, Sanchez, Mattrey & Marshall, LLP
                           1300 Main Place Tower
                           Buffalo, New York  14202
                           (716) 852-1300
ARTICLES OF ORGANIZATION
OF
SENECA ENERGY II, LLC
Under Section 203 of the
Limited Liability Company Law
         FIRST: The name of the limited liability company is:
SENECA ENERGY II, LLC
         SECOND: The county within this state in which the office of the limited liability company is to be located is: Erie
         THIRD: The Secretary of State is designated as agent of the limited liability company upon whom process against it may be served. The post office address within this state to which the Secretary of State shall mail a copy of any process against the limited liability company served upon him or her is: 9678 Main Street, Clarence, New York 14031.
         FOURTH: The effective date of the Articles of Organization is upon filing.
         FIFTH: The limited liability company is to be managed by one or more members. No Member shall be liable for the debts, obligations or liabilities of the LLC to a third party unless the Member agrees in writing to be liable. No Member has the authority or power to act for or on behalf of, to bind, or to incur any liability on behalf of the LLC except as provided in the Operating Agreement of the Company.
         IN WITNESS WHEREOF, this Certificate has been subscribed this 23 rd day of February 2000, by the undersigned who affirms that the statements made herein are true under penalties of perjury.
/s/David V. Sanchez
David V. Sanchez, Organizer

ARTICLES OF ORGANIZATION
OF
MODEL CITY ENERGY, LLC
Under Section 203 of the
Limited Liability Company Law
         Filed by:         David V. Sanchez, Esq.
                           Amigone, Sanchez, Mattrey & Marshall, LLP
                           1300 Main Place Tower
                           Buffalo, New York  14202
                           (716) 852-1300
ARTICLES OF ORGANIZATION
OF
MODEL CITY ENERGY, LLC
Under Section 203 of the
Limited Liability Company Law
FIRST: The name of the limited liability company is:
MODEL CITY ENERGY, LLC
SECOND; The county within this state in which the office of the limited liability company is to be located is:
THIRD: The Secretary of State is designated as agent of the limited liability company upon whom process against it may be served. The post office address within this state to which the Secretary of State shall mail a copy of any process against the limited liability company served upon him or her is:
FOURTH: The effective date of the Articles of Organization is upon filing.
FIFTH: The limited liability company is to be managed by one or more members. No Member shall be liable for the debts, obligations or liabilities of the LLC to a third party unless the Member agrees in writing to be liable. No Member has the authority or power to act for or on behalf of, to bind, or to incur any liability on behalf of the LLC except as provided in the Operating Agreement of the Company.
IN WITNESS WHEREOF, this Certificate has been subscribed this 11 th day of February 2000, by the undersigned who affirms that the statements made herein are true under penalties of perjury.
/s/David V. Sanchez
David V. Sanchez, Organizer

CERTIFICATE OF FORMATION
of
ENERGY SYSTEMS NORTH EAST, LLC
This Certificate of Formation of ENERGY SYSTEMS NORTH EAST, LLC (the "Company") is being executed by the undersigned authorized person for the purpose of forming a limited liability company pursuant to the Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq

First:	The name of the Company is:

Energy System-is North East, LLC	

Second:	The registered office of the Company in the State of Delaware is located at 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801 and the name of the registered agent at that address is The Corporation Trust Company.	

IN WITNESS WHEREOF, the undersigned, an authorized person of the Company, has caused this Certificate of Formation to be duly executed as of the 26 th day of September, 2000.
                                         DELAWARE CORPORATE SERVICES INC.

                                         By:/s/ Jeanette LaVecchia

                                         Name:    Jeanette LaVecchia
                                         Title.  Vice President

COUNTERPART
Page One----------------------------------------------------------------------------------------------NZ 943/2001
-------------------------------------------------------------------------------------------------------- N 1024/2001
N o t a r i a l R e c o r d
written on the fourth of December of the year two thousand one (December 4, 2001) in front of me, JUDr. Miroslav Novák, the notary, with notary’s office in Prague, in my notary’s office in Prague 1, Dlouhá 16, attended by the below participant, who declared that he is competent to undertake legal acts, who’s identity was proved to me by a valid identity card, namely:
the company Horizon Energy Development B.V., registered office 1017PP Amsterdam, Leidsekade 98, the Netherlands, recorded in the Commercial Register at the Chamber of Commerce and Industry in Amsterdam, the Netherlands, under No. 33282533, acting through its Executive Director Gerald Thomas Wehrlin, born on January 1, 1938, resident at 130 Ranch Trail W., 14221 Williamsville NY, U.S.A., who declared he is competent to undertake legal acts, who's identity was proved by a valid official identity card, and who his authorization to act as a single person on behalf for the company proved by the certificate of incorporation of the company Horizon Energy Development B.V. from the Commercial Register.
/Certificate of incorporation of the company Horizon Energy Development B.V. from the Commercial Register is the integral Appendix No. One to this Notarial Record./
The above mentioned company Horizon Energy Development B.V. is the sole partner of the business company with the commercial name Horizon Energy Development, s.r.o., registered office Praha 1, Maiselova 15, Company Identification Number 40612490, recorded in the Commercial Register at the Municipal Court in Prague, file C, insert 2064, which is proved by the certificate of incorporation from the Commercial Register at the Municipal Court in Prague, file C, insert 2064, dated October 17, 2001, certificate of incorporation No. 157825/2001, where the above mentioned company Horizon Energy Development B.V. is recorded as the sole partner of the business company with the commercial name Horizon Energy Development, s.r.o.
/Certificate of incorporation of the company Horizon Energy Development, s.r.o. from the Commercial Register is the integral Appendix No. Two to this Notarial Record./
The above mentioned participant asked me today, i.e. on December 4, 2001, to write this:
---------------------------------------------d e c i s i o n --------------------------------------------
of the sole partner
made during the performance of competencies of the General Meeting pursuant to
Section 132 of the Commercial Code
in the business company with the commercial name Horizon Energy Development, s.r.o.
On today's date, i.e. on December 4, 2001, the sole partner adopted the following decisions pursuant to Section 132 of the Commercial Code:
1. With regard to the fact that on June 26, 2001 the sole partner decided to use the 2000 net profit to cover accumulated losses of previous years in full amount, i.e. in the amount of CZK 31,429,730 (in words thirty one million four hundred twenty nine thousand seven hundred thirty Czech crowns) and forgot to create a contribution to the reserve fund in compliance with Section 124 of the Commercial Code when making this decision, thus the sole partner, on today’s date, i.e. on December 4, 2001, corrected his decision dated June 26, 2001 as follows:
Page Two
Net accountable profit of the company for 2000 in the amount of CZK 31,429,730 (in words thirty one million four hundred twenty nine thousand seven hundred thirty Czech crowns) shall be used as follows:
a) contribution to reserve fund of 5% (in words five per cent) of the accountable profit of the company for 2000. The amount of contribution for year 2000 equals thus CZK 1,560,950 (in words one million five hundred sixty thousand nine hundred fifty Czech crowns).
b) the rest of profit in the amount of CZK 29,868,780 (in words twenty nine million eight hundred sixty eight thousand seven hundred eighty Czech crowns) shall be used to cover part of accumulated losses of previous years.
2. decided pursuant to the provision of Section 146 of the Commercial Code to decrease registered capital of the business company with the commercial name Horizon Energy Development, s.r.o. , namely from the existing CZK 89,499,000 (in words eighty nine million four hundred ninety nine thousand Czech crowns) by CZK 88,499,000 (in words eighty eight million four hundred ninety nine thousand Czech crowns) to the new amount of registered capital, namely CZK 1,000,000 (one million Czech crowns), provided, by this amount of CZK 88,499,000 (in words eighty eight million four hundred ninety nine thousand Czech crowns) the amount of contribution of the sole partner of this business company with the commercial name Horizon Energy Development, s.r.o., i.e. of the company Horizon Energy Development B.V., registered office 1017PP Amsterdam, Leidsekade 98, the Netherlands, recorded in the Commercial Register at the Chamber of Commerce and Industry in Amsterdam, the Netherlands, under No. 33282533, is decreased, and thus the amount of his contribution in this business company shall be CZK 1,000,000 (in words one million Czech crowns) after the decrease.
Of the amount of CZK 88,499,000 (in words eighty eight million four hundred ninety nine thousand Czech crowns), by which registered capital of this business company with commercial name Horizon Energy Development, s.r.o. shall decrease:
·	its part amounting to CZK 45,000,000 (in words forty five million Czech crowns) shall be paid to the sole partner of this business company Horizon Energy Development, s.r.o., i.e. to the company Horizon Energy Development B.V.,
·	and its remaining part amounting to CZK 43,499,000 (forty three million four hundred ninety nine thousand Czech crowns) shall be transferred to the temporary capital fund, as an additional contribution for creation of equity pursuant to Section 121 (2) of the Commercial Code. This additional contribution, or its part, shall be paid to the partner after accumulated loss from previous years is settled and the company creates assets in such an amount so that after the additional contribution is returned to the partner, an equity in an amount exceeding company’s registered capital remains to the company,
under proviso that:

the decrease of registered capital from the existing amount of CZK 89,499,000 (in words eighty nine million four hundred ninety nine thousand Czech crowns) by the amount of CZK 88,499,000 (in words eighty eight million four hundred ninety nine thousand Czech crowns) to the new amount of registered capital, namely CZK 1,000,000 (in words one million Czech crowns), shall be effective as of the date of record of the new amount into Commercial Register as per Section 147 (3) of the Commercial Code, and only following the date of the record it will be possible to pay the amount of CZK 45,000,000 (forty five million Czech crowns) to the sole partner
Page Three
of this business company Horizon Energy Development, s.r.o., i.e. to the company Horizon Energy Development B.V., and to transfer the amount of CZK 43,499,000 (forty three million four hundred ninety nine thousand Czech crowns) to the temporary capital fund, as is mentioned in paragraph 2 of this decision.
This Notarial Record was written about this, interpreted to the participant, approved by him fully and then signed in his own hand. Then I, the notary, signed it and imprinted thereupon the official seal.
                                             Gerald Thomas Wehrlin, s.s.
                                             JUDr. Miroslav Novak, s.s.
                                                       notary
                                   L.S.

Articles of Association

of

Teplarna Kromeriz, a.s.

a full version of the Articles of Association of Teplarna Kromeriz, a. s.

with its registered office in Kromeriz, Na Sadkach 3572, post code 767 01

as follows from the made changes

based on a decision of the single shareholder acting as the General Meeting
as of June 27, 2001
__________

Lubos Jarolimek

Chairman of the Board of Directors

Teplarna Kromeriz, a.s.
TABLE OF CONTENTS:
I. BASIC PROVISIONS...........................................................................................1
   Article 1..................................................................................................1
   Commercial Name and the Registered Office of the Company ..................................................1
   Article 2..................................................................................................1
   Scope of Business..........................................................................................1
II. REGISTERED CAPITAL OF THE COMPANY AND SHARES..............................................................2
   Article 3..................................................................................................2
   The Company Registered Capital and the Extent to which It Has Been Paid Up and the Method of
   Paying Up the Issue Price of Shares Including the Consequences of Breaching the Duty to Pay Up
   the Subscribed Shares On Time..............................................................................2
   Article 4..................................................................................................2
   Shares.....................................................................................................2
   Article 5..................................................................................................4
   List of Shareholders.......................................................................................4
III. INCREASE AND REDUCTION OF THE REGISTERED CAPITAL OF THE COMPANY .........................................4
   Article 6..................................................................................................4
   Increase of the Registered Capital of the Company .........................................................4
   Article 7..................................................................................................5
   Rules of Procedure of the Company Registered Capital Increase..............................................5
   Article 8..................................................................................................6
   Reduction of the Company Registered capital................................................................6
   Article 9..................................................................................................8
   Rules of Procedure of the Company Registered Capital Reduction.............................................8
IV. SHAREHOLDERS' RIGHTS.....................................................................................10
   Article 10................................................................................................10
   Right to Participate in the General Meeting and to Vote at it, the Method of Voting.......................10
V. COMPANY BODIES............................................................................................10
   Article 11................................................................................................10
   Company Bodies............................................................................................10
A. GENERAL MEETING ..........................................................................................11
   Article 12................................................................................................11
   Status of the General Meeting ............................................................................11
   Article 13................................................................................................11
   Powers of the General Meeting ............................................................................11
   Article 14................................................................................................12
   Convening of the General Meeting .........................................................................12
   Article 15................................................................................................13
   Convening of the Extraordinary General Meeting ...........................................................13
   at Request of Qualified Shareholders' Majority............................................................12
   Article 16................................................................................................14
   Convening of the Extraordinary General Meeting in a Special Case..........................................14
   Article 17................................................................................................13
   Revocation of the General Meeting or Change of Date of its Holding........................................13
   Article 18................................................................................................14
   Participation in the General Meeting .....................................................................13
   Article 19................................................................................................15
   Quorum of the General Meeting and Substitute General Meeting .............................................14
   Article 20................................................................................................16
   General Meeting Decision Making...........................................................................15
   Article 21................................................................................................17
   Organization of the General Meeting, its Control, Rules of Procedure and Voting, Minutes of the
   General Meeting ..........................................................................................16
B. BOARD OF DIRECTORS .......................................................................................18
   Article 22................................................................................................18
   Status of the Board of Directors .........................................................................17
   Article 23................................................................................................18
   Acting on behalf of the Company and Acting for the Board of Directors by its Members......................17
   Article 24................................................................................................18
   Signing on behalf of the Company by the Statutory Body Members............................................17
   Article 25................................................................................................19
   Board of Directors' Powers................................................................................18
   Article 26................................................................................................20
   Convening of the Board of Directors ......................................................................19
   Article 27................................................................................................21
   Board of Directors' Decision Taking.......................................................................20
   Article 28................................................................................................21
   Board of Directors' Decision Taking out of the Meeting....................................................21
C. SUPERVISORY BOARD ........................................................................................21
   Article 29................................................................................................21
   Status and Powers of the Supervisory Board ...............................................................21
   Article 30................................................................................................21
   Composition of the Supervisory Board .....................................................................23
   Article 31................................................................................................22
   Convening of the Supervisory Board .......................................................................23
   Article 32................................................................................................23
   Meeting of the Supervisory Board .........................................................................22
   Article 33................................................................................................22
   Supervisory Board's Decision Taking.......................................................................22
   Article 34................................................................................................24
   Bonuses and Directors' Fees of the Board of Directors' and Supervisory Board's Members....................24
VI. COMPANY ECONOMY..........................................................................................24
   Profit Distribution and Covering of Loss of the Company ..................................................23
   Article 35................................................................................................24
   Reserve Fund..............................................................................................24
VII. FINAL PROVISIONS........................................................................................24
   Article 36................................................................................................24
   Procedure for Amending and Changing the Articles of Association ..........................................24
   Article 37................................................................................................27
   Effect of the Changes of the Articles of Association .....................................................25
I. GENERAL PROVISIONS

Article 1

Commercial Name and the Registered Office of the Company
1.	Commercial Name: Teplarna Kromeriz
2.	Company identification number: 25304925
3.	Registered office: Kromeriz, Na Sadkach 3572, post code: 767 01
4.	Legal form of the legal entity: joint stock company
5.	Tax identification number: 320 - 25304925
6.	The Company has been established for an indefinite period of time.
7.	The Company was formed on July 10, 1996 and is recorded in part B, insert 2060 of the Commercial Register, at the District Court in Brno, as the competent Registration Court.
Article 2

Scope of business
1.	The scope of business of the Company is as follows:
1.	Purchase of goods to be sold and sale;
2.	Brokerage;
3.	Marketing;
4.	Heat generation and distribution;
5.	Electricity generation and distribution.
2.	The Company, as an entrepreneur, undertakes business activity:
1.	based on Act No. 222/1994 Coll., on Business Conditions and Public Administration in the Energy Sectors and on the State Energy Inspection, as amended (items d) and e) of Paragraph 1 of this Article of the Articles of Association),
2.	based on Trade Licensing Act, No. 455/1991 Coll., as amended (items a) through c) of Paragraph 1 of this Article of the Articles of Association).
II. REGISTERED CAPITAL OF THE COMPANY AND SHARES

Article 3

The Company Registered Capital and the Extent to which It Has Been Paid Up and the Method of Paying
Up the Issue Price of Shares Including the Consequences of Breaching the Duty to Pay Up the
Subscribed Shares On Time
1.	The total value of Company's registered capital is CZK 42,036,000 (in words forty-two millions thirty-six thousand Czech crowns).
2.	The extent to which the registered capital has been paid up in the amount mentioned in Paragraph 1 of this Article of the Articles of Association: 100 per cent.
3.	At every increase of the registered capital, the share premium and 50 per cent of the nominal value of shares subscribed by monetary contributions and all nonmonetary (in-kind) investment contribution have to be paid prior to their record into the Commercial Register. The remaining shares subscribed by monetary contributions have to be paid no later than in one year from the record of the increase of the registered capital into the Commercial Register.
4.	If the subscriber does not pay the issue price of subscribed shares or its due part, he is called on by the Board of Directors to pay it in the time limit of 60 days from delivery of the notice.
5.	When the duty to pay the issue price of subscribed shares or its due part is breached, the subscriber shall pay 20 per cent (in words: twenty per cent) of the due amount per year.
Article 4

Shares
1.	The Company's registered capital mentioned in Article 3 (1) is divided into registered shares as follows:
1.	40 pieces (forty pieces) of shares, each having the nominal value of CZK 1,000,000 (one million Czech crowns);
2.	5 pieces (five pieces) of shares, each having the nominal value of CZK 100,000 (one hundred thousand Czech crowns);
3.	152 pieces (one hundred and fifty-two pieces) of shares, each having the value of CZK 10,000 (ten thousand Czech crowns);
4.	158 pieces (one hundred and fifty-eight pieces) of shares, each having the value of CZK 100 (one hundred Czech crowns);
5.	20 pieces (twenty pieces) of shares, each having the value of CZK 10 (ten Czech crowns).
2.	Type of shares: common stock, no special rights are connected with these shares.
3.	Form of shares: registered shares.
4.	The sum of share nominal values corresponds to the amount of the Company registered capital.
5.	Number of votes connected with one share:
1.	the right to apply 100,000 votes (in words: one hundred thousand votes) is connected with one share of the nominal value of CZK 1,000,000 (in words: one million Czech crowns);
2.	the right to apply 10,000 votes (in words: ten thousand votes) is connected with one share of the nominal value of CZK 100,000 (in words: one hundred thousand Czech crowns);
3.	the right to apply 1,000 votes (in words: one thousand votes) is connected with one share of the nominal value of CZK 10,000 (in words: ten thousand Czech crowns);
4.	the right to apply 10 votes (in words: ten votes) is connected with one share of the nominal value of CZK 100 (in words: one hundred Czech crowns);
5.	the right to apply 1 vote (in words: one vote) is connected with one share of the nominal value of CZK 10 (in words: ten Czech crowns);
6.	Format of shares: certificated shares
7.	A registered certificated share is transferable by an endorsement or by handing-over of a share. In the endorsement, the name and registered office of the legal entity or the name and address of the natural person to whom the share is transferred and the date of the share transfer. The regulations regarding bills of exchange shall apply to the endorsement reasonably otherwise. The change of the shareholder must be recorded in the list of shareholders so that the transfer of a registered share can become effective. The Company shall record such a change of a shareholder without undue delay after such change has been documented to it.
Article 5

List of Shareholders
1.	A person listed in the list of shareholders kept by the Company shall be entitled to exercise rights connected with a registered share with respect to the Company.
2.	The type and form of a share, its nominal value, the commercial name and the registered office of the legal entity or the name and address of the natural person who is a shareholder, and/or a numerical marking of the share and changes of the above listed data must be recorded in the list of shareholders.
3.	The Company is obliged to give a copy of the list of shareholders who are owners of registered shares, or required parts of the list of shareholders to each shareholder at his/its written request and at his/its expense. This shall be effected within seven days after delivery of his/its request.
III. INCREASE AND REDUCTION OF THE REGISTERED CAPITAL OF THE COMPANY

Article 6

Increase of the registered capital of the Company
1.	The increase of the Company registered capital is governed by Section 202 et seq. of the Commercial Code.
2.	The Company can increase the registered capital as follows:
1.	an increase of the registered capital by subscription of new shares,
2.	by a conditional increase of the registered capital,
3.	by an increase of the registered capital from own Company sources,
4.	by a combined increase of the registered capital,
5.	by an increase of the registered capital by decision of the Board of Directors.
3.	The General Meeting or the Board of Directors decide on the increase of the registered capital based on delegation by the General Meeting in compliance with the Commercial Code and the Articles of Association.
4.	The effects of the increase of the registered capital start on the day of the record of its amount into the Commercial Register.
5.	The terms and the procedure of the conditional increase of the registered capital is governed by Section 160 and Section 207 of the Commercial Code. If the General Meeting decides to issue convertible or priority bonds, it simultaneously accepts the resolution on the increase of the registered capital in such an extent, in which convertible rights from convertible bonds or priority rights from priority bonds can be applied.
6.	The Board of Directors can be authorized by a resolution of the General Meeting, to decide, under the terms specified by the Commercial Code and the Articles of Association, on the increase of the registered capital by means of a share subscription or from the Company's equity, with exception of retained profit, but by no more than one-third of the existing amount of the registered capital in the time when the Board of Directors decides on the increase of the registered capital ("the authorization to increase the registered capital"). The Board of Directors' authorization to increase the registered capital replaces the decision of the General Meeting to increase the registered capital. The authorization must specify the nominal value, type, form and format of shares that shall be issued to increase the registered capital. The Board of Directors, within the scope of such authorization, may increase the registered capital even more than once, if the total amount of such a registered capital increase does not exceed the fixed limit. If the Board of Directors is authorized to decide on the increase of the registered capital by means of nonmonetary contributions, the authorization to increase the registered capital must also contain the specification, which Company body shall decide on the valuation of a nonmonetary contribution based on an expert opinion, such expert or experts having been appointed pursuant to Section 59(3) of the Commercial Code.
7.	A notarial deed shall be made on the Board of Directors' decision. The Board of Directors' decision to increase the registered capital is recorded into the Commercial Register. An authorization to increase the registered capital shall not be recorded into the Commercial Register. The provisions of Sections 203 through 209 of the Commercial Code shall apply to the procedure to increase the registered capital pursuant to Paragraph 6 of this Article as appropriate.
8.	The authorization to increase the registered capital may be conferred for a period of up to five years after the day when the General Meeting, which resolved to authorize the increase of the registered capital, was held.
Article 7

Rules of the Procedure of the Company Registered Capital Increase
The following rules have to be observed at a registered capital increase:
·	the General Meeting decides on the increase of the registered capital based on the Board of Director's proposal, or the Board of Directors decides on this matter based on the authorization of the General Meeting;
·	the invitation to, or notice of, a General Meeting shall also include, in addition to the particulars under section 184(5) of the Commercial Code, at least the information under Section 202(2) to (4) of the Commercial Code;
·	by 30 days from the resolution of the General Meeting, the Board of Directors shall file an application for its entry in the Commercial Register;
·	a resolution on the entry shall be published by the Board of Directors without undue delay after its entry into the Commercial Register;
·	resolution of the General Meeting on increase of the registered capital is performed by the Board of Directors;
·	in case of a breach of the duty to pay the issue price of subscribed shares, the subscriber pays the due interest in accordance with Article 3 Paragraph 4 of the Articles of Association;
·	the Board of Directors shall file an application for entry of the new amount of the registered capital into the Commercial Register. The effects of the registered capital increase start on the day of such entry.
Article 8

Reduction of the Company Registered Capital
1.	The reduction of the Company registered capital is possible only based on the decision of the General Meeting. Reduction of the registered capital is governed by the provisions of Sections 211 through 216b of the Commercial Code.
2.	The Company can reduce its registered capital as follows:
1.	by decreasing the nominal value of shares and interim certificates,
2.	by withdrawal of shares from circulation on the basis of a public proposal,
3.	by abandonment of a share issue.
3.	The value of the Company registered capital can not be reduced under its level set by law, i.e. CZK 2,000,000 (in words two million Czech crowns).
4.	With the registered capital reduction the collection of 'creditor's debts must not be made worse.
Article 9

Rules of the Procedure of the Company Registered Capital Reducing
1.	On reducing the registered capital of the Company by a reduction of the nominal value of shares and interim certificates (section 213a of the Commercial Code), the following rules shall be observed:
1.	If the nominal value of the Company shares is reduced, the value of all the Company shares must be reduced, except if the purpose of the reduction is to waive the unpaid part of the issue price of the shares.
2.	The reduction of the nominal value of certificated shares on unpaid shares to which interim certificates were issued, shall be carried out by replacing the shares or the interim certificates by shares or interim certificates having a lower nominal value, or by marking a lower nominal value on the existing share or the existing interim certificate signed by the members of the Board of Directors authorized to act on behalf of the Company. The Board of Directors shall invite the shareholders having the certificated shares or interim certificates in a way stipulated by law and by the Articles of Association concerning the convening of the General Meeting, to submit their shares or interim certificates for the purpose of a replacement or marking a reduction of their nominal value within a time-limit stipulated by the General Meeting. Unless a shareholder submits his shares or interim certificates in the stipulated time-limit, he/it is not entitled to exercise the related rights until he/it submits them, and the Board of Directors shall proceed pursuant to section 214 of the Commercial Code.
2.	Based on the public proposal (Section 213c of the Commercial Code) the procedure is as follows:
1.	Shares may be withdrawn from the market on the basis of a public offer for a contract for the purchase of shares or for the withdrawal of shares from the market without a consideration;
2.	the provisions of Section 183a through 183c and 183e through 183g of the Commercial Code shall apply on the public offer of the contract on free share withdrawal from the market;
3.	the Board of Directors, based on authorization of the General Meeting, shall issue proposal for the record of the new value of the registered capital into the Commercial Register in such an extent, in which the public offer of contract was accepted by the shareholders.
3.	Based on abandonment of a share issue (Section 213d of the Commercial Code), the procedure shall be as follows:
1.	The General Meeting may decide on a reduction of the registered capital by abandonment of a share issue to the extent in which subscribers are in delay with paying-up the nominal value of shares, unless the Company proceeds pursuant to Section 177(4) through (7) of the Commercial Code.
2.	The Board of Directors invites the shareholder that is in delay with paying-up the issue price or its part to return his/its interim certificate and the Company will not issue shares replaced by such an interim certificate and it will return the shareholder the so-far paid-up issue price of the shares without undue delay after entry of the reduction of the registered capital in the Commercial Register after setting-off claims of the Company with respect to the subscriber. Unless a shareholder submits his/its interim certificate in the stipulated time limit, he/it is not entitled to exercise the related rights until he/it submits it. Unless he/it submits such an interim certificate in an additional time limit upon call of the Board of Directors, the Board of Directors shall declare it invalid.
4.	The procedure of Company registered capital reducing is as follows:
1.	the General Meeting decides about the registered capital reducing based on the Board of Directors' proposal,
2.	also the particulars mentioned in Section 211(1) of the Commercial Code are mentioned in the announcement on holding the General Meeting in addition to the particulars mentioned in Section 184(5) of the Commercial Code,
3.	The resolution of the General Meeting to reduce the Company's registered capital shall be entered into the Commercial Register. The petition for such entry shall be filed by the Board of Directors within 30 days of the General Meeting's resolution,
4.	the resolution on the entry is published by the Board of Directors in the way specified in Article 20 Paragraph 5 of the Articles of Association, without undue delay after its entry into the Commercial Register,
5.	the resolution of the General Meeting to reduce the registered capital is exercised by the Board of Directors,
6.	The Board of Directors is obligated to notify in writing, within 30 days after the resolution of the General Meeting on reduction of the registered capital became effective with respect to third parties, the extent of the reduction of the registered capital to all known creditors whose claims against the Company arose prior to the day when this resolution became effective with respect to third parties, the aforesaid notification including also an invitation to submit their claims under provision of Section 215(3) of the Commercial Code. The Board of Directors shall secure the publishing of General Meeting's decision on the registered capital reduction after its entry into the Commercial Register, at least twice with a thirty-day interval in the way mentioned in Article 20 Paragraph 5 of the Articles of Association, and with a notice for creditors that they announce their receivables pursuant to provision of Section 215(3) of the Commercial Code.
7.	the Board of Directors shall file an application for entry of such a registered capital reduction in the Commercial Register in the deadline mentioned in Section 216 of the Commercial Code.
IV. SHAREHOLDERS' RIGHTS

Article 10

Right to Participate in the General Meeting and to Vote at it, the Method of Voting
1.	The shareholders exercise their rights concerning the Company management at the General Meeting.
2.	The shareholder is entitled to vote in the General Meeting, either personally or by means of a natural person or a legal entity - a proxy - based on the power of attorney with shareholder's authenticated signature under the simultaneous meeting of the condition of shareholder's participation in the General Meeting (Article 18 of the Articles of Association).
3.	At the General Meeting, shareholders vote by acclamation. The details on voting are mentioned in General Meeting rules of procedure and voting, approved by the General Meeting.
V. COMPANY BODIES

Article 11

Company bodies
The Company bodies are as follows:
·	General Meeting,
·	Board of Directors,
·	Supervisory Board.
A. GENERAL MEETING

Article 12

Status of the General Meeting
1.	The supreme Company body is the General Meeting. It consists of all shareholders present.
2.	The General Meeting is competent to decide about all matters, which are entrusted to its competence by the law or the Articles of Association.
3.	The General Meeting decides by means of its resolutions, which are binding for the Company and its bodies.
Article 13

Powers of the General Meeting
1.	It is within the powers of the General Meeting to:
1.	decide to modify the Articles of Association unless it is a change as a consequence of registered capital increase by the Board of Directors pursuant to Section 210 of the Commercial Code or a change as a consequence of other legal facts,
2.	decide to increase or reduce the registered capital or to authorize the Board of Directors pursuant to Section 210 of the Commercial Code or to set off a receivable from the Company against a receivable relating to the amount of an issue price;
3.	decide to reduce the registered capital and to issue bonds pursuant to Section 160 of the Commercial Code;
4.	elect and recall of Board of Directors' members;
5.	elect and recall Supervisory Board's members;
6.	approve the ordinary or extraordinary financial statements and consolidated financial statements and in cases set by law also the interim financial statements, and to decide on the profit distribution, the making good of a loss and determination of directors fee;
7.	decide on the financial remuneration of Board of Directors' and Supervisory Board's members;
8.	decide to wind up the Company in conjunction with its going into liquidation, to appoint and recall the liquidator, including determining the amount of the liquidator's remuneration, approve the plan for distribution of the liquidation remainder;
9.	decide on Company merger, transfer of business assets to a sole shareholder or on division, and/or a change of legal form;
10.	decide whether to conclude a contract if its object is the transfer of an enterprise or its part, or lease of an enterprise or its part, or whether to conclude such contract with a controlled person;
11.	approve a controlling agreement (Section 190b of the Commercial Code), a profit transfer agreement (Section 190a of the Commercial Code) and a silent partnership agreement and their amendments;
12.	decide on other matters, which the Commercial Code or the Articles of Associations entrust to the to the General Meeting's competence.
2.	The General Meeting may not reserve the right to decide on a matter which neither the law nor the Articles of Association entrust to its competence.
Article 14

Convening of the General Meeting
1.	The General Meeting is held at least once a year, however no later than on June 30 of the current calendar year, and is called by the Board of Directors, possibly its member under conditions of Section 184(3) of the Commercial Code.
2.	The Supervisory Board convenes the General Meeting if it is required by Company interests, and proposes necessary measures at the General Meeting. Provisions of Section 184 through 190 of the Commercial Code are valid for General Meeting convocation as appropriate.
3.	If the General Meeting is convened by the Supervisory Board, the Board of Directors has to cooperate adequately.
4.	The Board of Directors is obligated to publish the announcement on holding the General Meeting at least 30 days prior to holding the General Meeting, namely in an announcement delivered as stipulated in this Article of the Articles of Association.
5.	The announcement on holding the General Meeting contains at least the following data:
1.	commercial name and registered office of the Company,
2.	venue, date and hour of the General Meeting,
3.	whether it is an ordinary, extraordinary or substitute General Meeting that is being convened,
4.	the agenda of the General Meeting.
6.	The main data in the financial statements with specifying the time and place, in which the financial statements can be seen by Company shareholders, is part of the announcement on holding the General Meeting, on which the ordinary, extraordinary and consolidated financial statements and/or interim financial statements shall be approved. If a change in the Articles of Association is on General Meeting's agenda, the announcement on holding the General Meeting must at least characterize the principle of proposed changes and the proposal of changes in the Articles of Association must be open to public inspection on the Company registered office within the period set for convening the General Meeting. A shareholder has the right to ask for mailing a copy of the proposal of the Articles of Association at own costs and at own risk. The shareholders must be notified about these rights in the announcement on holding the General Meeting.
7.	After holding one General Meeting, another General Meeting must not be held earlier than in two business days.
8.	The venue, date and time of holding the General Meeting must be determined in such a manner as not in any way to prevent shareholders attending at the General Meeting.
9.	At the request of a shareholder or shareholders having shares whose total nominal value exceeds 5 per cent of the registered capital of the Company, the Board of Directors is obliged to put an issue stipulated by such shareholders on the agenda of the General Meeting. If the request is delivered after the announcements on holding the General Meeting have been sent, the Board of Directors shall announce the changed agenda of the General Meeting to shareholders by registered mail within 10 days before the General Meeting. Unless it is possible to announce the changed agenda in this way, such an issue may be included in the agenda of the General Meeting only if all shareholders are present and agree.
Article 15

Convening of the Extraordinary General Meeting at Request of Qualified Shareholders Minority
1.	The shareholder or shareholders of the Company, whose registered capital is higher than CZK 100,000,000, who have shares, whose total value exceeds 5 per cent of the registered capital, can ask the Board of Directors to call an extraordinary General Meeting to discuss proposed matters (Section 181(1) of the Commercial Code).
2.	The Board of Directors shall convene an Extraordinary General Meeting so that it takes place no later than 40 days from the day, when the Board of Directors received the request for its convening. The deadline mentioned in Section 184(4) of the Commercial Code and Article 14 Paragraph 5 of the Articles of Association is being shortened to 15 days. The Board of Directors is not entitled to change the proposed agenda. The Board of Directors is entitled to amend the agenda only with consent of persons, who requested to convene the Extraordinary General Meeting pursuant to Section 181(1) of the Commercial Code and Paragraph 1 of this Article of the Articles of Association.
3.	Revocation or change of date of holding of an extraordinary General Meeting on a later date, convened according to Section 181, is regulated by Section 184(7) of the Commercial Code and Article 17 Paragraph 2 of the Articles of Association.
Article 16

Convening of the Extraordinary General Meeting in a Special Case
The Board of Directors shall convene a General Meeting, without undue delay, when it ascertains that a settlement of a loss shown in any of the financial statements from the Company's disposable funds would still leave an unsettled amount representing half of the registered capital of the Company, or this result may be expected with respect to all circumstances, or if the Board of Directors establishes that the Company has become insolvent, and propose to the General Meeting that the Company be wound up, or another measure to be adopted, unless a specific legislative regulation provides otherwise.
Article 17

Revocation of the General Meeting or Change of Date of its Holding
1.	The General Meeting can be revoked or the date of its holding can be changed for a later date. The revocation of the General Meeting or the change of the date of its holding have to be announced in the way set by law and the Articles of Association concerning convocation of the General Meeting, one week prior to the announced date of its holding at the latest, otherwise the Company is obligated to pay to the shareholders who came according to the original announcement, the expenses incurred.
2.	The extraordinary General Meeting convened pursuant to Section 181 of the Commercial Code can be revoked or the date of its holding can be changed for a later date only if the mentioned shareholders ask for it. When a new date of holding the General Meeting is set, the deadline pursuant to Section 184(4) of the Commercial Code or pursuant to Section 181(2) of the same act must be fulfilled.
Article 18

Participation in the General Meeting
1.	Every shareholder that is mentioned in the list of shareholders has the right to participate at the General Meeting.
2.	The shareholder (a natural person) is entitled to participate at General Meeting and to perform his/her rights personally at the General Meeting. The shareholder (a legal entity) is entitled to participate at the General Meeting and to perform personally its/his rights by means of an authorized member of its/his statutory body.
3.	When performing his/its rights at the General Meeting, the shareholder is entitled to be represented by a natural person or a legal entity (proxy). For this purpose the shareholder (principal) shall provide a written power of attorney to the proxy, which has to contain the scope of proxy's authorization, otherwise it is void. Members of the Company Board of Directors or Supervisory Board can be a shareholder's proxy.
4.	The Board of Directors and Supervisory Board members can participate in the General Meeting. The notary participates in the General Meeting every time when the Commercial Code sets duty to make a notarial deed. Other persons can participate in the General Meeting or its part only with the approval of the Board of Directors. The General Meeting is not open to public.
5.	The expenses connected with shareholder's participation at the General Meeting are covered by the shareholder unless otherwise set by the Commercial Code.
Article 19

Quorum of the General Meeting and Substitute General Meeting
1.	The General Meeting constitutes a quorum if the shareholders present have shares with nominal value exceeding 50 per cent of the Company registered capital.
2.	If the General Meeting does not constitute a quorum by two hours from the beginning of starting the General Meeting, set in the announcement on holding the General Meeting, then the member of the Board of Directors, who was authorized by the Board of Directors to control the General Meeting till the General Meeting chairman is elected, shall dissolve the General Meeting. In this case the Board of Directors shall convene a substitute General Meeting.
3.	The substitute General Meeting is called by the Board of Directors by a new announcement in the way mentioned in Section 184 Paragraph 4 of the Commercial Code and Article 15 Paragraph 5 of the Articles of Association, with the specification, that the deadline mentioned is shortened for 15 days.
4.	The announcement on holding a substitute General Meeting has to be sent no later than 15 days from the day, for which the original General Meeting was convened.
5.	The substitute General Meeting must be hold no later than six weeks from the day, for which the original General Meeting was convened.
6.	The substitute General Meeting must have an unchanged agenda and constitutes quorum with no regard to Paragraph 1 of this Article of Association.
Article 20

General Meeting Decision Making
1.	The General Meeting decides with majority of votes of shareholders present unless the Commercial Code requires another majority.
2.	The General Meeting decides about the matters pursuant to Section 187 letter a), b), and c) and about winding up of a Company with its going into liquidation and the plan of liquidation balance distribution by at least two third of votes of shareholders present. If the General Meeting decides to increase or reduce the registered capital, approval of at least two third votes of shareholders present for each type of shares, issued by the Company or issued in form of interim certificates, is also required.
3.	The approval of at least three fourths of votes of shareholders present having these shares is also required for the decision of the General Meeting on the change of type or form of shares, on change of rights connected with a specific type of shares, on restriction of bearer shares transferability and on cancellation of share public transferability.
4.	The General Meeting decides with at least three quarters of votes of shareholders present about the elimination or restriction of the pre-emptive right for obtaining convertible bonds or bonds with attached pre-emptive rights for subscription of new shares pursuant to Section 204a of the Commercial Code, on the approval of a control agreement (Section 190b of the Commercial Code), on the approval of a profit transfer agreement (Section 190a of the Commercial Code), and their changes and on increase of the registered capital with non-monetary contributions. If the Company issues more types of shares, the approval of General Meeting is required plus approval of at least three quarters of votes of shareholders present for each share type.
5.	A General Meeting's resolution on consolidation of shares also requires approval by all shareholders whose shares are to be consolidated.
6.	A notary record must be elaborated on the decisions pursuant to Sections 2 through 5 of this Article of the Articles of Associations. The notary record on the decision on the change of the Articles of Association must contain also an approved text of the change in the Articles of Association.
7.	The General Meeting votes first about the proposal of the resolution submitted for decision by the Board of Directors and in case that the proposal is not approved, voting of other shareholders' counter-proposals is made in such order, in which they were submitted. If some of the proposals are accepted with a necessary majority of votes, there is no voting on other proposals.
8.	The matters that were not included into the proposed General Meeting agenda can be decided only under participation and with approval of all Company shareholders.
Article 21

Organization of the General Meeting, its Control, Rules of Procedure and Voting,
Minutes of the General Meeting
1.	The organization of the General Meeting is secured by the Board of Directors.
2.	Updating of the list of persons present, verification of the right to participate in the General Meeting and authorization to exercise shareholders voting rights is secured by persons authorized by the Board of Directors.
3.	After completing the record of the shareholders into the list of persons present these persons shall submit the determined number of shareholders present and number of their votes to the member of the Board of Directors who was authorized to control the General Meeting by the Board of Directors.
4.	In case the General Meeting is not able to constitute a quorum pursuant to Article 19 Paragraph 1 of the Articles of Association, it shall be governed by other provisions of Article 19 of the Articles of Association.
5.	The General Meeting, after verifying the quorum, is opened by the member of the Board of Directors, who was authorized by the Board of Directors.
6.	The acting and voting of the General Meeting shall be governed by rules of procedure and voting of the General Meeting, which are approved by the General Meeting.
7.	The General Meeting elects its chairman, minutes clerk, two persons verifying the record and persons authorized to count votes (General Meeting bodies).
8.	Until the persons authorized to vote counting are elected, the votes are counted by the persons authorized by the Board of Directors.
9.	Only natural persons present at General Meeting, who agree with this candidature, can be proposed to General Meeting bodies.
10.	Until the chairman of General Meeting and other bodies are elected, the General Meeting is controlled by the member of the Board of Directors who was authorized by the Board of Directors.
11.	The General Meeting is controlled by the chairman of the General Meeting according to General Meeting agenda.
12.	Minutes shall be drawn up from the General Meeting.
13.	Proposals and statements, submitted at the General Meeting, are attached to the Minutes, plus the list of persons present at the General Meeting.
14.	The Board of Directors ensures the preparation of the Minutes from the General Meeting no later than in 30 days from its finishing. The record is signed by the minutes clerk and the chairman of the General Meeting and one elected person to verify the minutes.
B. BOARD OF DIRECTORS

Article 22

Status of the Board of DirectorsM
1.	The Board of Directors is the statutory body of the Company, which manages the Company's activity and acts in its name.
2.	The Board of Directors has three members.
3.	The members thereof are elected and recalled by the General Meeting.
4.	The Board of Directors is elected for a five-year period. The term of office starts on the day of electing the Board members by the General Meeting. Any Board member can be reelected.
5.	The Board of Directors whose number of members elected by the General Meeting is not lower than one half can appoint substitute members until the next General Meeting.
6.	The Board of Directors shall elect its Chairman.
7.	The membership in the Board of Directors is not substitutable. Mutual substitution is inadmissible.
Article 23

Acting on behalf of the Company and Acting for the Board of Directors by its Members
The Board of Directors acts on behalf of the Company. Either the Chairman separately, or separately a Board member within the scope of written authorization delegated by the Board may act in the name of the Company with respect to other parties.
Article 24

Signing on behalf of the Company by the Statutory Body Members
1.	Signing on behalf of the Company is carried out in such a way that all members of the Board of Directors or the Board Chairman separately or one member separately authorized in writing by the Board of Directors append their signatures, mentioning their function in the Board of Directors to the Company's printed, imprinted or written commercial name.
2.	Specimen signatures of all Board members, in which the signatures are authenticated, are filed in the registry of documents at the Commercial Register of the Registration Court. The Company also submits the specimen signatures to the Commercial Court in relation to an entry of changes in the Commercial Register.
Article 25

Board of Directors' Powers
1.	The Board of Directors decides on all matters relating to the Company, provided they have not been entrusted by the Commercial Code or the Articles of Association to the powers of the General Meeting or the Supervisory Board.
2.	The Board of Directors in particular:
1.	insures business, as well as proper accounting management of the Company;
2.	convenes the General Meetings, substitute General Meetings as well as extraordinary General Meetings;
3.	decides on proposals that are to be approved and decided on by the General Meeting, in particular:
1.	proposals for changes to the Articles of Association, unless it concerns a change caused by an increase in the registered capital by the Board of Directors pursuant to Section 210 of the Commercial Code;
2.	ordinary, extraordinary and consolidated, and/or interim financial statements and proposals for distribution of profit or covering a loss and the determination of Board members' director's fees;
3.	proposals for the election and recall of members of the Board of Directors and the Supervisory Board;
4.	proposals for changes to the registered capital and for an issue of bonds with attached pre-emptive rights and convertible bonds;
5.	proposals for changes to the format, form and type of shares;
4.	submits to the General Meeting the Company's annual financial statement of the previous accounting period, annual report on the Company's business activities and assets for approval;
5.	decides on an increase of the registered capital pursuant to Article 6, Paragraphs 6 through 8 of the Articles of Association, being authorized by the General Meeting;
6.	elects and recalls the Chairman of the Board of Directors out of the Board members;
7.	without undue delay, ensures the elaboration of the whole wording of the Articles of Association, if a change in the Articles of Association occurs based on any legal fact, after any of the Board of Directors' members is informed about such a change;
3.	The Board of Directors carries out the General Meeting's resolutions and decisions.
4.	The Board of Directors passes provisions concerning a protection of the Company's trade secrets.
5.	The Board of Directors is governed by the principles and instructions adopted by the General Meeting, provided they are in accordance with statutory provisions and these Articles of Association. Their infringement has no influence on the effects of actions by members of the Board of Directors with regard to third parties. Unless otherwise set by the Commercial Code, nobody is authorized to issue orders to the Board of Directors concerning the Company business management.
6.	The Board of Directors submits to the Supervisory Board in particular:
1.	ordinary, extraordinary and consolidated financial statements, and/or the interim financial statements and the proposals for the distribution of profit or covering of loss and the setting of Board members' director's fees, for review,
2.	a report on the Company's business activities and assets, for an opinion,
7.	The Board of Directors decides on the use of money from the reserve fund pursuant to Article 35 of the Articles of Association.
Article 26

Convening of the Board of Directors
1.	The Board of Directors meets according to need.
2.	The meetings of the Board of Directors are called by its Chairman, if being absent, the Board meetings are convened by an authorized Board member by a written invitation in which the venue, date and hour of holding the Board of Directors meeting and the agenda are specified. The invitation must be delivered to the members of the Board of Directors at least three days before the meeting unless the next meeting date and particulars were discussed at the preceding Board meeting. If approved by all the Board members, the Board meeting may be convened by telephone or by telefax. In such a case, the invitation must also contain the above mentioned particulars and the Board members must confirm its receipt.
3.	The Chairman of the Board of Directors is obliged to convene a Board meeting always when required by any member of the Board of Directors specifying the reason.
Article 27

Board of Directors' Decision Taking
1.	The Board of Directors has a quorum when at least two members are present.
2.	Each member of the Board of Directors has one vote on voting at Board meetings.
3.	Absolute majority of votes of all Board of Directors' members is required to pass a resolution concerning any matter discussed at the meeting of the Board of Directors. If the votes are equal, the Chairman's vote decides.
4.	On election and recall of the Board Chairman, this person shall not vote.
Article 28

Board of Directors' Decision Taking out of the Meeting
1.	Decision taking out of the Board's meeting is possible if agreed by all Board members. The voting persons are considered present. To adopt the decision of the Board of Directors, it is necessary that all members of the Board of Directors vote for the decision in writing and the decision must be adopted unanimously. The voting persons are considered present.
2.	Such an accepted decision must be incorporated in the minutes of the next Board of Directors' meeting.
3.	Any organizational activities connected with the decision taking out of the Board meeting are ensured by the Chairman of the Board of Directors.
C. SUPERVISORY BOARD

Article 29

Status and Powers of the Supervisory Board
1.	The Supervisory Board oversees the exercise of the powers of the Board of Directors and the carrying out of the Company's business activities.
2.	Members of the Supervisory Board are entitled to examine all documents and records relating to the Company's activities, and examine whether accounting statements are properly kept in accordance with the facts and whether the Company's business activities are conducted in accordance with legal regulations, these Articles of Association and instructions of the General Meeting.
3.	The Supervisory Board reviews the financial statements and proposal for the distribution of profit and submits its opinion to the General Meeting.
4.	The Supervisory Board approves the auditor for an audit of the financial statements.
5.	The members of the Supervisory Board take part in the General Meeting and are obliged to present the General Meeting results of their control.
6.	The Supervisory Board convenes a General Meeting where this is required in the interests of the Company, and proposes the required measures at the General Meeting.
Article 30

Composition of the Supervisory Board
1.	The Supervisory Board has three members. A member of the Supervisory Board may not also be a member of the Board of Directors, an agent by proxy or a person authorized according to the record in the Commercial Register to act on behalf of the Company.
2.	Two-thirds of the specified number of members of the Supervisory Board shall be elected and recalled by the General Meeting, and one third by the Company's employees. However, provided the number of the Company's employees, whose working hours exceed one half of the weekly working hours stipulated by a special regulation at the time of holding the General Meeting, does not exceed 50 persons, all the members of the Supervisory Board are elected by the General Meeting.
3.	Members of the Supervisory Board are elected for a period of five years. Their term of office may not, however, end before new members have been elected. New members are however elected not later than by expiry of three months after the former members' end of the term of office. Members of the Supervisory Board may be re-elected.
4.	A member of the Supervisory Board may withdraw from his/her function by his/her written statement delivered to the Supervisory Board. In such a case, his/her function expires on the date when his/her withdrawal has been or should have been discussed by the Supervisory Board. Provided the number of the Supervisory Board members falls below one half, the Supervisory Board is obliged to convene the extraordinary General Meeting without undue delay, which discusses the members' withdrawal and elects new members of the Supervisory Board.
5.	The Supervisory Board shall elect its Chairman out of its members.
6.	The Supervisory Board determines its member who shall represent the Company in court proceedings and in other proceedings held against Board of Directors' members by other bodies.
Article 31

Convening of the Supervisory Board's Meetings
1.	The Supervisory Board meets at least once in a year.
2.	The meetings of the Supervisory Board are called by its Chairman by a written invitation in which the venue, date and hour of holding the Supervisory Board meeting and the agenda are specified. The invitation must be delivered to the members of the Supervisory Board at least fifteen days before the meeting. If approved by all the Board members, the Board meeting may be convened by telephone or by telefax. In such a case, the invitation must also contain the above mentioned particulars and the Board members must confirm its receipt.
3.	The membership in the Supervisory Board is unsubstitutable.
4.	At its discretion, the Supervisory Board may also invite members of other Company's bodies, employees, shareholders and other persons.
Article 32

Meetings of the Supervisory Board
1.	Meetings of the Supervisory Board are conducted by its Chairman. If being absent, the meeting is conducted by the Deputy Chairman.
2.	Minutes are taken of the proceedings and decisions of the Supervisory Board, signed by the Chairman of the Supervisory Board and the minutes keeper authorized by the Supervisory Board.
3.	Costs related to the meetings and other activities of the Supervisory Board are paid by the Company.
Article 33

Supervisory Board's Decision Taking
1.	The Supervisory Board has a quorum when at least two members of the Supervisory Board are present.
2.	The Supervisory Board decides on the basis of consent of the majority of its members' votes. Each member of the Supervisory Board has one vote on voting at Board meetings.
3.	On election and recall of the Board Chairman, this person shall not vote.
Article 34

Bonuses and Directors' Fees of the Board of Directors' and Supervisory Board's Members
1.	Members of the Board of Directors and the Supervisory Board are entitled to receive remuneration in the amount and under conditions stipulated by the General Meeting and these Articles of Association.
VI. COMPANY ECONOMY

Profit Distribution and Covering a Loss of the Company
1.	The General Meeting decides on the distribution of the Company's profit on the basis of a proposal by the Board of Directors, following a review of such proposal by the Supervisory Board.
2.	Following tax liabilities in accordance with statutory provisions, the allocation to the reserve fund and other funds as the case may be, and following distribution for other purposes approved by the General Meeting, profit achieved by the Company in the accounting period is allocated on the basis of a decision by the General Meeting on the payment of dividends to individual shareholders. This does not exclude the possibility of the General Meeting's deciding that a part of profit not specially committed is used to increase the Company's registered capital or that a part of profit is not allocated.
3.	The proposal for the profit distribution or covering of loss is governed by Section 178(6) of the Commercial Code.
4.	Possible losses arisen in the Company's economy shall be compensated in particular from the Company's reserve fund.
5.	The Company is not entitled to allocate profit among shareholders in cases listed in Section 178 para. 2 of the Commercial Code.
Article 35

Reserve Fund
1.	Following tax liabilities in accordance with statutory provisions, the Company shall use its profit for obligatory and other allocations to the Company's fund, for investments and for other purposes approved by the General Meeting, for payment of dividends to individual shareholders and for directors' fees of members of the Board of Directors and the Supervisory Board.
2.	The reserve fund shall be replenished by at least 5 per cent of the profit in the preceding accounting period after levies and taxes, until the amount being equal to 20 per cent of the Company's registered capital is reached. The Board of Directors decides on a specific use of the reserve fund. The reserve fund may be used by the Company to settle a loss or for measures that are to overcome unfavorable economic position of the Company in the extent in which this fund is created pursuant the Commercial Code in an obligatory way.
3.	The General Meeting shall decide on any other creation of the reserve fund above the level stipulated in the preceding paragraph.
4.	Based on a decision of the General Meeting, the Company may create other funds. The Board of Directors shall decide on their use pursuant to principles stipulated by the General Meeting.
VII. FINAL PROVISIONS

Article 36

Procedure for Amending and Changing the Articles of Association
1.	Proposals for an amendment or another change of the Articles of Association ("changes to the Articles of Association") may be given by the Board of Directors, the Supervisory Board and a shareholder provided the agenda of the General Meeting contains changes to the Articles of Association.
2.	Proposals for changes to the Articles of Association are proceeded in particular by the Board of Directors.
3.	The General Meeting decides on changes to the Articles of Association, unless it is a change as a consequence of an increase in the registered capital by the Board of Directors pursuant to Section 210 of the Commercial Code or a change as a consequence of other legal fact.
4.	At least two-third majority of votes of the shareholders present is needed to pass a decision concerning changes to the Articles of Association. A notarial record must be written about a decision concerning changes to the Articles of Association.
5.	If the General Meeting reaches a decision concerning a change to the Articles of Association, the Board of Directors shall ensure the production of the full wording of the Company's Articles of Association, without undue delay. The full wording of the Company's Articles of Association shall become a part of the registry of documents kept by a registration court. The Articles of Association table of contents must be a part of the full wording of the Articles of Association.
Article 37

Effect of the Changes of the Articles of Association
1.	Should the General Meeting decide on an increase or decrease in the registered capital, splitting of shares or consolidation of shares into one share, change of share form or type, or limitation of transferability of registered shares or a change thereof, the changes to the Articles of Association come into force on the day of their record in the Commercial Register.
2.	Other changes come into effect at the moment when the General Meeting made a decision about them, provided that neither a decision by the General Meeting on a change to the Articles of Association nor the law requires that they come into effect at a later time.
3.	If the change in the Articles of Association is based on any legal fact, the provision of Article 26 Paragraph 2 (g) of the Articles of Association shall apply. The change in the Articles of Association takes effect on the day on which such a legal fact takes effect.

TEPLARNA LIBEREC
LIBEREC COGENERATION PLANT
Joint Stock Company
ARTICLES OF ASSOCIATION

                                               Table of Contents

   1.    Name, Registered Office, Origin and Period of the Company...................................3
   2.    The object of Company's business activity...................................................3
   3.    Acting on behalf of the Company.............................................................4
   4.    Basic capital and shares....................................................................4
   5.    Company Bodies..............................................................................5
   6.    General Meeting.............................................................................5
   7.    Board of Directors.........................................................................11
   8.    Supervisory Board..........................................................................15
   9.    Economy/Management of the Company..........................................................18
   10.   Rules for increasing and reducing the registered capital of the Company....................21
   11.   Winding-up and Liquidation of Company......................................................23
   12.   Announcements by the Company...............................................................24
   13.   Final Provisions...........................................................................24
   14.   Method during Articles of Association supplementation and amending.........................25
   15.   Articles of Association Effective Date.....................................................26
1. Name, Registered Office, Origin and Period of the Company
1.1         Company name:        Teplarna Liberec, a.s.

1.2         Registered office:         tr. Dr. Milady Horakove 641/34a, 460 01 Liberec 4.

1.3	 	The Company was founded without the call to subscribe shares by concluding the Founder’s Agreement of November 11, 1994 in the form of a notary record, by approving the Articles of Association and by voting the Company’s bodies.	

1.4	 	The company was established on February 13, 1995 and has been recorded in the Commercial Register held with the Regional Court in Ústí nad Labem. The Company has been established for an indefinite period of time.	

2. The object of Company's business activity
The object of Company's business activity is as follows:

2.1	 	Generation, distribution, purchase and sale of heat and related activities.	

2.2	 	Generation, distribution and sale of electricity and related activities.	

2.3	 	Fuel and oil processing	

2.4	 	Purchase, sale and storage of fuel and oil	

2.5	 	Production, repairs and installation of indicators and gauges	

2.6	 	Production, installation, repairs, upgrading, inspection and periodic tests of stated/specified pressure equipment.	

2.7	 	Installation, repairs and inspection of gas equipment.	

2.8	 	Installation, repairs and inspection of specified electrical equipment.	

2.9	 	Purchase of goods to be sold and sale (of goods).	

2.10	 	Administration of residential and non-residential estate.	

2.11	 	Automatic data processing.	

2.12	 	Accounting.	

2.13	 	Business Activity in the field of waste management.	

2.14	 	Economic and organizational consultancy	

2.15	 	Rental of motor vehicles.	

2.16	 	Lease of estate/property, residential and nonresidential space with provision of other than basic services	

2.17	 	Gas distribution and sale	

2.18	 	Leasing of goods and chattels	

2.19	 	Operation of water mains and sewer systems	

2.20	 	Performance of activities in the field of safety and health protection during work	

2.21	 	Technical and organizational activities in the field of fire protection	

3. Acting on behalf of the Company

3.1	 	Either all members of the Board of Directors jointly or Board Chairman, or one of the Board members who has been authorized by the Board, act on behalf of the Company. The authorization shall be in writing and signed by at least three members of the Board. Signing on behalf of the Company is carried out in such a way that they put their signatures to the name or seal of the Company.	

3.2	 	Also the proxy or proxies sign on behalf of the Company in accordance with granted procuration. The proxy or proxies sign in such a way that they put their signature and an addition identifying the procuration to the written business name or seal of the Company.	

3.3	 	The persons given in paragraph 1 and 2 of this Article prove their authorization to act on behalf of the Company by an extract from the Commercial Register.	

3.4	 	Employees appointed to specific duties by the Company are authorized according to Section 15 of the Commercial Code to all transactions normally associated with this duty.	

4. Basic capital and shares

4.1	 	Basic capital of the Company is CZK 500,000,000 (in words five hundred million Czech Crowns) and is divided into 100 equity shares of nominal value of CZK 5 million (in words: five million of Czech Crowns) per share that have been issued as certificated registered shares.	

4.2	 	All shares are the registered shares and are not marketable in public. The shares have minimum transferability, the transfer is possible with the prior written approval of the Board of Directors only.	

4.3	 	The company keeps a list of shareholders into which it enters the class and kind of the share, its nominal value, the business name or title and registered office of the legal entity, or name and residential address of a physical entity that is a shareholder, the numerical classification of the share and changes in the said data.	

4.4	 	The Company may, under the conditions pursuant Section 161a(1) of the Commercial Code, acquire its own shares.	

4.5	 	The basic capital of the company is completely paid off. At the foundation of the company the original basic capital was paid off by non-monetary contributions of the founders of the Company.	

5. Company Bodies
The Company has the following bodies:
·	General Meeting
·	Board of Directors
·	Supervisory Board.
6. General Meeting

 	 	General Meeting is the highest body of the Company. The shares ownership gives the right to the shareholders to participate and vote in the General Meeting, to require and receive explanations with regard to the Company related matters discussed at the General Meeting, and to put forward proposals and counterproposals pursuant to the Articles of Association.	

6.1	 	Scope of General Meeting	

6.1	 	The scope of the General Meeting includes:	
 	 	a)	decide on amendments to the Articles of Association, except where an amendment concerns a change resulting from an increase of registered capital decided by the board of directors under section 210, or a change resulting from other legal facts;	

 	 	b)	decision-making regarding increasing or reducing the registered/basic capital or authorization of the Board of Directors, pursuant to Section 210 of the Commercial Code or possibility to set off the receivables vis-à-vis the Company against the receivable for payoff (paying up) of the issue price of shares	

 	 	c)	decide to reduce the company's registered capital and to issue debentures under section 160 of the Commercial Code;	

 	 	d)	elect and recall members of the board of directors, unless the Articles of Association determine that such members are elected and recalled by the Supervisory Board (Section 194(1) of the Commercial Code)	

 	 	e)	elect and recall the members of the supervisory board and other bodies as stipulated by the articles of association, with the exception of members of the supervisory board elected and recalled under section 200;	

 	 	f)	approve the company’s annual and extraordinary financial accounts and consolidated financial accounts and, if required by the law, interim financial accounts, decide on the distribution of profit or payment for a loss and determination of director’s royalties/fee;	

 	 	g)	decide on the financial remuneration of members of the Board of Directors and the Supervisory Board;	

 	 	h)	decide on public tradability of the participants' securities of the company in accordance with a specific legislative regulation and on revoking the tradability	

 	 	i)	decide to wind up the company in conjunction with its going into liquidation, to appoint and recall the liquidator, including determining the amount of the liquidator’s remuneration, approve the plan for distribution of the liquidation balance;	

 	 	j)	decide on the company's merger, transfer of assets to a sole shareholder, or division, or, if appropriate, change of the legal form of the company;	

 	 	k)	decide to conclude a contract subject of which is the transfer of the undertaking or its part and its lease, or a resolution on concluding this contract with a controlled person;	

 	 	l)	approve negotiations made on behalf of the company before the company's establishment under Section 64 of the Commercial Code;	

 	 	m)	approve the controlling contract (Section 190b), contract on profit transfer (Section 190a) and contract on silent partnership, and their changes;	

 	 	n)	decide on other matters which this Code or the Articles of Association entrust to the competence of the General Meeting.	

6.2	 	Convocation of the General Meeting	

6.2.1	 	A general meeting is held at least once a calendar year no later than six months after the end of the last day of the accounting period. The general meeting is convened by the board of directors, or by one of its members if the board of directors fails to agree on its convening without undue delay and the law stipulates a duty to convene a general meeting, or if the board of directors lacks a quorum long-term, unless the law provides otherwise.	

6.2.2	 	The shareholders who have owned the registered shares shall be notified of the General Meeting through an notification mailed to the registered address or residence stated in the list of shareholders at least 30 days prior to the stated term of the General Meeting.	

6.2.3	 	In accordance with provision of Section 181(1) of the Commercial Code ( it applies only to the letter a) , the Board of Directors shall call the Extraordinary General Meeting if:	

 	 	a)	it is required by a shareholder or shareholders who hold shares whose total nominal value exceeds 3 per cent of the registered capital of the Company. The request must include all matters to be discussed at the General Meeting;	

 	 	b)	the Board of Directors ascertain, based on any financial accounts, that the company’s loss has exceeded that amount whose unpaid loss, if covered from the company’s available resources, would reach half of the registered capital of the company, or the Board of Directors ascertain that company has become bankrupt.	

6.2.4	 	The Board of Directors shall convene the Extraordinary General Meeting, according to Article 6.2.3 a), in that manner that the General Meeting be held no later than 40 days as of the day on which the request for convening the Extraordinary General Meeting was received. The time limit stipulated in Article 6.2.2 shall be shortened to 15 days	

6.2.5	 	The General Meeting may be also called by:	

 	 	a)	the Supervisory Board, if it is in the interests of the Company. In this case the Supervisory Board proposes necessary actions at the General Meeting;	

 	 	b)	the shareholder or shareholders who hold shares whose total nominal value exceeds 3 per cent of the registered capital of the Company, if the Board of Directors fails to meet its obligation according to Article 6.2.3 of the Articles of Association and if they are authorized by a court to call the Extraordinary General Meeting on the basis of their claim.	

6.2.6	 	In case that the General Meeting does not constitute a quorum according to Article 6.3.5, the Board of Directors shall call a Substitute General Meeting. The Substitute General Meeting is called in the way as specified in Article 6.2.2 with relevant term shortened to 15 days. The notification of the Substitute General Meeting must be published within 15 days from the date of the original General Meeting at the latest. The Substitute General Meeting shall be held within 6 weeks from the date of the original General Meeting, shall have the unchanged agenda and a quorum irrespective of the stipulations of Article 6.3.5 of these Articles of Association.	

6.2.7	 	The General Meeting notification shall include:	

 	 	a)	the company and the registered office;	

 	 	b)	the place where and the date and hour when the general meeting will be held;	

 	 	c)	the agenda of the General Meeting;	

 	 	d)	whether it is an Ordinary, Extraordinary or Substitute General Meeting;	

 	 	e)	the decisive day with regard to participation in the General Meeting;	

 	 	f)	other data as required by the Commercial Code.	

6.2.8	 	On the request of a shareholder or shareholders as specified in Article 6.2.3 a), the Board of Directors shall include the requested matter to the General Meeting’s Agenda. If the request has been received after notification of the General Meeting Date, the Board of Directors shall publish the addition of the General Meeting’s agenda in the way as specified in Article 6.2.2 within 10 days prior to the General Meeting. If such notification has not been possible, the additional matters may be included into the agenda only in participation and with consent of all shareholders of the Company.	

6.2.9	 	The General Meeting may be cancelled or its date postponed provided the change is published in the same way as valid for the General Meeting convocation according to Article 6.2.2, and that at least one week prior to the announced General Meeting date. The extraordinary General Meeting may be cancelled or its date postponed only if it is requested by the shareholder/shareholders as specified in Article 6.2.3 a).	

6.3	 	Participation and Voting at the General Meeting and Decision-Making	

6.3.1	 	The right to take part in and vote at the General Meeting may be exercised by a person registered in the shareholders’ list on the day of holding the General Meeting.	

6.3.2	 	A shareholder can take part in and vote at the General Meeting personally or through a person authorized by him/her in writing. The condition of his/her registration is submission of an identity document. If the shareholder is a legal entity, its statutory body must deliver the extract from the Commercial Register or from similar register and an identity document. In addition, the proxy of the legal entity shall submit formally verified power of attorney. A member of the Board of Directors or Supervisory Board of the Liberec Cogeneration Plant cannot be the proxy of a shareholder. A shareholder, represented based on a power of attorney at the General Meeting by another person, may take part at the General Meeting as a guest, but he/she can neither take the floor nor vote. The power of attorney may be withdrawn after the roll call at the General Meeting.	

6.3.3	 	The shareholders present at the General Meeting sign an attendance list containing the shareholder’s name or company, birth certificate number or identification number of organization, domicile (registered office), and numbers and nominal values of shares owned by the shareholder. If a shareholder exercises his/her rights through a proxy, the attendance list must include, in addition to the above specified data, also the proxy’s name and domicile. The power of attorney is added to the attendance list. If the Company denies to register a certain person in the attendance list, it shall make a record of this fact into the attendance list, including the reason for denial/refusal.	

6.3.4	 	The General Meeting constitutes a quorum, if the shareholders present personally or through their proxies have owned the shares whose total value represents more than 90 % of the basic capital of the company. If the General Meeting does not constitute a quorum within sixty minutes from the time stated in its invitation note as the beginning of the General Meeting, the Board of Directors shall inform the shareholders of the term of the Substitute General Meeting in the way specified in Article 6.2.6 of these Articles of Association. Attendance of the shareholders is verified prior to each voting; the preceding provisions apply mutatis mutandis.	

6.3.5	 	On voting each share represent one vote. A shareholder cannot exercise a voting right:	
 	 	a)	attached to an interim certificate if he is in arrears with payments towards the issue price of not fully-paid shares or its part;	
 	 	b)	if the general meeting is deciding on valuation of his investment contribution other than cash;	
 	 	c)	if the general meeting is deciding on whether a contract is to be concluded with him or with a person with whom he acts in concert, unless the contract in question is the controlling contract or the contract on a profit transfer, or that an advantage is to be bestowed to him or to a person with whom he acts in concert or that he or a person with whom he acts in concert is to be discharged from performance of an obligation and/or that he is to be recalled from the office of a company’s body or of a member of a that body due to his breaching an obligations during his exercise of that office; decision-making concerning an appointment of a company body or of a member of that body is not considered as a decision-making on the conclusion of a contract;	
 	 	d)	if he breached his duty to make a offer for taking over under section 183b of the Commercial Code;	
 	 	e)	if he breached his duty under section 183d of the Commercial Code;	
 	 	f)	in other cases prescribed by the law.	

6.3.6	 	Prior to voting on individual items of the agenda, all necessary explanations must be given and the General Meeting must be informed about all proposals and counterproposals.	

6.3.7	 	Before the General Meeting decides about the election of the Board of Directors and Supervisory Board members, the chairman shall verify the fulfillment of conditions under articles 7.2.2 and 8.2.2 of the Articles and shall inform the General Meeting about the result. Election of members of the body is carried out as follows:	

 	 	a)	draft ballot of body members shall be prepared by the Board of Directors	
 	 	b)	a candidate proposed by the existing Board of Directors for some of company bodies shall in advance give his approval to such proposal. If the candidate is proposed during a General Meeting, the candidate concerned shall express his/her approval orally and that shall be recorded in the minutes. If the proposed candidate is not present for serious reasons, his/her opinion shall be submitted in writing and officially authorized.	
 	 	c)	the general meeting shall vote on each candidate for company bodies individually; General Meeting chairman shall introduce the individual candidates.	
6.3.8	 	The shareholders vote at the General Meeting by acclamation. First it is voted on the Board of Directors proposal, and then, if it has not passed, on other proposals in the sequence they have been put forward. It the proposal submitted by the Board of Directors has passed, other proposals are not voted on. The Board of Directors chairman shall decide about order of questions. Who votes for? Who votes against? Who abstained from voting? The voting cannot be interrupted. The counting of votes shall be carried out by persons authorized for counting of votes; they convey the result to both the chairman and the minutes clerk of the General Meeting. The Chairman announces the result of voting to the attending. The Chairman, authorized in accordance with this Article, is responsible for the voting procedure, according to Article 6.4.1. of these Articles.	

6.3.9	 	The General Meeting decides by majority of votes of the shareholders present, except the decisions when the Law requires qualified majority. A notarized record must be made of the decisions required by the Law. The General Meeting decides by two thirds of votes of the shareholders present about election and withdrawal of Board of Directors members and about conception of entrepreneurial policy of the Company and its changes.	

6.3.10	 	Member of the Board of Directors or of the Supervisory Board has the right to alert the General Meeting of inappropriate command by the General Meeting and to request a record of the protest into the Minutes of the General Meeting.	

6.4	 	General Meeting Procedure	

6.4.1	 	The General Meeting elects its Chairman, Minutes Clerk, two Verifiers of the Minutes, and a person/persons charged with counting the votes (scrutineers). The proposal for these persons is put forward at the beginning of the General Meeting by the Chairman of the Board of Directors or by another authorized member of the Board of Directors and he/she conducts the proceeding until the General Meeting Chairman is elected. The functions of Chairman, Minutes Clerk and Scrutineers can be done simultaneously also just by one person. The function of Verifier of the Minutes is incompatible with the other functions.	

6.4.2	 	The General Meeting proceeds according to the individual items of the agenda. Only the person who is called upon by the Chairman, can take the floor.	

6.4.3	 	Each participant can ask for explanations and submit proposals to the agenda discussed at the General Meeting through an application to take the floor which he/she receives at the registration center and hands it over personally to the scrutineer before a decision to the discussed item is adopted, and/or before the Chairman of the General Meeting finishes the discussion of the relevant item.	

6.4.4	 	If necessary, the Chairman of the General Meeting can, at his own discretion, adjourn the Meeting for up to 30 minutes.	

6.4.5	 	The Minutes of the General Meeting are elaborated which include:	

 	 	a)	Company and registered office of the Company;	
 	 	b)	place and time of the General Meeting;	
 	 	c)	names of the Chairman, Minutes Clerk, verifiers and scrutineer/scrutineers;	
 	 	d)	description of important events during the General Meeting, as well as important declarations;	
 	 	e)	written presentations and declarations are enclosed to the Minutes;	
 	 	f)	a decision of the General Meeting stating a result of voting;	
 	 	g)	the protests of a shareholder, member of the Board of Directors or of the Supervisory Board against a particular decision, if the protesting party requires so.	

 	 	The Minutes are signed by the Minutes Clerk and Chairman of the General Meeting. Two verifiers verify the correctness of the Minutes by appending their signatures. Proposals and statements presented for discussion at the General Meeting and the list of persons attending the General Meeting shall be attached to the Minutes of the General Meeting.	

6.4.6	 	The Board of Directors ensures that the General Meeting Minutes are made available by thirty days from the termination of the General Meeting. The Minutes together with the invitation to the General Meeting and an Attendance record are kept in the Company’s archives for the whole period of its existence. Each shareholder has the right to inspect the Minutes and to request delivery of a copy of the Minutes.	

 	 	However, the Board of Directors can rule that a copy of the Minutes will be delivered only after covering the expenses incurred and can assess an appropriate lump sum of these expenses.	

7. Board of Directors

7.1	 	Status and range of powers of the Board of Directors	

 	 	The Board of Directors is the statutory body of the Company, which manages its activity and acts in its name according to article 3 of the Articles of Association. If the company was wound up, or if a bankruptcy order was adjudged in respect of its assets, the statutory body shall act only within the powers which have not passed to the liquidator or the bankruptcy trustee. The Board of Directors decides on all Company affairs, unless they fall within the powers of the General Meeting or the Supervisory Board under the Commercial Code or the Articles of Association.	

 	 	The Board of Directors, in particular :	

 	 	a)	organizes and manages the Company's activity,	

 	 	b)	exercises the employer's rights towards the Company's employees in accordance with labor-law regulations,	

 	 	c)	is responsible for the proper accounting and trade book management/keeping of the Company; it selects the Company's auditor,	

 	 	d)	is responsible for the elaboration of proper financial statement and of proposals for profit distribution,	

 	 	e)	submits financial statements, reports on the business activity of the Company and the status of its assets	

 	 	f)	calls the General Meeting according to the procedures established by the Articles of Association or Law and organizationally secures it;	

 	 	g)	keeps proper records into the List of Shareholders;	

 	 	h)	appoints and recalls the General Director of the Company and staff directly subordinated to him/her included into the stated range of functions, assigns their duties and supervises their activities,	

 	 	i)	confers a procuration	

 	 	j)	approves proposals for founding another trading companies with a property share of the Company; decides on the entry into the already founded trading companies, and/or on terminating the participation in them; the Board of Directors is entitled to make monetary and tangible contributions into those companies totaling up to one third of the basic/registered capital of the Company, in the period between the successive General Meetings,	

 	 	k)	approves the plan of the Company.	

7.1.2	 	Pursuant to Section 18 of the Commercial Code, the Board of Directors has an exclusive right to dispose of the Company’s trade secrets, in particular the right to grant permission to someone else to use a particular trade secret and to determine the conditions of such use.	

7.1.3	 	The Board of Directors is obliged, in the year when its or Supervisory Board’s term of office expires, to put on the nearest General Meeting agenda the election of Board of Director’s or Supervisory Board’s members.	

7.2	 	Status and range of powers of the Board of Directors	

7.2.1	 	The Board of Directors consisting of 6 members elected by the General Meeting consisting of shareholders and non-shareholders is a statutory body of the Company. The Board of Directors is elected for four-year period. However, its function does not expire until a new Board of Directors is elected; the term of office should not be longer than five years. The function of the Board of Directors’ member cannot be substituted.	

7.2.2	 	A member of the Board of Directors may only be an individual (natural person) who complies with the general conditions for the conduct of a trade under a special law, and on whose part here is no impediment to the conduct of a trade under a special law, irrespective of the object of the Company’s business activity. If a member of the Board of Directors ceases to comply with the general conditions for the conduct of a trade under the Commercial Code or a specific legislative regulation, his/her function expires herewith.	

7.2.3	 	A member of the Board of Directors can withdraw from the function by his/her written statement delivered to the Board of Directors or the General Meeting. In such a case his/her function expires on the date, when his/her withdrawal has been or should have been discussed by the Board of Directors, unless both parties agreed upon other term or his/her withdrawal is negotiated or should be negotiated by the General Meeting.	

7.2.4	 	The Board of Directors whose number of members elected by the General Meeting has not dropped under a half has the right to appoint substitute members of the Board of Directors instead of the members whose membership ceased or who have withdrawn from their functions for the period till the next General Meeting.	

7.2.5	 	If a new member of the Board of Directors has been elected by the General Meeting during the Board’s term of office, his/her function expires with the Board’s term of office.	

7.3	 	Board of Directors Activities	

7.3.1	 	The Board of Directors elects its Chairman and Deputy Chairman out of its members. The chairman organizes activities of the Board, chairs its meetings, and acts on behalf of the Board of Directors outwardly. The Board of Directors has right to withdraw its Chairman and Deputy Chairman any time.	

7.3.2	 	The Deputy Chairman substitutes the Chairman in full extent if the latter is not present. The oldest present Board member substitutes both the Chairman and Deputy Chairman in full extent if they are not present.	

7.3.3	 	The meetings of the Board of Directors are called by the Chairman. Unless agreed otherwise by all members of the Board of Directors, the meetings are called by a written notice that shall be delivered to all members of the Board of Directors at least eight days prior to the meeting. The notice must include the agenda of the meeting. Any changes or amendments of the agenda proposed by any Board of Directors’ member must be agreed on by the Board of Directors by voting. As a rule, the meetings are held at the place stated by the Chairman of the Board of Directors and at least quarterly. The Chairman shall call the meeting whenever it is requested by at least two members of the Board of Directors. If the Chairman has not called the meeting, though he was obliged to do it, any member of the Board of Directors has the right to call it.	

7.3.4	 	Any member of the Board of Directors has one vote on voting. Absolute majority of votes of all Board of Directors’ members present is needed to pass a decision. In case of equality of votes, the vote of the Chairman is decisive. An approval of at least five members of the Board of Directors is required to adopt a decision according to Article 7.1.1 e), k) and i).	

7.3.5	 	The meeting of the Board of Directors constitutes a quorum, if at least four members of the Board are present. If an absent Board member wishes to express his/her opinion to a particular item of the agenda, he/she must do it in a written form, while his/her opinion is not considered a valid vote.	

7.3.6	 	In urgent cases which brook no delay, there is possibility of voting in writing, or by means of communication technology outside meeting room, if this is agreed upon by all members of the Board of Directors. Members voting in such a manner are then considered as having been present at the meeting.	

 	 	For adoption of Board of Directors resolution, it is necessary that more than half of Board of Directors members vote for it. The decisions made in such a way must be put in the minutes of the immediately following meeting of the Board of Directors.	

7.3.7	 	A person charged by the Board of Directors elaborates the minutes of the meeting and decisions that are signed by the Chairman of the Board of Directors or chairing person and by the person. The minutes must include the names of the members of the Board of Directors who voted against individual decisions of the Board of Directors or abstained.	

7.4	 	Duties of the Members of the Board of Directors	

7.4.1	 	The members of the Board of Directors shall act with due diligence on performing their functions and to keep the confidential information and facts whose disclosure to the third persons would cause damage to the Company.	

7.4.2	 	The members of the Board of Directors have to respect the limitations relating the prohibition of competitive conduct as follows from Section 196 of the Commercial Code.	

7.4.3	 	Consequences of breach of duties as stated in paragraphs 7.4.1 and 7.4.2 hereunder follow from general mandatory legal regulations.	

7.4.4	 	The members of the Board of Directors shall be liable to the Company for the damage caused by breach of his/her duties on performing his/her function under conditions and to the extent as stated by general legal regulations. If the damage is caused by more members of the Board of Directors, they shall be liable for it jointly and severally.	

7.4.5	 	The prohibition of internal trading determined by the Commercial Code in Section 196a applies to conclusion of agreements/contracts between Board of Directors members and the Company. Any compensation, the right to which does not follow from a legislative regulation, made by the company on behalf of the Board of Directors (Supervisory Board) member may be provided exclusively with consent of the general meeting or on condition that the right to the compensation is included in the agreement on the tenure.	

8. Supervisory Board

8.1	 	Status and range of powers of the Supervisory Board	

8.1.1	 	The Supervisory Board is an inspection body of the Company. It supervises performance of the Board of Directors and implementation/realization of the Company's business activity. Particularly, the Supervisory Board:	

 	 	a)	verifies the procedures relating to the Company's matters whenever it examines accounting documents and files of the Company;	

 	 	b)	puts forward proposals for discussing matters by the Board of Directors and at the next General Meeting;	

 	 	c)	reviews yearly financial statements and proposals for distribution of profit, and submits a report on the review results to the General Meeting every year;	

 	 	d)	represents the Company in a possible dispute against a member of the Board of Directors, if any;	

 	 	e)	calls the General Meeting, if it is in the interests of the Company;	

 	 	f)	performs other tasks designated by the Law (e.g. by Section 182(1)(b) and (c) of the Commercial Code).	

8.1.2	 	The Supervisory Board members take part in the General Meeting of the Company and are obliged to inform the General Meeting about the results of their supervisory activity.	

8.2	 	Structure, Establishment and Term of Office of the Supervisory Board	

8.2.1	 	The Supervisory Board has three members. Two of the members are elected by the General Meeting, and the third one is elected and withdrawn by the Company’s employees. The Board of Directors specifies organization and method of election of this member. The function of the Supervisory Board’s member cannot be substituted.	

8.2.2	 	A member of the Supervisory Board may only be an individual (natural person) who complies with the general conditions for the conduct of a trade under a special law, and on whose part there is no impediment to the conduct of a trade under a special law, irrespective of the object of the Company’s business activity. Supervisory Board member shall not be simultaneously a member of the Board of Directors, proxy or another person authorized to act in the name of the company.	

8.2.3	 	A member of the Supervisory Board may withdraw from his/her function by written notice delivered to the Supervisory Board or the body that elected it. In this case the performance of his/her function expires on the date, when his/her withdrawal was discussed or should have been discussed by the Supervisory Board or the body that elected it, if both parties have not agreed upon other term.	

8.2.4	 	The Supervisory Board which has one more member elected by the General Meeting, may appoint a substitute member till the next General Meeting, however not as a substitute for the member elected by the employees of the Company.	

8.2.5	 	A member of the Board of Directors, Proxy or Company’s Auditor may not become a member of the Supervisory Board.	

8.2.6	 	The Supervisory Board’s member is elected for four years. However, his/her function does not expire until a new Supervisory Board’s member is elected; his/her term of office should not be longer than five years.	

8.2.7	 	The term of office commences from the day of electing both Supervisory Board’s members by the General Meeting according to Article 8.2.1, the time of the third member election by employees is organized by the Board of Directors in accordance with the above term.	

8.2.8	 	If a new Supervisory Board member has been elected by the General Meeting or by employees during the term of office according to Article 8.2.7, his/her function expires with the term of office of other Supervisory Board members.	

8.3	 	Organization of activity of the Supervisory Board	

8.3.1	 	The Supervisory Board elects its Chairman out of its members, who organizes the Supervisory Board activities, chairs its meetings, and acts on its behalf (outwardly). The Supervisory Board has the right to withdraw its Chairman any time.	

8.3.2	 	The Supervisory Board shall always decide on the meeting called and held in compliance with the regulations of Articles 8.3.4 through 8.3.8 hereunder, with the exception of the case as presupposed in the provision of Article 8.3.3.	

8.3.3	 	In urgent cases, which brook no delay, there is possibility of voting in writing, or by means of communication technology outside meeting room, if this is agreed upon by all members of the Supervisory Board. Members voting in such a manner are then considered as having been present at the meeting. For adoption of Supervisory Board resolution, it is necessary that more than half of Supervisory Board members present vote for it. The decisions made in such a way must be put in the minutes of the immediately following meeting of the Supervisory Board.	

8.3.4	 	The Supervisory Board’s meeting is called by its Chairman at least twice a year. However, the meeting shall be called whenever it is requested by two of the Supervisory Board’s members in writing and with specification of the reason.	

 	 	If the Chairman has not called the meeting, though he was obliged to do it, any member of the Supervisory Board has the right to call it. During absence of the Supervisory Board Chairman the meetings are called and chaired by an authorized member of the Supervisory Board.	

8.3.5	 	The members of the Supervisory Board must be informed of the meeting and its agenda at least 8 days beforehand. If they are not informed in this way, the meeting may be held only if those members who have not received any of the above information are present and agree with the holding of the meeting.	

8.3.6	 	The Supervisory Board’s meeting constitutes a quorum, if all members of the Supervisory Board are present.	

8.3.7	 	Minutes of the Supervisory Board’s meeting are elaborated and signed by the Chairman of the Supervisory Board. The invitations to the meeting shall be attached to the minutes that include brief description of the meeting’s content.	

 	 	The minutes must include the opinions of the members of the minority of members of the Supervisory Board who voted against individual decisions of the Supervisory Board or abstained, if they request it, and always there shall be recorded a different opinion of the Supervisory Board member elected by the employees.	

8.3.8	 	Each member of the Supervisory Board has one vote on voting in the Supervisory Board. Majority of votes of the Supervisory Board’s members is needed to pass a decision.	

8.3.9	 	Limitations and duties as stated in Article 7.4 hereunder apply also to the members of the Supervisory Board.	

9. Economy/Management of the Company
Accounting period of the Company is a calendar year.

9.1	 	Reserve Fund	

9.1.1	 	The Company creates the Reserve Fund, in compliance with Section 217(2) of the Commercial Code, from a net profit shown in the annual financial accounts for the year in which it first makes a net profit; the amount to be allocated into the fund being at least 20 per cent of the net profit. This fund shall be augmented on an annual basis by an amount of 5 per cent of the net profit, until the amount of the reserve fund reaches 20 per cent of the registered capital. The reserved fund created in the aforesaid manner may only be used to settle the loss, about which the General Meeting decides.	

9.1.2	 	The General Meeting decides about creating the possible Reserve Fund above the level of 20 % of the basic capital.	

9.1.3	 	If the Company shows in its accounting own shares or interim certificates, it has to create a Reserve Fund according to Section 161d(2) of the Commercial Code.	

9.1.4	 	The sum from the basic capital decrease approved by the General Meeting, designated to cover future losses up, is transferred into the Reserve Fund according to Section 216a(1)(b) of the Commercial Code. This sum must not exceed 10 per cent of the registered capital.	

9.1.5	 	The Board of Directors decides about the use of the Reserve Fund according to articles 9.1.1 and 9.1.2 hereunder above the level of 20 % of the registered capital, or about that part of the Reserve Fund which was formed according to articles 9.1.3 and 9.1.4 hereunder, unless stipulated by the Law or the Articles of Association that the appropriate decision falls into the jurisdiction of the General Meeting.	

9.2	 	Social Fund	

9.2.1	 	The Company establishes a Social Fund.	

9.2.2	 	Amount of contribution into the Social Fund is approved by the General Meeting at the proposal of the Board of Directors.	

9.2.3	 	The rules for use of the Social Fund are set by the Board of Directors.	

9.3	 	Other Funds	

 	 	According to need, the General Meeting may decide about establishment of other funds of the Company.	

9.4	 	Financial Statements	

9.4.1	 	The Board of Directors ensures elaboration of the financial statements and proposal of profit distribution. The financial statements verified by the auditor and reviewed by the Supervisory Board are submitted to the General Meeting. At the same time the Supervisory Board shall submit to the General Meeting a report on results of the review.	

9.4.2	 	The financial statements must be elaborated in the way conforming to the general mandatory legal regulations and principles of proper accounting in such a way that they give full information of property and financial situation of the Company and of the level of profit or loss achieved in the last commercial year.	

9.5	 	Method of the Company's profit distribution	

9.5.1	 	The General Meeting decides on the profit distribution at the Board of Directors proposal, following reassessment by the Supervisory Board.	

9.5.2	 	The Company profit attained in the accounting period is split into dividends and royalties, after subtracting amounts for taxes, subsidy to the reserve fund and other purposes approved by the General Meeting. The Company is not authorized to divide the profit between shareholders (dividends), determine profit share for the Board and the Supervisory Board members, (remuneration) or the profit share for employees, in the event that the net trade capital of the Company to the last day of the accounting period, ascertained from the ordinary accounting closing is, or would be in consequence of the profit division lower that the registered capital of the Company, increased by:	

 	 	- subscribed nominal share value, if the Company shares were subscribed to increase the registered capital and the new registered capital was not recorded in the Commercial Register to the day of annual financial statement elaboration	

 	 	- reserve fund created from the profit in segment, which can be used only to cover Company losses	

 	 	- reserve fund being created pursuant to Section 161D and 216a of the Commercial Code.	

9.5.3	 	By this is not excluded that the General Meeting can decide that the undivided part of the profit will be used to increase the Company’s registered capital.	

9.6	 	Dividends	

9.6.1	 	The rights of shareholder to dividends arise by the General Meeting's decision.	

9.6.2	 	Claim on dividends has the shareholder, which is an owner of the Company shares to the day determined by the General Meeting, which decided on the dividend payment and is to this day presented in the shareholder summary as an owner.	

9.6.3	 	The General Meeting, which decided on reimbursement of dividends will designate the day of it’s payment, otherwise it is payable within 3 months from the day, when the resolution on it’s division was adopted.	

9.6.4	 	The right to dividends is forfeited in a four-year forfeit period, which runs as of the maturity day of the dividends. Dividends deposited with the Company do not bear interest. The General Meeting can designate detailed conditions on manner of the dividend payment execution.	

9.7	 	Remuneration and royalties of the members of the Company's bodies	

 	 	The members of the Company’s bodies are entitled to remuneration and profit share (royalties) for performing their functions. Furthermore, the members of the Company’s bodies have the right to compensation for all expenses incurred in connection with the performance of their functions. The Board of Directors can establish the height of the costs bulk consideration. The General Meeting decides about the total amount of bonuses, manners of payment and due date of royalties. The rules for remuneration (royalties) distribution among the Board of Directors and Supervisory Board members are designated by the Board of Directors, based on the decision of the General Meeting.	

9.8	 	Method of loss settlement	

9.8.1	 	The General Meeting at the Board of Directors proposal, rules on the manner of loss settlement, incurred in the past trade year.	

9.8.2	 	In case of need the losses from the Company´s trade shall be covered from the Reserve Fund primarily. The Reserve fund utilization and approval are depicted in Article 9.1 of these Articles. If the Reserve Fund is not sufficient, the remaining loss can be left uncovered, eventually for the purposes of its reimbursement decrease the Company´s registered capital.	

10. Rules for increasing and reducing the registered capital of the Company

10.1	 	Any increase or reduction in the registered capital of the Company is decided by the General Meeting under conditions designated by these Articles, generally binding legal precepts and in a manner from them ensuing. Invitation to the General Meeting shall entail all the essentials determined by the Commercial Code. The General Meeting can authorize the Board of Directors, to decide under conditions assigned by the Commercial Code and these Articles, to increase the registered capital by a new share subscription, or from own Company resources, with the exception of undistributed profit, up to 1/3 of the present registered capital amount at the most, and for a period not longer than until the next regular General Meeting.	

10.2	 	During the registered capital increase all forms listed in the Commercial Code are applicable, i.e. a new share subscription by monetary or non-monetary deposits, by conditional increase in the registered capital, by registered capital increase from the Company’s own resources, by issuing new shares or by increasing the nominal value of current shares or by combined increase in the registered capital.	

10.3	 	The registered capital may be increased by subscription for new shares only if the shareholders have paid in full the issue rate of all previously subscribed shares. This restriction does not apply if the registered capital is to be increased by subscription for shares and their issue rate is only payable by non-monetary contributions. To increase the registered capital by share subscription, the provisions listed in these Articles apply.	

10.4	 	Each shareholder has a priority right to subscribe a part of the new Company shares in the range of his/her Company’s registered capital share, providing the shares are subscribed by monetary deposits. In the General Meeting resolution on an increase of the registered capital the priority right can be deleted or limited. This resolution requires approval of at least three quarter majority of votes of the shareholders present. The priority right connected with the shares is independently transferable from the day, when the resolution by the General Meeting was recorded into the Commercial Register on registered capital increase. During the priority right transfer the incumbency to offer the right to other shareholders applies.	

10.5	 	The share subscription runs in two rounds as a rule. In the first round the existing shareholders may exercise their pre-emptive right, and according to the General Meeting resolution, also other physical and legal entities. In the second round, non-subscribed shares are offered to the existing shareholders according to how they exercised their pre-emptive rights in the first round. The Board of Directors decides about the appropriate way of offering the shares not subscribed by pre-emptive right.	

10.6	 	The impacts of an increase in the registered capital occur from the day of its record in the Commercial Register. The Board of Directors is duty bound to file a proposal on the registered capital amount record, following a stock subscription corresponding with the extent of the increase, and after remittance of at least 30 % of their nominal value, including eventual share premium, if monetary deposits are concerned, and following the payment of all non-monetary deposits.	

10.7	 	If the subscriber breaches his obligation to remit the issue rate of the subscribed shares, or a due portion thereof, he shall pay interest on the amount in default at 20 % per annum.	

10.8	 	Provided that the subscriber failed to reimburse the subscribed shares issue rate, or the amount due, the Board of Directors shall appeal to him to pay the amount within 60 days of the appeal’s delivery. After idle elapse of this term the Board of Directors shall expel the subscriber from the Company and shall requests from him to return his interim certificate within appropriate time limit, as assigned by the Board. Should the expelled subscriber not return his interim certificate within time limit assigned, the Board of Directors shall declare it void. The Board of Directors shall issue either a new interim certificate or shares instead to a person approved by the General Meeting and this person shall pay the issue rate of these shares.	

10.9	 	Registered capital increase is carried out according to the following rules:	
 	 	a)	the General Meeting rules on the registered capital increase, to which agenda and item on the increase was added	
 	 	b)	within 30 days of adoption of the resolution, the Board of Directors files for it's record into Commercial Register	
 	 	c)	resolution of the record will be published by the Board of Directors in the Commercial Bulletin without delay, after it's record into the Commercial Register	
 	 	d)	the resolution by the General Meeting on increase in the registered capital performs the Board of Directors solely, or contractually through another person	
 	 	e)	in case of incumbency failure to pay issued share rate in term determined by the General Meeting, the subscriber reimburses interest according to paragraph 9	
 	 	f)	the Board of Directors will propose a new registered capital amount into the Commercial Register, effects of this increase commence from the recording day	

10.10	 	A reduction in the registered capital is carried out either by reducing the nominal share value, by removing the shares from circulation based on balloting or on a proposal basis, and eventually waiver the share issue. The General Meeting in accordance with the Commercial Code decides specific conditions of the registered capital decrease method and extent. In case of reducing the registered capital by removing the shares from circulation based on balloting, this must be performed within 10 days at the latest, from the day an order was filed by the Company to number the shares. The course and the balloting results must be certified by notary record, and after the Board of Directors will announce the balloting results in a way stipulated by the Articles of Association for the General Meeting convening, and in extent required by the Commercial Code.	

10.10	 	The Board of Directors is incumbent to announce the extent of the registered capital reduction within 30 days of the day, when the resolution on its reduction was entered into the Commercial Register, to all known creditors whose claims against the Company arose prior to entry of the General Meeting’s resolution into the Commercial Register. The General Meeting’s resolution on the registered capital decrease must also be publicized in Obchodní vestník (Business Journal) twice consecutively, with 30 days apart at least. The Board of Directors files a proposal on the record of the decrease into the Commercial Register, after 90-day elapse from the second announcement of the General Meeting’s decision. The decrease in the registered capital occurs as of its record day in the Commercial Register.	

11. Winding-up and Liquidation of Company

11.1	 	The company’s cession is preceded by its dissolution with or without liquidation, if its registered capital lapses onto a legal successor. Liquidation is also not required if the bankruptcy declaration proposal is rejected due to asset insufficiency, or if no assets remain following the Company’s bankruptcy proceedings.	

11.2	 	The Company is dissolved:	

 	 	a)	on the day of the General Meeting decision,	
 	 	b)	on the day of court ruling on the Company’s dissolution, issued on the bases of persons proposal, and due to reasons presented in Section 68(6) of the Commercial Code, otherwise on the day when this ruling enters legal force,	
 	 	c)	by the day listed in the General Meeting’s resolution, if the Company’s cessation is brought on as a consequence of a merger, registered capital transfer to shareholders, or as consequence of separation, eventually by the day that this resolution was adopted,	
 	 	d)	by abolition of bankruptcy proceedings, after the schedule resolution is met or by bankruptcy proceeding voidance, due to insufficient Company funds to defray bankruptcy costs, or by rejecting bankruptcy proceedings proposal for insufficiency of assets.	

11.3	 	If the proposal to declare bankruptcy proceedings from other reasons than for asset insufficiency of the Company is rejected, the Company is not considered dissolved. If some assets remain following the Company bankruptcy proceeding finalization, dissolution of the Company will be performed.	

11.4	 	During the Company dissolution:	

 	 	 	- with a legal successor, the shareholder rights are governed by Section 220a) of the Commercial Code,	

 	 	 	- with liquidation, the liquidation remnant will be distributed between the shareholder pursuant to Section 220 of the Commercial Code.	

11.5	 	During the Company’s abolition with liquidation, the liquidator is incumbent to request consent by the General Meeting to asset alienation any other way than by public auction.	

11.6	 	The Company ceases to exist on the day of its deletion from the Commercial Register.	

12. Announcements by the Company

12.1	 	The Company's Board of Directors forwards announcements to the shareholder at their addresses listed in the Summary of shareholders.	

12.2	 	The Board of Directors can decide also that the Company’s notices will be published in Obchodní vestník (Commercial Journal), or in the daily press or posted in a place accessible to shareholders at the Company’s headquarters, provided such incumbency does not stem from the law.	

12.3	 	Company bodies resolutions, where the addressee is a shareholder of the Company are forwarded to him by a registered mail to an address listed in the Summary of shareholders.	

13. Final Provisions

13.1	 	Incorporation, legal status and dissolution of the Company, as well as all legal relations deriving from the Company’s Articles of Association, and internal Company labor – legal, and also other relations are governed by generally binding legal precepts of the Czech Republic.	

13.2	 	Eventual dissentions between the Company and shareholders, disputes between the Company and members of its bodies, as well as mutual ones among shareholders, connected with their participation in the Company will be resolved in conciliatory manner. If such dissention cannot be so resolved, a pertinent Czech court will resolve its discussion and decision.	

13.3	 	In the event that certain provisions of the Articles of Association are either due to valid legal order, or due to its changes rendered invalid, ineffective or litigant, or in case some provisions are missing, others remain unaltered. The pertinent provision is succeeded by a relevant legal rule of law, which is by its character and purpose nearest to the intended purpose of the Articles of Association. Provided such a provision of the rule of law does not exist, a solution will be sought, which is customary in trade contact.	

13.4	 	Duration period and manner of Company's document storing	

13.4.1	 	Minutes from General Meetings, along with the General Meetings invitations and lists of attendees, Board of Directors and Supervisory Board minutes, as well as invitations to these meetings along with the lists of attendees are stored at the file room for the duration of the Company existence.	

13.4.2	 	All Company agreements must be stored in the file room for at least 10-year duration, after cessation of the contracting relation, provided a longer term is not designated by generally binding legal precepts. In the event that the above listed period expires at time the company does not exist the incumbency of document storing passes onto the legal successor of the Company. In the case that legal successor does not exist, the liquidator shall ensure document storage in compliance with valid regulations on filing.	

14. Method during Articles of Association supplementation and amending

14.1	 	The General Meeting decides on supplementation and changes in the Articles of Association, if not pertaining to changes in consequence of registered capital increase by the Board of Directors pursuant to Section 210 of the Commercial Code, or about a change which occurred based on other legal actualities.	

14.2	 	Proposal to supplementation or another change in the Articles of Association can submit shareholder, the Board of Directors, or the Supervisory Board.	

14.3	 	Qualified majority can adopt the resolution on changes according to these Articles, i.e., two third votes of the attending shareholders. Notary record must be drawn up about the Articles of Association changes.	

14.4	 	The proposal on Articles of Association changes is compiled by the Board of Directors with regards to cogent provision of the Commercial Code and other generally binding legal precepts. After approval by the General Meeting the Board of Directors secures compilation of the complete wording of the Articles of Association and submits them to pertinent excerpt court.	

14.5	 	If the company contemplates registered capital increase or decrease, stock splitting or integrating more shares into one, altering the form or kind of shares, transcribed share transferability limitations, or its change, the Articles of Association changes enter force to the record day of these actualities into the Commercial Excerpt. Other Articles of Association changes, about which decides the General Meeting, enter force when the General Meeting decided on them, if it does not ensue that they enter force later from the General Meeting’s decision on the Articles of Association changes or from the law.	

14.6	 	If the General Meeting adopts a decision, of which consequence is a change in the Articles of Association wording, this decision compensates the one on the Articles of association change. If from the General Meeting’s decision does not ensue if, eventually in what manner the Articles of Association alter, the Board of Directors will decide on the changes in accordance with the General Meeting’s decision.	

14.7	 	Provided changes in the content of the Articles of Association occur on the bases of whichever legal actuality, the Board of Directors is duty bound to prepare without delay after, when whatever member ascertains such a change complete wording of the Articles of Association.	

15. Articles of Association Effective Date
These Articles of Association become valid and come into force at the moment of their approval by the General Meeting on June 21, 2001.
The Articles of Association of Teplárna Liberec, residing tr. Milady Horákové 641/34a, Liberec 4, dated November 11, 1994, were by the decision of the General Meeting altered and supplemented as follows:

1.	An ordinary General Meeting held April 25, 1996 decided on the Article of Association changes of the joint stock Company. (Notary record NZ 92/96, N 103/96, dated April 25, 1996 on attestation of the General Meeting’s pursuance.)	

2.	An ordinary General Meeting held June 12, 1999 decided on the Articles of Association changes of the joint stock Company. (Notary record NZ 176/97, N 103/96, dated June 12, 1997 on attestation of the General Meeting’s pursuance.)	

3.	An ordinary General Meeting held June 22, 1999 decided on the Articles of Association changes of the joint stock Company. (Notary record NZ 205/2000, N 225/2000, dated June 22, 1999 on attestation of the General Meeting’s pursuance.)	

United Energy a.s., with its registered office in Most - Komorany,
Teplarenska 2, postal code 434 03

BOARD OF DIRECTORS
OF THE JOINT STOCK COMPANY
United Energy, a.s.
pursuant to Article 39 paragraph 5 of the Articles of Association
executed
the full Articles of Association of United Energy, a.s.
with its registered office in Most – Komorany, Teplárenská 2,
postal code 434 03
approved by the Founder on April 28, 1992
as follows from changes and amendments made
by the Ordinary General Meeting's decision on October 15, 1992,
by the Ordinary General Meeting's decision on January 21, 1993,
by the Ordinary General Meeting's decision on July 28, 1993,
by the Ordinary General Meeting’s decision on May 27, 1994,
by the Extraordinary General Meeting’s decision on December 20, 1995,
by the Ordinary General Meeting's decision on May 31, 1996,
by the Ordinary General Meeting’s decision on May 28, 1997,
by the Extraordinary General Meeting’s decision on February 20, 1998,
by the Ordinary General Meeting’s decision on June 24, 1998,
by the Extraordinary General Meeting’s decision on September 28, 1998
and by the Extraordinary General Meeting’s decision on June 29, 2000,
on the basis of other legal facts (Section 173(4) of the Commercial Code)
with an execution of the valid full Articles of Association by the Board of Directors
on April 26, 2001
and a decision of the Ordinary General Meeting on June 28, 2001.
ARTICLES OF ASSOCIATION
of the joint stock company United Energy, a.s.
with its registered seat at Most - Komorany, Teplarenska 2, postal code 434 03
dated April 28, 1992, as amended

CHAPTER O N E
GENERAL PROVISIONS
Article 1
Commercial Name and the seat of the Company
1.	Commercial Name: United Energy, a.s.

2.	Company identification number: 46 70 81 97

3.	Seat: Most - Komorany, Teplarenska 2, postal code 434 03

4.	Legal form of the legal entity: joint stock company

5.	Tax identification number: 206 -46708197

6.	The Company has been established for an indefinite period of time.

7.	The Company was formed on May 1, 1992 and is recorded in part B, insert 242 of the Commercial Register, at the District Court in Ústí nad Labem, as the competent Registration Court.

Article 2
Company Scope of Business Activity
1.	The Company scope of business activity includes:

1.	Generation of electricity.

2.	Generation of heat.

3.	Distribution of heat.

4.	Investor/Engineering activity.

5.	Business activity in waste management.

6.	Business activity in dangerous waste management.

7.	Providing software.

8.	Road truck transport.

9.	Road passenger transport.

10.	Revisions and tests of specified pressure equipment.

11.	Catering.

12.	Accommodation - tourist hostel - category *.

13.	Economic and organization consulting.

14.	Bookkeeping.

15.	Administrative services.

16.	Administration of personnel and wage files.

17.	Activities in security and health protection at work.

18.	Purchase of goods for the purpose of its resale and sale.

19.	Warehousing.

20.	Lease of non-residential space and real properties with providing other than general services.

21.	Washing, ironing, pressing.

22.	Filing services.

23.	Technical/Organizational activity in fire protection.

24.	Digital processing of technical documentation.

25.	Service and assembly of metering devices.

26.	Lease of tangible fixed assets.

27.	Automated data processing.

28.	Consulting activity in environmental and ecological areas (except for the activities listed in the provision of Section 3 and the trades listed in Appendices No. I - III. of Act No. 455/1991 Coll., Trades Licensing Act).

29.	Intermediation activity in business and services.

30.	Sampling of surface- and waste-water.

2.	The Company, as an entrepreneur, undertakes business activity:

1.	based on Act on Business Conditions and Public Administration in the Energy Sectors, No. 222/1994 Coll., and on the State Energy Inspection, as amended (items 1 through 3 of Paragraph 1 of this Article of the Articles of Association),

2.	based on Trade Licensing Act, No. 455/1991 Coll., as amended (items 4 through 30 of Paragraph 1 of this Article of the Articles of Association).

CHAPTER T W O
THE COMPANY REGISTERED CAPITAL AND SHARES
Article 3
The Company registered capital and the extent to which it has been paid up and
the method of paying up the issue price of shares including the consequences of
breaching the duty to pay up the subscribed shares on time
·	The total value of Company’s registered capital is CZK 1,912,932,200 (in words one billion nine hundred and twelve million nine hundred thirty two thousand two hundred Czech crowns).

·	The extent to which the registered capital has been paid up in the amount mentioned in paragraph 1 of this Article of the Articles of Association: 100 per cent.

·	At every increase of the registered capital, the share premium and 50 per cent of the nominal value of shares subscribed by monetary contributions and all nonmonetary (in-kind) investment contribution have to be paid prior to their record into the Commercial Register. The remaining shares subscribed by monetary contributions have to be paid no later than in one year from the record of the increase of registered capital into the Commercial Register.

·	If the subscriber does not pay the issue rate of subscribed shares or its due part, he is called on by the Board of Directors to pay it in allowed time of 60 days from delivery of the notice.

·	When the duty to pay the issue rate of subscribed shares or its due part is breached, the subscriber shall pay 20 per cent (in words: twenty per cent) of the due amount per year.
Article 4
Shares
1.	The Company registered capital mentioned in Article 3 Paragraph 1 is distributed into 10,072,541 shares (in words ten million seventy two thousand five hundred forty one shares).

2.	Type of shares: common stock, no special rights are connected with these shares.

3.	Form of shares: bearer shares.

4.	Value of shares: the Company registered capital is divided into 1,006,309 (in words: one million six thousand three hundred nine) shares with the nominal value CZK 1,000 (in words: one thousand Czech crowns) and into 9,066,232 (in words: nine million sixty six thousand two hundred thirty two) shares with the nominal value CZK 100 (in words: one hundred Czech crowns).

5.	The sum of share nominal values corresponds to the amount of the Company registered capital.

6.	Number of votes connected with one share: one share with nominal value CZK 1,000 (in words one thousand Czech crowns) is connected with the right to apply 10 votes (in words ten votes) at the General Meeting, one share with nominal value CZK 100 (in words one hundred Czech crowns) is connected with the right to apply 1 vote (in words: one vote).

7.	Form of shares: uncertificated shares.

8.	The shares are accepted to be traded in public. The following ISIN was assigned to the shares as the listed securities:

1.	ISIN: CS0008458659 to the shares with the nominal value of CZK 1,000 (in words: one thousand Czech crowns),

2.	ISIN: CZ0005113308 to the shares with the nominal value of CZK 100 (in words: one hundred Czech crowns)

9.	The bearer shares are unrestrictedly transferable. The rights attached to an uncertificated bearer share are exercised by a person recorded in files of uncertificated securities pursuant to a specific act.
Article 5
List of Company shareholders
The list of shareholders owning uncertificated Company shares is substituted by the files of uncertificated securities recorded in compliance with a specific act by the Securities Center (Securities Issuer Register).
CHAPTER T H R E E
INCREASE AND REDUCTION OF THE COMPANY REGISTERED CAPITAL
(CHANGES IN THE COMPANY REGISTERED CAPITAL)
Article 6
Increasing the Company Registered Capital
·	The increase of the Company registered capital is governed by the provision of Section 202 et seq of the Commercial Code.

·	The Company can increase the registered capital as follows:

·	increase of registered capital by subscription of new shares,

·	by a conditional increase of registered capital,

·	by the increase of registered capital from own Company sources,

·	by a combined increase of registered capital,

·	by increase of registered capital by decision of the Board of Directors.

·	General Meeting or the Board of Directors decides on the increase of registered capital based on delegation by the General Meeting in compliance with the Commercial Code and the Articles of Association.

·	The effects of the increase of registered capital start on the day of the record of its amount into the Commercial Register.

·	The terms and the procedure of the conditional increase of registered capital is governed by the provision of Section 160 and Section 207 of the Commercial Code. If the General Meeting decided to issue convertible or priority bonds, it shall simultaneously accept the resolution on the increase of registered capital in such extent, in which convertible rights from convertible bonds or priority rights from priority bonds (Article 3 Paragraph 1 of the Articles of Association) can be applied.

·	The Board of Directors can be authorized by a resolution of the General Meeting, to decide, under the terms specified by the Commercial Code and the Articles of Association, on the increase of registered capital by means of a share subscription or from the Company’s equity, with exception of retained profit, but by no more than one-third of the existing amount of registered capital in the time when the General Meeting authorized the Board of Directors to decide on the increase of registered capital (“the authorization to increase the registered capital”). The Board of Directors’ authorization to increase the registered capital replaces the decision of the General Meeting to increase the registered capital. The authorization must specify nominal value, type, form and format of shares that shall be issued to increase the registered capital. The Board of Directors, within the scope of such authorization, may increase the registered capital even more than once, if the total amount of such registered capital increase does not exceed the fixed limit. If the Board of Directors is authorized to decide on the increase of the registered capital by means of nonmonetary contributions, the authorization to increase registered capital must also contain the specification, which Company body shall decide on the valuation of a nonmonetary contribution based on an expert opinion, such expert or experts having been appointed pursuant to Section 59(3) of the Commercial Code.

·	A notarial deed shall be made on the Board of Directors’ decision. The Board of Directors decision to increase the registered capital is recorded into the Commercial Register. An authorization to increase registered capital shall not be recorded into the Commercial Register. The provisions of Sections 203 through 209 of the Commercial Code shall apply to the procedure to increase registered capital pursuant to Paragraph 6 of this Article as appropriate.

·	The authorization to increase the registered capital may be conferred for a period of up to five years after the day when the General Meeting, which resolved to authorize the increase of registered capital, was held.

Article 7
Rules of the Procedure of the Company Registered Capital Increase
The following rules have to be observed at registered capital increase
·	the General Meeting decides on the increase of the registered capital based on the Board of Directors' proposal, or the Board of Directors based on the authorization of the General Meeting,

·	the invitation to, or notice of, a General Meeting shall also include, in addition to the particulars under section 184(5) of the Commercial Code, at least the information under Section 202(2) to (4) of the Commercial Code.

·	by 30 days from the resolution of the General Meeting, the Board of Directors shall file an application for its entry in the Commercial Register,

·	resolution on the entry shall be published by the Board of Directors without undue delay after its entry into the Commercial Register,

·	resolution of the General Meeting on increase of the registered capital is performed by the Board of Directors,

·	in case of breach of the duty to pay the issue rate of subscribed shares the subscriber pays the due interest in accordance with Article 3 Paragraph 4 of the Articles of Association,

·	the Board of Directors shall file an application for entry of the new amount of the registered capital into the Commercial Register. The effects of the registered capital increase start on the day of such entry.

Article 8
Reduction of the Company Registered Capital
·	The reduction of the Company registered capital is possible only based on the decision of the General Meeting. Reduction of the registered capital is governed by the provisions of Sections 211 through 216b of the Commercial Code.

·	The Company can reduce its registered capital as follows:

·	by decreasing the nominal value of shares and interim certificates,

·	by withdrawing shares from circulation on the basis of a drawing of lots,

·	by withdrawal of shares from circulation on the basis of a public proposal,

·	by abandonment of a share issue.

·	The value of the Company registered capital can not be reduced under the level set by law, CZK 2,000,000 (in words two million Czech crowns).

·	The reduction of the registered capital may not impair the creditors' ability to recover their receivables.

Article 9
Rules of the Procedure of the Company Registered Capital Reducing
·	On the Company registered capital reducing by withdrawing shares from the market the procedure shall follow the following rules:

·	based on drawing (Section 213b of the Commercial Code) the procedure is as follows:

·	the Company shall issue an order to number shares to the Securities Center and simultaneously shall ask for a statement from the registry of uncertificated securities which must also contain the share numbers,

·	no later than ten days from the day when the order for shares numbering was issued, the Board of Directors shall secure the choice of shares by drawing,

·	the course and results of the choice by drawing with publishing of drawn shares shall be certified by a notarial deed,

·	the Board of Directors shall announce the results of drawing in the way set by law and by Article 20 Paragraph 5 of the Articles of Association and the announcement has to comprise the particulars mentioned in Section 213b(3) of the Commercial Code,

·	the Company is obliged to pay at least such a consideration for the drawn shares, which is set in accordance with the rules set in Section 186a(4) of the Commercial Code,

·	the Board of Directors shall inform the Securities Center about the drawing results together with the order to cancel the numbering of not drawn shares,

·	the Board of Directors shall file an application for entry of such new value of Company registered capital in the Commercial Register,

·	after the new value of the Company registered capital has been entered into the Commercial Register, the Board of Directors shall issue an order to the Securities Center to cancel the drawn shares. An extract from the Commercial Register documenting entry of the reduced amount of the Company registered capital must be enclosed with the company’s order.

·	based on the public proposal (Section 213c of the Commercial Code) the procedure is as follows:

·	Shares may be withdrawn from the market on the basis of a public offer for a contract for the purchase of shares or for the withdrawal of shares from the market without a consideration,

·	the provisions of Section 183a through 183c and 183e through 183g of the Commercial Code shall apply to the public offer of the contract on free share withdrawal from the market as appropriate,

·	if this draft is accepted, the Board of Directors shall give an order to the Securities Center to hold up rights to dispose with those shares, regarding which the draft was accepted,

·	the Board of Directors, based on authorization of the General Meeting, shall issue proposal for the record of the new value of the registered capital into the Commercial Register in such an extent, in which the public offer of contract was accepted by the shareholders,

·	after the record of the registered capital value into the Commercial Register the Board of Directors without undue delay shall give an order to the Securities Center to cancel shares, which were bought by the Company based on the public offer of contract.

·	The procedure of Company registered capital reducing is as follows:

·	the General Meeting decides about the registered capital reducing based on the Board of Directors' proposal,

·	also the particulars mentioned in Section 211(1) of the Commercial Code are mentioned in the announcement on holding the General Meeting in addition to the particulars mentioned in Section 184(5) of the Commercial Code,

·	The resolution of the General Meeting to reduce the Company’s registered capital shall be entered in the Commercial Register. The petition for such entry shall be filed by the Board of Directors within 30 days of the General Meeting’s resolution,

·	the resolution on the entry is published by the Board of Directors in the way specified in Article 20 Paragraph 5 of the Articles of Association, without undue delay after its entry into the Commercial Register,

·	the resolution of the General Meeting to reduce the registered capital is exercised by the Board of Directors,

·	The Board of Directors is obligated to notify in writing, within 30 days after the resolution of the General Meeting on reduction of registered capital became effective with respect to third parties, the extent of the reduction of registered capital to all known creditors whose claims against the company arose prior to the day when this resolution became effective with respect to third parties, the aforesaid notification including also an invitation to submit their claims under provision of Section 215(3) of the Commercial Code. The Board of Directors shall secure the publishing of General Meeting’s decision on the registered capital reduction after its entry into the Commercial Register, at least twice with a thirty-day interval by the way mentioned in Article 20 Paragraph 5 of the Articles of Association, and with a notice for creditors that they announce their receivables pursuant to provision of Section 215(3) of the Commercial Code.

·	the Board of Directors shall file an application for entry of such registered capital reduction in the Commercial Register in the deadline mentioned in Section 216 of the Commercial Code.

CHAPTER F O U R
SHAREHOLDERS’ RIGHTS
Article 10
The right to participate in the General Meeting and to vote at it, the method of
voting
·	The shareholders exercise their rights concerning the Company management at the General Meeting.

·	The shareholder is entitled to vote in the General Meeting, either personally or by means of an individual or a legal entity - a proxy - based on the power of attorney with shareholder’s authenticated signature under the simultaneous meeting of the condition of shareholder’s participation in the General Meeting (Article 18 of the Articles of Association).

·	At the General Meeting, shareholders vote by means of voting slips, which are signed by them with simultaneous putting down of their number of shares. The details of voting are mentioned in General Meeting rules of procedure and voting, approved by the General Meeting.

CHAPTER F I V E
COMPANY BODIES
Article 11
Company Bodies
·	The Company bodies are as follows:

·	the General Meeting,

·	the Board of Directors,

·	the Supervisory Board.

·	The General Meeting can establish other Company bodies by changing the Articles of Association. In such case the decision of the General Meeting must contain a specified number of its members, and also specification of their powers and way of their decision making.

Division I
GENERAL MEETING
Article 12
Status of the General Meeting
·	The supreme Company body is the General Meeting. It consists of all its present shareholders.

·	The General Meeting is competent to decide about all matters, which are entrusted to its competence by the law or the Articles of Association.

·	The General Meeting decides by means of its resolutions, which are obligatory for the Company and its bodies.

Article 13
Powers of the General Meeting
·	It is within the powers of the general meeting to:

·	decide to modify the Articles of Association unless it is a change as a consequence of registered capital increase by the Board of Directors pursuant to Section 210 of the Commercial Code or a change as a consequence of other legal facts,

·	decide to increase or reduce the registered capital or to authorize the Board of Directors pursuant to Section 210 of the Commercial Code or to set off a receivable from the company against a receivable relating to the amount of an issue price,

·	decide to reduce the registered capital and to issue bonds pursuant to Section 160 of the Commercial Code,

·	elect and recall Board of Directors' members,

·	elect and recall Supervisory Board’s members and other bodies’ members set by the Articles of Association, with the exception of Supervisory Board members elected pursuant to Section 200 of the Commercial Code,

·	approve the ordinary or extraordinary financial statements and consolidated financial statements and in cases set by law also the interim financial statements, and to decide on the profit distribution, the making good of a loss and determination of directors fee (emoluments),

·	decide on the financial remuneration of Board of Directors' and Supervisory Board's members,

·	decide to apply for the listing of the company's participating securities under another Act, or to revoke their listing,

·	decide to wind up the Company in conjunction with its liquidation, to appoint and recall the liquidator, including determining the amount of the liquidator’s remuneration, approve the plan for distribution of the liquidation remainder,

·	decide on Company merger, transfer of business assets to a sole shareholder or on division, and/or a change of legal form,

·	decide whether to conclude a contract if its object is the transfer of an enterprise or its part, or lease of an enterprise or its part, or whether to conclude such contract with a controlled person,

·	approve a controlling agreement (Section 190b of the Commercial Code), the profit transfer agreement (Section 190a of the Commercial Code) and a silent partnership agreement and their amendments,

·	decide on other matters, which the Commercial Code or the Articles of Associations entrust to the General Meeting's competence.

·	The General Meeting may not reserve the right to decide on a matter which neither the law nor the Articles of Association entrust to its competence.

Article 14
Convening of the General Meeting
·	The General Meeting is held at least once a year, however no later than on June 30 of the current calendar year, and is called by the Board of Directors, possibly its member under conditions of Section 184(3) of the Commercial Code.

·	The Supervisory Board convenes the General Meeting if it is required by Company interests, and proposes necessary measures at the General Meeting. Provisions of Section 184 through 190 of the Commercial Code are valid for General Meeting convocation as appropriate.

·	If the General Meeting is convened by the Supervisory Board, the Board of Directors has to cooperate adequately (especially it is obligated to apply for an abstract from the statutory registry of uncertificated (book-entry) securities - securities issuer register).

·	The day specified for participation at General Meeting is the seventh calendar day before the day of holding the General Meeting (Article 18 Paragraph 1 of the Articles of Association). The Board of Directors is obligated to apply for an abstract from the statutory registry of securities (record from securities issuer register) as valid on the decisive day. In case of a substitute General Meeting, the Board of Directors shall apply for an abstract from securities issuer register (Article 19 Paragraph 8 of the Articles of Association).

·	The Board of Directors is obligated to publish the announcement on holding the General Meeting at least 30 days prior to holding the General Meeting, namely in one nation-wide distributed daily newspapers – Hospodárské noviny. If, in the meantime, this daily stops to be distributed nation-wide or stops to be a daily or stops to be distributed at all, the announcement on holding the General Meeting shall be published in another nation-wide distributed daily. Then, the nearest General Meeting, shall determine another daily distributed nation-wide daily for this purpose.

·	The announcement on holding the General Meeting contains at least the following data:

·	commercial company and seat of the Company,

·	venue, date and hour of the General Meeting,

·	whether it is an ordinary, extraordinary or substitute General Meeting that is being convened,

·	the agenda of the General Meeting,

·	the decisive day for participation in the General Meeting.

·	The main data in the financial statements with specifying the time and place, in which the financial statements can be seen by Company shareholders, is part of the announcement on holding the General Meeting, on which the ordinary, extraordinary and consolidated financial statements shall be approved. If the change in the Articles of Association is on General Meeting’s agenda, the announcement on holding the General Meeting must at least characterize the principle of proposed changes and the proposal of changes in the Articles of Association must be open to public inspection on the Company registered seat within the period set for convening the General Meeting. A shareholder has the right to ask for mailing a copy of the proposal of the Articles of Association on own costs and on own account. The shareholders must be notified about these rights in the announcement on holding the General Meeting.

·	After holding one General Meeting, another General Meeting must not be held earlier than in two business days.

·	The venue, date and time of holding the General Meeting must be determined in such a manner as not in any way to prevent shareholders attending at the General Meeting.

Article 15
Convocation of an Extraordinary General Meeting in case of the Request of
Qualified Shareholders Minority
·	The shareholder or shareholders of the Company, whose registered capital is higher than CZK 100,000,000, who have shares, which total value exceeds 3 per cent of the registered capital, and further the shareholder or shareholders of the Company, whose registered capital is CZK 100,000,000 and lower, who have shares, whose total nominal value exceeds 5 per cent of registered capital, can ask the Board of Directors to call an extraordinary General Meeting to discuss the proposed matters (Section 181(1) of the Commercial Code).

·	The Board of Directors shall convene an Extraordinary General Meeting so that it takes place no later than 40 days from the day, when the Board of Directors received the request for its convocation. The deadline mentioned in Section 184(4) of the Commercial Code and Article 14 Paragraph 5 of the Articles of Association is being shortened to 15 days. The Board of Directors is not entitled to change the proposed agenda. The Board of Directors is entitled to amend the agenda only with consent of persons, who requested to convene the Extraordinary General Meeting pursuant to Section 181(1) of the Commercial Code and paragraph 1 of this Article of the Articles of Association.

·	Revocation or change of date of holding of an extraordinary General Meeting on a later date, convened according to Section 181, is regulated by Section 184(7) of the Commercial Code and Article 17 Paragraph 2 of the Articles of Association.

Article 16
Convocation of an Extraordinary General Meeting in a Special Case
The Board of Directors shall convene a General Meeting, without undue delay, when it ascertains that a settlement of a loss shown in any of the financial statements from the company’s disposable funds would still leave an unsettled amount representing half of the registered capital of the company, or this result may be expected with respect to all circumstances, or if the board establishes that the company has become insolvent, and propose to the general meeting that the company be wound up, or another measure to be adopted, unless a specific legislative regulation provides otherwise.
Article 17
Revocation of the General Meeting or Change of Date of its Holding
·	The General Meeting can be revoked or the date of its holding can be changed for a later date. The revocation of the General Meeting or the change of the date of its holding have to be announced in the way set by law and the Articles of Association concerning convocation of the General Meeting, one week prior to the announced date of its holding at the latest, otherwise the Company is obligated to pay to the shareholders who came according to the original announcement, the expenses reasonably incurred.

·	The extraordinary General Meeting convened pursuant to Section 181 of the Commercial Code (Article 15 of the Articles of Association) can be revoked or the date of its holding can be changed for a later date only if the mentioned shareholders ask for it. When a new date of holding the General Meeting is set, the deadline pursuant to Section 184(4) of the Commercial Code or pursuant to Section 181(2) of the same act must be met.

Article 18
Participation in the General Meeting
·	Every shareholder who is mentioned in abstract from the statutory registry of uncertificated (book-entry) securities as valid on the decisive day (statement from securities issuer register) [Article 5, Article 14 Paragraph 4 and Paragraph 6 letter e) of the Articles of Association], has the right to participate at the General Meeting.

·	The shareholder (an individual is entitled to participate at General Meeting and to perform his rights personally at the General Meeting. The shareholder (legal entity) is entitled to participate at the General Meeting and to perform personally its/his rights by means of an authorized member of its/his statutory body.

·	When performing his rights at the General Meeting the shareholder is entitled to be represented by an individual or a legal entity (proxy). For this purpose the shareholder (principal) shall provide a written power of attorney to the proxy, which has to contain the scope of proxy’s authorization, otherwise it is void. The proxy is obliged to deliver the power of attorney to the persons mentioned in Article 21 Paragraph 2 of the Articles of Association prior to the record into the list of persons present. Members of the Company Board of Directors or Supervisory Board can not be a shareholder’s proxy.

·	The present shareholders are recorded into the list of persons present, which contains Commercial Name or name and registered seat of the legal entity or the name and address of the natural person (individual), who is the shareholder, possibly of his proxy, and the nominal value of shares authorizing the person for voting, possibly the data that the share does not authorize for voting. If the Company refuses to record a specific person into the list of persons present, they mention that fact into the list of persons present including the reason of refusal. The Chairman of the General Meeting and the Minutes clerk elected in compliance with the Articles of Association confirm the correctness of the list of persons present by their signatures.

·	When being recorded into the list of persons present, the shareholders (shareholders’ proxies) prove their identity as follows:

·	an individual (a natural person) with a valid identity card containing his/her birth certificate number, e.g. identity card, passport. Otherwise the natural person must submit an authenticated document on assignment of the birth certificate number, and in case it was not assigned, an authenticated copy of a document, from which the date of his/her birth is obvious. In addition the shareholder’s proxy shall prove his/her identity with a written power of attorney,

·	the authorized member of legal entity’s statutory body acting on behalf of the legal entity, as the natural person, with a valid identity card as the shareholder mentioned under letter a), and with a document - original or an authenticated copy of the extract from the Commercial Register or from other official files or from other authentic legal entity’s existence documentation, from which the way of acting on behalf of legal entity’s statutory body towards other parties follows on behalf of the legal entity (or representing the legal entity towards other parties), not older than six months from the day of holding the General Meeting. In case the document does not contain the legal entity’s identification number, it is necessary to submit an extra authenticated copy of the document concerning its assignment. Shareholder’s proxy authorized by legal entity’s statutory body shall in addition prove his/her identity with a written power of attorney,

·	a representative of city, town or village with authenticated abstract on decision of the council about delegation of the representative or his/her substitutes to the General Meeting [Section 84(2)(g) of the Act on Cities, Towns and Villages, No. 128/2000 Coll.] and valid personal identity card,

·	the foreign natural person (individual) with a valid passport. Shareholder’s proxy shall prove his/her identity with a valid identity card and a written power of attorney, and in case the shareholder’s address is in a country, which has no agreement on legal assistance with the Czech Republic, the proxy shall submit a power of attorney which will be superlegalized (authenticated by higher authority),

·	the proxy of a foreign legal entity with a valid passport, possibly with an identity card as a shareholder mentioned under letter a) if he/she is a proxy with the citizenship of the Czech Republic, and has a written power of attorney, and in case that the shareholder’s address is in a country, which has no agreement on legal assistance with the Czech Republic, the proxy shall submit a power of attorney which will be superlegalized (authenticated by higher authority). The documents that shall prove identity of a foreign legal entity, must be superlegalized, in case the Czech Republic has no agreement on legal assistance with the country where the shareholder has his/her address.

The documents under letters a) through e) have to be submitted by the shareholder or his proxy prior to the record in the list of persons present, to the persons mentioned in Article 21 Paragraph 2 of the Articles of Association.
·	The signature of the represented shareholder (principal) on the written power of attorney must be authenticated.

·	The power of attorney, originals or the authenticated copies of documents mentioned under letters a) through e) are attached to the list of persons present.

·	The documents submitted by a foreign person or the documents and other deeds in foreign language must be translated into the Czech language and provided with the stamp of the translator who is registered in the list of court translators.

·	The Board of Directors and Supervisory Board members participate in the General Meeting. The notary participates in the General Meeting every time when the Commercial Code sets duty to make a notarial deed. Other persons can participate in the General Meeting or its part only with the approval of the Board of Directors. However, the notary and other persons participating in the General Meeting neither vote, nor can require explanations concerning the Company matters, which are on General Meeting’s agenda, nor submit proposals and counter-proposals, nor do they have other shareholders rights. Persons authorized by law with the extent of authorization mentioned in law can also participate in the General Meeting. The General Meeting is not open to public.

·	The expenses connected with shareholder’s participation at the General Meeting are covered by the shareholder unless otherwise set by the Commercial Code.

Article 19
Quorum of the General Meeting and Substitute General Meeting
·	The General Meeting constitutes a quorum if the present shareholders have shares with nominal value exceeding 40 per cent of the Company registered capital.

·	If the General Meeting does not constitute a quorum by two hours from the beginning of starting the General Meeting, set in the announcement on holding the General Meeting, then the member of the Board of Directors, who was authorized by the Board of Directors to chair the General Meeting till the General Meeting chairman is elected, shall dissolve the General Meeting. In this case the Board of Directors shall convene a substitute General Meeting.

·	The substitute General Meeting is called by the Board of Directors by a new announcement in the way mentioned in Section 184(4) of the Commercial Code and Article 14 Paragraph 5 of the Articles of Association, with the specification, that the deadline mentioned is shortened to 15 days.

·	The announcement on holding a substitute General Meeting has to be published no later than 15 days from the day, on which the original General Meeting was convened.

·	The substitute General Meeting must be hold no later than six weeks from the day, for which the original General Meeting was convened.

·	The substitute General Meeting must have an unchanged agenda and constitutes quorum with no regard to Paragraph 1 of this Article of Association.

·	The matters which were not included into the proposed agenda of the original General Meeting, can be decided only with participation and approval of all Company shareholders.

·	A new abstract from the statutory registry of securities (securities issuer register) (Article 14 Paragraph 4 of the Articles of Association) is made by the Company for the substitute General Meeting.

Article 20
General Meeting Decision Making
·	The General Meeting decides with majority of votes of present shareholders unless the Commercial Code requires another majority.

·	The General Meeting decides about the matters pursuant to Section 187 letter a), b), and c) and about winding up of a company with its going into liquidation and the plan of liquidation balance distribution by at least two thirds of votes of present shareholders. If the General Meeting decides to increase or reduce the registered capital, approval of at least two thirds of votes of present shareholders for each type of shares, issued by the Company or issued in form of interim certificates, is also required.

·	For the decision of the General Meeting on the change of sort or form of shares, on change of rights connected with a specific type of shares, on restriction of a registered share transferability and on cancellation of share public transferability is also required the approval of at least three fourths of votes of present shareholders having these shares.

·	The General Meeting decides with at least three quarters of votes of present shareholders about the elimination or restriction of the pre-emptive right for obtaining convertible bonds or bonds with attached pre-emptive rights for subscription of new shares pursuant to Section 204a of the Commercial Code, on the approval of the control agreement (Section 190b of the Commercial Code), on the approval of the profit transfer agreement (Section 190a of the Commercial Code), and their changes and on increase of registered capital with non-monetary contributions. If the Company issued more types of shares, the approval of General Meeting is required plus approval of at least three quarters of votes of present shareholders for each share type.

·	A General Meeting’s resolution on consolidation of shares also requires approval by all shareholders whose shares are to be consolidated.

·	A notarial deed must be elaborated on the decisions pursuant to Sections 2 through 5 of this Article of the Articles of Associations. The notarial deed on the decision on the change of the Articles of Association must contain also an approved text of the change in the Articles of Association.

·	The General Meeting votes first about the proposal of the resolution submitted for decision by the Board of Directors and in case that the proposal is not approved, voting of other shareholders’ counter-proposals is made in such order, in which they were submitted. If some of the proposals are adopted by a necessary majority of votes, there is no voting on other proposals.

·	The matters which were not included into the proposed General Meeting agenda can be decided only under participation and with approval of all Company shareholders.

Article 21
Organization of the General Meeting, its chairing, rules of procedure and voting,
minutes of the General Meeting
·	The organization of the General Meeting is secured by the Board of Directors.

·	Updating of the list of persons present, verification of the right to participate in the General Meeting (Article 18 of the Articles of Association) and authorization to exercise shareholders voting rights (Article 20 Paragraph 8 of the Articles of Association) is secured by persons authorized by the Board of Directors.

·	After completing the record of the shareholders into the list of persons present these persons shall submit the determined number of present shareholders and number of their votes to the member of the Board of Directors who was authorized by the Board of Directors to chair the General Meeting.

·	In case the General Meeting is not able to constitute a quorum pursuant to Article 19 Paragraph 1 of the Articles of Association, it shall be governed by other provisions of Article 19 of the Articles of Association.

·	The General Meeting, after verifying the quorum, is opened by the member of the Board of Directors who was authorized by the Board of Directors. In the beginning, he/she shall introduce the agenda of the General Meeting and shall introduce the present members of the Board of Directors and of Supervisory Board to General Meeting participants.

·	The acting and voting of the General Meeting shall be governed by rules of procedure and voting of the General Meeting, which shall be approved by the General Meeting. The rules of procedure and voting have to be in compliance with generally obligatory legal rules, especially with the Commercial Code, and with the Articles of Association. In the matters not regulated by these rules of procedure and voting the General Meeting is governed by the Articles of Association, decisions, principles and instructions of the General Meeting and by general obligatory legal rules, especially by the Commercial Code. In case that some provision of the rules of procedure and voting is in contradiction with these standards, decisions, principles and instructions, these standards, decisions, principles and instructions apply.

·	The General Meeting elects its chairman, minutes clerk, two persons verifying the record and persons authorized to count votes (General Meeting bodies).

·	Until the persons authorized to vote counting are elected, the votes are counted by the persons authorized by the Board of Directors.

·	Only individuals present at General Meeting, who agree with this candidature, can be proposed to General Meeting bodies.

·	Until the chairman of General Meeting and other bodies are elected, the General Meeting is chaired by the member of the Board of Directors who was authorized by the Board of Directors.

·	The General Meeting is chaired by the chairman of the General Meeting according to General Meeting agenda published in compliance with Article 14 Paragraphs 5 and 6 Letter d) of the Articles of Association. Provision of Article 20 Paragraph 8 of the Articles of Association is unaffected by that.

·	Minutes shall be drawn up from the General Meeting.

·	Proposals and statements, submitted at the General Meeting, are attached to the Minutes, plus the list of present persons in the General Meeting.

·	The Board of Directors ensures the preparation of the Minutes from the General Meeting no later than in 30 days from its finishing. The Minutes are signed by the Minutes Clerk and the Chairman of the General Meeting and two elected persons to verify the minutes (verifiers).

·	The duty to make a notarial deed in cases set by the Commercial Code shall not be affected by the provisions of this Article on the Minutes of the General Meeting.

·	The Minutes on the General Meeting and notarial deeds must not be discarded and must be filed for the whole time of Company existence.

Division II
BOARD OF DIRECTORS
Article 22
Status of the Board of Directors
·	The Board of Directors is the statutory body of the Company, which manages the Company’s activity and acts in its name.

·	The Board of Directors has 11 members.

·	The members thereof are elected and recalled by the General Meeting.

·	The Board of Directors is elected for a five-year period. The term of office starts on the day of electing the Board members by the General Meeting. Any Board member can be reelected.

·	The Board of Directors whose number of members elected by the General Meeting was not lower than one half can appoint substitute members until the next General Meeting.

·	The Board of Directors' members shall elect its Chairman and two Deputy Chairmen out of its members.

·	The membership in the Board of Directors is not substitutable. Mutual substitution is inadmissible.

Article 23
Acting on behalf of the Company
and acting for the Board of Directors by its Members
The Board of Directors acts on behalf of the Company. Either the Chairman separately, or jointly any Deputy Chairman and one Board member, or separately a Board member within the scope of written authorization delegated by the Board may act in the name of the company towards other parties. The Board members who as foreign individuals do not have a permit for residence in the Czech Republic are not entitled to act in the name of the company towards other parties.
Article 24
Signing on behalf of the Company by the Statutory Body Members
·	Signing on behalf of the Company is carried out in such a way that the Board Chairman separately or any Deputy Chairman and a Board member jointly or one member separately authorized in writing by the Board of Directors append their signatures, mentioning their function in the Board of Directors to the Company’s printed, imprinted or written Company’s commercial name.

·	Specimen signatures of all Board members who are entitled to act in the name of the company towards other parties, in which the signatures are authenticated, are filed in the registry of documents at the Commercial Register of the Registration Court. The Company also submits the specimen signatures to the Commercial Court in relation to an entry of changes in the Commercial Register.

Article 25
Board of Directors’ Range of Powers
·	The Board of Directors decides on all matters relating to the Company, provided they have not been entrusted by the Commercial Code or the Articles of Association to the powers of the General Meeting or the Supervisory Board.

·	The Board of Directors in particular:

·	insures business, as well as proper accounting management of the Company,

·	convenes the General Meetings, substitute General Meetings as well as extraordinary General Meetings, and secures for this purpose abstracts from the statutory registry of uncertificated (book-entry) securities as of the decisive day (the Securities Issuers Registry),

·	submits to the General Meeting for approval and decision on proposals that are to be approved and decided on by the General Meeting, in particular:

·	proposals for changes to the Articles of Association, unless it concerns a change caused by an increase in the registered capital by the Board of Directors pursuant to Section 210 of the Commercial Code,

·	ordinary, extraordinary and consolidated, and/or interim financial statements and proposals for distribution of profit or covering a loss and the determination of director's fees (emoluments),

·	proposals for financial remuneration of members of the Board of Directors and the Supervisory Board,

·	proposals for the election and recall of members of the Board of Directors and the Supervisory Board, except for members of the Supervisory Board elected pursuant to Section 200 of the Commercial Code,

·	proposals for changes to the registered capital and for an issue of bonds with attached pre-emptive rights and convertible bonds,

·	proposals for changes to the form, type and kind of shares,

·	submits to the General Meeting to approve the Company's Annual Financial Statements of the previous accounting period, Annual Report on the Company's business activities and assets,

·	decides on an increase in the registered capital pursuant to Article 6, Paragraphs 6 through 8 of the Articles of Association, being authorized by the General Meeting,

·	elects and recalls the Chairman and Deputy Chairmen of the Board of Directors out of the Board members,

·	appoints and recalls the General Director of the Company and key personnel in accordance with Section 27 of the Labor Code, and concludes agreements on conditions of the performance of the office of the General Director,

·	to secure the possible contractual performance of the office of Company Managing Director, chooses a natural person – an entrepreneur with a corresponding trade license and concludes the contract on the terms of performing the office of Company Managing Director

·	selects an accounting auditor,

·	files petitions for excerpts of the statutory securities registry (excerpt from the Securities Issuer Register),

·	without undue delay, ensures the elaboration of the unabridged wording of the Articles of Association, if a change in the Articles of Association occurs based on any legal fact, after any of the Board of Directors’ members learns about such a change,

·	ensures the fulfillment of reporting, information and other similar duties of the Company in accordance with general legal regulations.

·	The Board of Directors carries out the General Meeting's resolutions and decisions.

·	The Board of Directors passes provisions concerning a protection of the Company's trade secrets.

·	The Board of Directors is governed by the principles and instructions adopted by the General Meeting, provided they are in accordance with statutory provisions and these Articles of Association. Their infringement has no influence on the effects of actions by members of the Board of Directors with regard to third parties. Unless otherwise set by the Commercial Code, nobody is authorized to give orders to the Board of Directors concerning the Company business management.

·	The Board of Directors submits to the Supervisory Board in particular:

·	Ordinary, Extraordinary and Consolidated Financial Statements, and/or the Interim Financial Statements and the proposals for the distribution of profit or settlement of loss and the setting of director’s fees, for review,

·	a report on the Company's business activities and assets, for an opinion,

·	The Board of Directors decides on the use of money from the Reserve Fund pursuant to Article 37 Paragraph 7 of the Articles of Association.

Article 26
Convening of the Board of Directors
·	The Board of Directors meets according to need.

·	The meetings of the Board of Directors are called by its Chairman, if being absent, the Board meetings are convened by any of the Deputy Chairmen or another authorized Board member.

·	At its discretion, the Board of Directors may also invite members of other Company’s bodies, employees, shareholders or other persons.

Article 27
Board of Directors’ Decision Taking
·	The Board of Directors has a quorum when an absolute majority of its members is present.

·	Each member of the Board of Directors has one vote on voting at Board meetings.

·	Absolute majority of votes of all Board of Directors’ members is required to pass a resolution concerning any matter discussed at the meeting of the Board of Directors. If the votes are equal, the Chairman’s vote decides.

·	On election and recall of the Board Chairman or the Deputy Chairmen and on deciding on appointing and recall of the Company’s General Director, if he is simultaneously a member of the Board of Directors, the person concerned shall not vote.

Article 28
Board of Directors’ Decision Taking out of the Meeting
·	In case of an emergency, the voting in writing or by means of communication technology out of the Board’s meeting is possible, if agreed by all Board members. The voting persons are considered present. To adopt the decision of the Board of Directors, it is necessary that absolute majority of all present members of the Board of Directors vote for the decision.

·	The decision adopted in this way must be incorporated in the minutes of the next Board of Directors' meeting.

Article 29
Bonuses and Director’s fees of the Board of Directors’ Members
·	The level of bonuses and director’s fees of the Board of Directors’ members shall be decided by the General Meeting [Article 13 Letter g) of the Articles of Association].

·	A profit share of the Board members (director’s fees) may be set forth by the General Meeting on the basis of the profit approved to be distributed [Article 13 Letter f) of the Articles of Association].

·	The Board of Directors decides on the distribution of bonuses and director's fees to its members.

Division III
SUPERVISORY BOARD
Article 30
Status of the Supervisory Board
·	The Supervisory Board is the supervising authority of the Company.

·	A member of the Supervisory Board may not also be a member of the Board of Directors, an agent by proxy or a person authorized according to the record in the Commercial Register to act on behalf of the Company.

·	The Supervisory Board has 6 members.

·	Two-thirds of the specified number of members of the Supervisory Board shall be elected and recalled by the General Meeting, and one third by the Company’s employees.

·	Members of the Supervisory Board are elected for a period of five years; their term of office may not, however, end before new members have been elected. The term of office starts on the date when the members are elected by the General Meeting or employees. Members of the Supervisory Board may be re-elected.

·	The Supervisory Board, whose number of members elected by the General Meeting is not lower than one half, can appoint substitute members till the next General Meeting.

·	The Supervisory Board shall elect its Chairman and Deputy Chairman out of its members.

·	The membership in the Supervisory Board is unsubstitutable. Mutual substitution is not admissible.

Article 31
Powers of the Supervisory Board
·	The Supervisory Board oversees the exercise of the powers of the Board of Directors and the carrying out of the Company’s business activities. For this purpose, the Board of Directors provides the Supervisory Board with required information. The Supervisory Board is not entitled to assign its powers to other Company’s bodies or employees.

·	In particular, the Supervisory Board

·	reviews the ordinary, extraordinary and consolidated, and/or interim financial statements and proposal for the distribution of profit or settlement of loss, and submits its opinion to the General Meeting,

·	expresses its opinion on the report of the Board of Directors on the Company's business activities and assets,

·	reviews observance of the Articles of Association, decisions, resolutions, principles and instructions of the General Meeting and generally binding legal regulations, in particular the Commercial Code,

·	convenes a General Meeting where this is required in the interests of the Company, and proposes the required measures at the General Meeting thereby convened,

·	elects the Chairman and Deputy Chairman of the Supervisory Board among the members of the Supervisory Board.

·	Members of the Supervisory Board are entitled to examine all documents and records relating to the Company’s activities, and examine whether accounting statements are properly kept in accordance with the facts and whether the Company’s business activities are conducted in accordance with legal regulations, these Articles of Association and instructions of the General Meeting.

·	The Supervisory Board shall appoint one of its members to represent the Company in proceedings before courts and other authorities against a member of the Board of Directors.

·	The Supervisory Board is governed by principles and instructions approved by the General Meeting provided they comply with legal regulations and these Articles of Association. Their violation does not have an impact on effect of negotiations of the members of the Supervisory Board towards third parties.

Article 32
Convening of the Supervisory Board’s Meetings
·	The Supervisory Board meets according to need.

·	The meetings of the Supervisory Board are called by its Chairman, if being absent, the Board meetings are convened by the Deputy Chairman or another authorized Board member.

·	At its discretion, the Supervisory Board may also invite members of other Company’s bodies, employees, shareholders or other persons.

Article 33
Supervisory Board’s Decision Taking
·	The Supervisory Board has a quorum when an absolute majority of its members is present.

·	Each member of the Supervisory Board has one vote on voting at Board meetings.

·	Absolute majority of votes of all members of the Supervisory Board is required to pass a resolution. If the votes are equal, the Chairman’s vote decides. The opinions of the minority of members are also included in the minutes, provided they so request and always a different opinion of Supervisory Board’s members elected by employees is recorded.

·	On election and recall of the Board Chairman or Deputy Chairman these persons shall not vote.

Article 34
Supervisory Board’s Decision Taking out of the Meeting
·	In necessary cases that can not be put off, the voting in writing or by means of communication technology out of the Board’s meeting is possible, if agreed by all Board members. The voting persons are considered present. To adopt the decision of the Supervisory Board, it is necessary that absolute majority of Supervisory Board’s members votes for the decision.

·	Such an adopted decision must be incorporated in the minutes of the next Supervisory Board meeting.

Article 35
Bonuses and Director’s fees of the Supervisory Board’s Members
·	The level of bonuses and director’s fees of the Supervisory Board’s members shall be decided by the General Meeting [Article 13 Letter g) of the Articles of Association].

·	A profit share of the Supervisory Board members (director’s fees) may be set forth by the General Meeting on the basis of the profit approved to be distributed [Article 13 Letter f) of the Articles of Association].

·	The Board of Directors decides on the distribution of bonuses and director's fees.

CHAPTER SIX
COMPANY ECONOMY
Article 36
Profit Distribution and Settlement of a Loss of the Company
·	The General Meeting decides on the distribution of the Company’s profit on the basis of a proposal by the Board of Directors, following a review of such proposal by the Supervisory Board.

·	Following tax liabilities fulfillment pursuant to statutory provisions, after the allocation to the reserve fund and other funds, as the case may be, and after distribution for other purposes approved by the General Meeting, profit achieved by the Company in the accounting period is distributed, on the basis of a decision by the General Meeting, on the payment of dividends to individual shareholders and, in accordance with provisions of Article 29 para. 2 and Article 35 para 2 of the Articles of Association on the payment of director’s fees for members of the Company’s Board of Directors and Supervisory Board. This does not exclude the possibility of the General Meeting’s deciding that a part of profit not specially committed is used to increase the Company’s registered capital, or that a part of profit is not distributed.

·	The proposal for the profit distribution or settlement of loss is governed by Section 178(6) of the Commercial Code.

·	Possible losses arisen in the Company's economy shall be compensated in particular from the Company's Reserve Fund.

·	The Company is not entitled to distribute profit among shareholders in cases listed in Section 178(2) of the Commercial Code.

Article 37
Reserve Fund
1.	The Company shall create a reserve fund in the period and amount determined by the Articles of Association and the Commercial Code.

2.	On the Company's formation, the Founder made an investment contribution to the Company's Reserve Fund in the amount of CZK 95,619,000 (in words: ninety-five million six hundred nineteen thousand Czechoslovak crowns).

3.	When increasing the registered capital, the Ordinary General Meeting held on October 15, 1992, set the level of the Reserve Fund to 10 per cent of the total registered capital modified by its increase, i.e. to the amount of CZK 100,631,000 (in words: one hundred million six hundred thirty-one thousand Czechoslovak crowns).

4.	The Company shall create the Reserve Fund from a net profit shown in the Ordinary Financial Statements for the year in which it first makes a net profit. It shall transfer to such fund at least 20 per cent of the net profit, but no more than 10 per cent of the amount of its Registered Capital. This fund shall be augmented annually by no less than 5 per cent of the net profit, until the amount of 20 per cent of the Registered Capital is reached. This shall not apply if the Reserve Fund is created from amounts paid in excess of the issue price of shares.

5.	The Reserve Fund created in this manner may only be used by the Company to settle a loss.

6.	A proportionate part of the Company’s net profit (“a profit share”) may only be determined after appropriate financial means have been allocated to top up the Reserve Fund in accordance with the Commercial Code and these Articles of Association.

7.	Unless the Articles of Association or the Commercial Code provide otherwise, it is the Board of Directors that shall decide on use of the Reserve Fund (Article 25 para. 7 of these Articles of Association). Each use of the Reserve Fund has to be announced to the Supervisory Board and is subject to an additional approval of the General Meeting.

CHAPTER S E V E N
CONCLUDING PROVISIONS
Article 38
Publishing, Announcements and Information
·	The duty to publish data stipulated by the Commercial Code shall be considered as performed upon publishing the data in the Commercial Bulletin.

·	Documents addressed to the members of the Company's bodies are delivered to the addresses notified by them to the Company.

·	The Company shall send documents intended for shareholders to their addresses recorded in statutory registry of uncertificated (book-entry) securities kept in conformity with another Act by the Securities Center (the Securities Issuer Register).

·	Documents addressed to the other persons or state agencies and other bodies shall be delivered to their addresses notified or well-known to the Company.

Article 39
Procedure for Amending and Changing the Articles of Association
·	Proposals for an amendment or another change of the Articles of Association (“changes to the Articles of Association”) may be made by the Board of Directors, the Supervisory Board and a shareholder provided the agenda of the General Meeting contains changes to the Articles of Association.

·	Proposals for changes to the Articles of Association are usually processed by the Board of Directors.

·	The General Meeting decides on modification to the Articles of Association, except when such modification (change) is the result of an increase in the Registered Capital by the Board of Directors under Section 210 of the Commercial Code or when such modification is made on the basis of other legal facts.

·	At least two-third majority of votes of the shareholders present is needed to pass a decision concerning changes to the Articles of Association. A notarial deed must be drawn up on the resolution concerning changes to the Articles of Association.

·	If the General Meeting decides about a change to the Articles of Association, the Board of Directors shall, without undue delay, ensure the compilation of the unabridged wording of the Company’s Articles of Association. The unabridged wording of the Company’s Articles of Association shall become a part of the registry of documents kept by the registration court. The Articles of Association contents must be a part of the unabridged wording of the Articles of Association.

Article 40
Effect of the Changes of the Articles of Association
·	Should the General Meeting decide on an increase or reduction of the registered capital, splitting of shares or consolidation of shares into one share, change of share form or kind, or limitation of transferability of registered shares or a change thereof, the changes to the Articles of Association come into force on the day of their record in the Commercial Register.

·	Other changes into the Articles of Association decided by the General Meeting come into effect at the moment when the General Meeting made a decision about them, provided that neither a decision by the General Meeting on a change to the Articles of Association nor the law requires that they come into effect at a later time.

·	If the change in the Articles of Association happens based on any legal fact, the provision of Article 25 para. 2 letter k) of the Articles of Association shall apply. The change in the Articles of Association is effective by this other legal fact.

* * *
The Articles of Association
of United Energy, a.s.,with its seat in Most - Komorany, Teplarenska 2, postal code 434 03,
as of April 28, 1992,
were changed and amended
by decisions of the General Meeting and the Board of Directors based on other legal
facts (Section 173(4) of the Commercial Code),
by the execution of the valid unabridged Articles of Association,
as follows:
·	The Ordinary General Meeting held on October 15, 1992 reached a decision on changes to the Articles of Association in Articles 4, 5, 6, 14 and 36. (Notarial deed NZ 581/92, N 626/92 as of October 15, 1992, Attestation of the General Meeting deliberations),

·	The Ordinary General Meeting, held on January 21, 1993, reached a decision on changes and amendments to the Articles of Association in Articles 9, 10, 11, 13, 14, 15, 16, 18, 20, 21, 22, 23, 24, 26, 28, 29, 30, 33, 34, 37, 45, 47 and 49. (Notarial deed NZ 11/93, N 11/93 as of January 21, 1992, Attestation of the General Meeting deliberations),

·	The Ordinary General Meeting, held on July 28, 1993, reached a decision on changes and amendments to the Articles of Association in Articles 5, 6, 7, 9, 10, 11, 13, 14, 15, 16, 20, 21, 23, 27, 28, 33, 36, 37, 44 and 45. (Notarial deed NZ 138/93, N 140/93 as of July 28, 1993, Attestation of the General Meeting deliberations),

·	The Ordinary General Meeting held on May 27, 1994, reached a decision on changes and amendments to the Articles of Association in Articles 4, 13, 14, 36 and 39. (Notarial deed NZ 109/94, N 109/94 as of May 27, 1994, Attestation of the General Meeting deliberations),

·	The Extraordinary General Meeting held on December 20, 1995, reached a decision on changes and amendments to the Articles of Association in Articles 15 and 23. (Notarial deed NZ 10/96, N 10/96 as of January 15, 1996, Attestation of the General Meeting deliberations),

·	The Ordinary General Meeting held on May 31, 1996, reached a decision on changes and amendments to the Articles of Association in Articles 4, 9, 10, 13, 15, 18, 24 and 26. (Notarial deed NZ 183/96, N 184/96 as of June 11, 1996, Attestation of the General Meeting deliberations),

·	The Ordinary General Meeting held on May 28, 1997, reached a decision on changes and amendments to the Articles of Association in Articles 1 through 4, Articles 5 through 47 are substituted by Articles 5 through 64. (Notarial deed NZ 201/97, N 201/97 as of May 28, 1997, Attestation of the General Meeting deliberations).

·	The Extraordinary General Meeting held on February 20, 1998, reached a decision on changes and amendments to the Articles of Association in Article 37 paragraphs 1 and 3 letter d) and in Article 46 paragraphs 1 and 3 letter d). (Notarial deed NZ 49/98, N 51/98 as of February 20, 1998, Attestation of the General Meeting deliberations).

·	The Ordinary General Meeting held on June 24, 1998, reached a decision on changes to the Articles of Association in Article 28 para. 3. (Notarial deed NZ 254/98, N 259/98 as of June 24, 1998, Attestation of the General Meeting deliberations).

·	The Extraordinary General Meeting held on September 28, 1998 reached a decision on changes and amendments of the Articles of Association in Articles 1, 2, 4, 5, 6, 13, 16, 20, 28 through 35, 39, 44, 58 and 59. (Notarial deed NZ 357/98, N 361/98 as of September 28, 1998, Attestation of the General Meeting deliberations).

·	The Ordinary General Meeting, hold on June 29, 2000, reached a decision on changes and amendments of the Articles of Association in Article 2 para 1 and 3, Article 4 para 1 and 2 letter b), Article 6 para 9, Article 26 para 3 and 4, Article 28 para 3, Article 31 para 2 letter l), Article 35 para 4 and in Article 39 para 4. (The notarial deed N 72/2000, NZ 68/2000 dated June 29, 2000, Attestation of the Ordinary General Meeting deliberations).

·	Change of the Articles of Association based on other legal facts (Section 173(4) of the Commercial Code) – changes executed in all Articles of Association except for Articles 1, 3, 7, 12, 15, 18, 23, 29, 32, 33, 35, 36, 38, 41, 43, 44, 45, 47, 48, 49, 51, 52, 54, 55, 58, 59, 60, 63 and 64, with the elaboration of a valid unabridged wording of the Articles of Association by the Board of Directors on April 26, 2001,

Most - Komorany, June 28, 2001
On behalf of the Board of Directors

Ing. Luboš Jarolímek
Chairman of the Board of Directors
United Energy, a.s.
with its seat at Most - Komorany, Teplarenska 2, postal code 434 03
ARTICLES OF ASSOCIATION
of
United Energy, a.s.
with its registered office in Most - Komorany, Teplarenska 2, postal code 434 03
as of April 28, 1992

(the full wording as follows from later changes and amendments,
as of June 28, 2001)

OVERVIEW OF THE ARTICLES OF ASSOCIATION
(CONTENTS)
CHAPTER  O N E.......................................................................................2
GENERAL PROVISIONS................................................................................2
      Article 1......................................................................................2
Commercial Name and the seat of the Company..........................................................2
      Article 2......................................................................................2
Company Scope of Business Activity...................................................................2
CHAPTER  T W O.......................................................................................4
THE COMPANY REGISTERED CAPITAL AND SHARES.........................................................4
      Article 3......................................................................................4
The Company registered capital and the extent to which it has been paid up and
the method of paying up the issue price of shares including the consequences of
breaching the duty to pay up the subscribed shares on time...........................................4
      Article 4......................................................................................4
Shares...............................................................................................4
      Article 5......................................................................................5
List of Company shareholders.........................................................................5
CHAPTER  T H R E E...................................................................................5
INCREASE AND REDUCTION OF THE COMPANY REGISTERED CAPITAL..........................................5
(CHANGES IN THE COMPANY REGISTERED CAPITAL).......................................................5
      Article 6......................................................................................5
Increasing the Company Registered Capital............................................................5
      Article 7......................................................................................7
Rules of the Procedure of the Company Registered Capital Increase....................................7
      Article 8......................................................................................7
Reduction of the Company Registered Capital..........................................................7
      Article 9......................................................................................8
Rules of the Procedure of the Company Registered Capital Reducing....................................8
CHAPTER  F O U R....................................................................................10
SHAREHOLDERS' RIGHTS.............................................................................10
      Article 10....................................................................................10
The right to participate in the General Meeting and to vote at it, the method of  voting............10
CHAPTER  F I V E....................................................................................11
COMPANY BODIES...................................................................................11
      Article 11....................................................................................11
Company Bodies......................................................................................11
   Division  I......................................................................................11
GENERAL MEETING..................................................................................11
      Article 12....................................................................................11
Status of the General Meeting.......................................................................11
      Article 13....................................................................................12
Powers of the General Meeting.......................................................................12
      Article 14....................................................................................13
Convening of the General Meeting....................................................................13
      Article 15....................................................................................14
Convocation of an Extraordinary General Meeting in case of the Request of
Qualified Shareholders Minority.....................................................................14
      Article 16....................................................................................15
Convocation of an Extraordinary General Meeting in a Special Case...................................15
      Article 17....................................................................................15
Revocation of the General Meeting or Change of Date of its Holding..................................15
      Article 18....................................................................................15
Participation in the General Meeting................................................................15
      Article 19....................................................................................18
Quorum of the General Meeting and Substitute General Meeting........................................18
      Article 20....................................................................................18
General Meeting Decision Making.....................................................................18
      Article 21....................................................................................19
Organization of the General Meeting, its chairing, rules of procedure and voting,
minutes of the General Meeting......................................................................19
   Division II......................................................................................21
BOARD OF DIRECTORS...............................................................................21
      Article 22....................................................................................21
Status of the Board of Directors....................................................................21
      Article 23....................................................................................22
Acting on behalf of the Company.....................................................................22
      Article 24....................................................................................22
Signing on behalf of the Company by the Statutory Body Members......................................22
      Article 25....................................................................................22
Board of Directors' Range of Powers.................................................................22
      Article 26....................................................................................24
Convening of the Board of Directors.................................................................24
      Article 27....................................................................................25
Board of Directors' Decision Taking.................................................................25
      Article 28....................................................................................25
Board of Directors' Decision Taking out of the Meeting..............................................25
      Article 29....................................................................................25
Bonuses and Director's fees of the Board of Directors' Members......................................25
   Division III.....................................................................................26
SUPERVISORY BOARD................................................................................26
      Article 30....................................................................................26
Status of the Supervisory Board.....................................................................26
      Article 31....................................................................................27
Powers of the Supervisory Board.....................................................................27
      Article 32....................................................................................28
Convening of the Supervisory Board's Meetings.......................................................28
      Article 33....................................................................................28
Supervisory Board's Decision Taking.................................................................28
      Article 34....................................................................................28
Supervisory Board's Decision Taking out of the Meeting..............................................28
      Article 35....................................................................................29
Bonuses and Director's fees of the Supervisory Board's Members......................................29
CHAPTER SIX.........................................................................................29
COMPANY ECONOMY..................................................................................29
      Article 36....................................................................................29
Profit Distribution and Settlement of a Loss of the Company.........................................29
      Article 37....................................................................................30
Reserve Fund........................................................................................30
CHAPTER S E V E N...................................................................................31
CONCLUDING PROVISIONS............................................................................31
      Article 38....................................................................................31
Publishing, Announcements and Information...........................................................31
      Article 39....................................................................................31
Procedure for Amending and Changing the Articles of Association.....................................31
      Article 40....................................................................................32
Effect of the Changes of the Articles of Association................................................32

CORPORATE ACCESS NUMBER: 209540673
Alberta
BUSINESS CORPORATIONS ACT
CERTIFICATE
OF
AMALGAMATION
PLAYER RESOURCES LTD.
IS THE RESULT OF AN AMALGAMATION FILED ON 2001/09/30,
BUSINESS CORPORATIONS ACT
(Section 179)
ALBERTA CONSUMER AND
CORPORATE AFFAIRS                                          ARTICLES OF AMALGAMATION
-------------------------------------------------------------------------------------------------------------------------

1.   NAME Of AMALGAMATED CORPORATION.                      2.     CORPORATE ACCESS NO.
                                                                  209540673
     PLAYER RESOURCES LTD.
-------------------------------------------------------------------------------------------------------------------------

2.       THE CLASSES AND ANY MAXIMUM NUMBER OF SHARES THAT THE CORPORATION IS AUTHORIED TO ISSUE.

         75,000,000 Common Shares without par value

4.       RESTRICTIONS IF ANY ON SHARE TRANSFERS

         None

5.       NUMBER (OR MINIMUM OR MAXIMUM NUMBER) OF DIRECTORS.

         MINIMUM - three (3)        Maximum - twelve (12)

6.       RESTRICTIONS IF ANY ON BUSINESS THE CORPORATION MAY CARRY ON.

         No restrictions.

7.       OTHER PROVISIONS IF ANY

         See Schedule "A" attached hereto.

8.       NAME OF AMALGAMATING CORPORATIONS.           CORPORATE ACCESS & NO.

         Player Petroleum Corporation                  207813478
         806764 Alberta Ltd.                           208067645
         845943 Alberta Ltd.                           208459438
         Player Resources Ltd.
         Vista Pipelines Inc.
---------------------------------------------------------------------------------------------------------------------------------------

9.       DATE                    SIGNATURE                                TITLE

         9/28/01                 J. B. McCashin                           PRESIDENT

---------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE”A”
      Other Rules or Provisions
·	The directors may, between annual general meetings, appoint one or more additional directors of the Corporation to serve until the next annual general meeting, but the number of additional directors shall not at any time exceed 1/3 of the number of directors who held office at the expiration of the last annual meeting of the Corporation.

·	Meetings of the shareholders may be held at any place within Canada.

BY-LAW NUMBER 1
A BY-LAW RELATING GENERALLY
TO THE TRANSACTION OF THE
BUSINESS AND AFFAIRS OF
PLAYER PETROLEUM CORPORATION

CONTENTS

                                   SECTION 1.
                       DEFINITIONS AND INTERPRETATION

(1)      Definitions..................................................  1
(2)      Interpretation...............................................  2
(3)      Headings.....................................................  2
(4)      By-laws Subject to the ABCA..................................  2

SECTION 2.
                         BUSINESS OF THE CORPORATION

(1)      Execution of Documents.......................................  3
(2)      Cheques, Drafts and Notes....................................  3
(3)      Corporate Seal...............................................  3
(4)      Banking Arrangements.........................................  3
(5)      Voting Rights in Other Bodies Corporate......................  3
(6)      Withholding Information from Shareholders....................  3
(7)      Divisions....................................................  4

SECTION 3.
                                  BORROWING

(1)      Borrowing Power..............................................  4

SECTION 4.
                                  DIRECTORS

(1)      Management of Business.......................................  4
(2)      Qualification................................................  5
(3)      Number of Directors..........................................  5
(4)      Increase Number..............................................  5
(5)      Decrease Number..............................................  5
(6)      Election and Term............................................  6
(7)      Removal of Directors.........................................  6
(8)      Consent......................................................  6
(9)      Ceasing to Hold Office.......................................  6
(10)     Filing Vacancies.............................................  7
(11)     Delegation to a Managing Director or Committee...............  7
(12)     Remuneration and Expenses....................................  7
(13)     Annual Financial Statements..................................  8

SECTION 5.
                            MEETINGS OF DIRECTORS

(1)      Calling Meetings.............................................  8
(2)      Notice.......................................................  8
(3)      Notice of Adjourned Meeting..................................  9
(4)      Meetings Without Notice......................................  9
(5)      Waiver of Notice.............................................  9
(6)      Quorum.......................................................  9
(7)      Regular Meetings.............................................  9
(8)      Chairperson of Meetings...................................... 10
(9)      Decision of Questions........................................ 10
(10)     Meeting by Telephone......................................... 10
(11)     Resolution in Lieu of Meeting................................ 10

SECTION 6.
                    OFFICERS AND APPOINTEES OF THE BOARD

(1)      Appointment of Officers...................................... 10
(2)      Term of Office............................................... 11
(3)      Duties of Officers........................................... 11
(4)      Remuneration................................................. 11
(5)      Chairperson of the Board..................................... 11
(6)      Managing Director............................................ 11
(7)      President.................................................... 11
(8)      Vice-President............................................... 11
(9)      Secretary.................................................... 12
(10)     Treasurer.................................................... 12
(11)     Agents and Attorneys......................................... 12

SECTION 7
                            CONFLICT OF INTEREST

(1)      Disclosure of Interest....................................... 12
(2)      Approval and Voting.......................................... 12
(3)      Effect of Conflict of Interest............................... 13

SECTION 8.
                        LIABILITY AND INDEMNIFICATION

(1)      Limitation of Liability...................................... 13
(2)      Indemnity.................................................... 14
(3)      Insurance.................................................... 15

SECTION 9.
                                 SECURITIES

(1)      Shares....................................................... 15
(2)      Options and other rights to Acquire Securities............... 15
(3)      Commissions.................................................. 15
(4)      Securities Register.......................................... 15
(5)      Transfer Agents and Registrars............................... 16
(6)      Dealings with Registered Holders............................. 16
(7)      Transfers of Securities...................................... 16
(8)      Registration of Transfers.................................... 16
(9)      Lien......................................................... 16
(10)     Security Certificates........................................ 17
(11)     Entitlement to a Security Certificate........................ 17
(12)     Securities Held Jointly...................................... 17
(13)     Replacement of Security Certificates......................... 17
(14)     Fractional Shares............................................ 17

SECTION 10
                          MEETINGS OF SHAREHOLDERS

(1)      Annual Meeting of Shareholders............................... 18
(2)      Special  Meetings  of   Shareholders......................... 18
(3)      Special Business............................................. 18
(4)      Place and Time of Meetings................................... 18
(5)      Notice of Meetings........................................... 18
(6)      Notice of Adjourned Meetings................................. 19
(7)      Waiver of Notice............................................. 19
(9)      Shareholder List............................................. 19
(9)      Persons Entitled to Vote..................................... 20
(10)     Chairperson of Meetings...................................... 20
(11)     Scrutineer................................................... 20
(12)     Procedure at Meetings........................................ 21
(13)     Persons Entitled to be Present............................... 21
(14)     Quorum....................................................... 21
(15)     Loss of Quorum............................................... 21
(16)     Proxy Holders and Representatives............................ 21
(17)     Time for Deposit of Proxies.................................. 22
(18)     Revocation of Proxies........................................ 22
(19)     Joint Shareholders........................................... 22
(20)     Decision on Questions........................................ 23
(21)     Voting by Show of Hands...................................... 23
(22)     Voting by Ballot............................................. 23
(23)     Number of Votes.............................................. 23
(24)     Meeting by Telephone......................................... 23
(25)     Resolution in Lieu of Meeting................................ 23

SECTION 11.
                                   NOTICES

(1)      Method of Notice............................................. 24
(2)      Notice to Joint Shareholders................................. 24
(3)      Notice to Successors......................................... 24
(4)      Non-Receipt of Notices....................................... 24
(5)      Failure to Give Notice....................................... 24
(6)      Execution of Notices......................................... 25
SECTION 1.
DEFINITIONS AND INTERPRETATION
·	Definitions

In the By-laws, unless the context otherwise requires:

·	“ABCA” means the Business Corporations Act (Alberta), as amended;

·	“appoint” includes elect and vise versa;

·	“Articles” includes the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution and articles of revival of the Corporation, and any amendment to any of them;

·	“Board” means the board of directors of the Corporation;

·	“By-laws” means this by-law and all other by-laws of the Corporation from time to time in force;

·	“Corporation” means Player Petroleum Corporation;

·	“Director” means an individual who is elected or appointed as a director of the Corporation;

·	“Indemnified Party” has the meaning set out in section 8 for purposes of that section;

·	“Officer” means an officer of the Corporation appointed by the Board;

·	“Record Date” means, for the purpose of determining Shareholders entitled to receive notice of a meeting of Shareholders:

·	the date fixed in advance by the Board for that determination which precedes the date on which the meeting is to be held by not more than 50 days and not less than 21 days,

·	if no date is fixed by the Board, at the close of business on the last business day which precedes the day on which the notice is sent, or

·	if no notice is sent, the day on which the meeting is held;

·	“Recorded Address” means:

·	in the case of a Shareholder, the Shareholder's latest address as shown in the Corporation's records or those of its transfer agent,

·	in the case of joint Shareholders, the latest address as shown in the Corporation’s records or those of its transfer agent in respect of those joint holders, or the first address appearing if there is more than one address,

·	in the case of a Director, the Directors; latest address as shown in the Corporation's records or in the last notice of directors filed with the Registrar, and

·	in the case of an Officer or auditor of the Corporation, that person's latest address as shown in the Corporation's records;

·	“Registrar” means the Registrar of Corporations or a Deputy Registrar of Corporations appointed under the ABCA;

·	“Regulations” means the Regulations, as amended, in force from time to time under the ABCA; and

·	“Shareholder” means a shareholder of the Corporation.

·	Interpretation
In the By-laws, except if defined in this section or the context does not permit,
·	words and expressions defined or used in the ABCA have the meaning or use given to them in the ABCA;

·	words importing the singular include the plural and vice versa,

·	words importing gender include masculine, feminine and neuter genders; and

·	words importing persons include bodies corporate.

·	Headings
The headings used in the By-laws are inserted for con lenience of reference only. The headings are not to be considered or taken into account in construing the terms of the By-laws nor are they to be deemed in any way to clarify, modify or explain the effect of any term of the By-laws.
·	By-laws Subject to the ABCA
The By-laws are subject to the ABCA and the Regulations, to any unanimous share holder agreement and to the Articles, in that order.
SECTION 2.
BUSINESS OF THE CORPORATION
·	Execution of Documents
Documents may be executed on behalf of the Corporation in the manner and by the persons the Board may designate by resolution.
·	Cheques, Drafts and Notes
cheques, drafts or orders for the payment of money, notes, acceptances and bills of exchange must be signed in the manner and by the persons the Board may designate by resolution.
·	Corporate Seal
The Board may, by resolution, adopt a corporate seal containing the name of the Corporation as the corporate seal. A document issued by or executed on behalf of the Corporation is not invalid only because the corporate seal is not affixed to that document. A document requiring authentication by the Corporation does not need to be under seal.
·	Banking Arrangements
The Board may open any bank accounts the Corporation may require at a financial institution designated by resolution of the Board. The Board may adopt, authorize, execute or deposit any document furnished or required by the financial institution and may do any other thing as may be necessarily incidental to the baking and financial arrangements of the Corporation.
·	Voting Rights in Other Bodies Corporate
The persons designated by the Board to execute documents on behalf of the Corporation may execute and deliver instruments of proxy and arrange for the issue of voting certificates or other evidence of the right to exercise voting rights attached to any securities held by the Corporation in another body corporate. The instruments, certificates or other evidence shall be in favour of the person that is designated by the persons executing the instruments of proxy or arranging for the issue of voting certificates or other evidence of the right to exercise voting rights. In addition, the Board may direct the manner in which and the person by whom any particular voting right or class of voting rights may be exercised.
·	Withholding Information from Shareholders
No Shareholder is entitled to obtain any information respecting any detail or conduct of the Corporation’s business which, in the opinion of the Board, would not be in the best interests of the Shareholders or the Corporation to communicate to the public.
The Board may determine whether and under what conditions the accounts, records and documents of the Corporation are open to inspection by the Shareholders. No Shareholder has a right to inspect any account, record or document of the Corporation except as conferred by the ABCA or authorized by resolution of the Board or by resolution passed at a meeting of Shareholders.
·	Divisions
The Board may cause any part of the business and operations of the Corporation to be segregated or consolidated into one or more divisions upon the basis the Board considers appropriate. Any division may be designated by the name the Board determines and may transact business under that name. The name of the Corporation must be sent out in legible characters in and on all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of any division of the Corporation.
SECTION 3.
BORROWING
·	Borrowing Power
Without limiting the borrowing power of the Corporation provided by the ABCA, the Board may, without authorization of the Shareholders,
·	borrow money on the credit of the Corporation;

·	issue, reissue, sell or pledge debt obligations of the Corporation;

·	subject to section 42 of the ABCA, give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and

·	mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Corporation, owned or subsequently acquired, to secure any obligation of the Corporation.
The Directors may, by resolution, delegate to a Director, a committee of Directors or an Officer all or any of the powers conferred on them by this section.
SECTION 4.
DIRECTORS
·	Management of Business
The Board shall manage the business and affairs of the Corporation. Every Director must comply with the ABCA, the Regulations, the Articles and the By-laws.
·	Qualification
A person is disqualified for election as a Director if that person:
·	is less than 18 years of age:

·	is

·	a dependent adult as defined in the Dependent Adults Act (Albena) or the subject of a certificate of incapacity under that Act,

·	a formal patient as defined in the Mental Health Act (Alberta),

·	the subject of an order under the Mentally Incapacitated Persons Act (Alberta) appointing a committee of his or her person, estate or both, or

·	a person who has been found to be of unsound mind by a court elsewhere than in Alberta;

·	is not an individual; or

·	has the status of bankrupt.
A Director is not required to hold shares issued by the Corporation.
·	Number of Directors
The Board is to consist of that number of Directors permitted by the Articles. In the event the Articles permit a minimum and maximum number of Directors, the Board is to consist of the number of Directors the Shareholders determine by ordinary resolution. The number of Directors at any one time may not be less than the minimum or more than the maximum number permitted by the Articles.
·	Increase Number
The Shareholders may amend the Articles to increase the number, or the minimum or maximum number, of Directors. Upon the adoption of an amendment increasing the number or minimum number of Directors, the Shareholders may, at the meeting at which they adopt the amendment, elect the additional number of Directors authorized by the amendment. Upon the issue of a certificate of amendment, the Articles are deemed to be amended as of the date the Shareholders adopted the amendment.
·	Decrease Number
The Shareholders may amend the Articles to decrease the number, or the minimum or maximum number, of Directors. No decrease shortens the term of an incumbent Director.
·	Election and Term
Each Director named in the notice of directors filed at the time of incorporation holds office from the issue of the, certificate of incorporation until the first meeting of Shareholders. The Shareholders are to elect Directors by ordinary resolution at the first meeting of Shareholders and at each succeeding annual meeting at which an election of Directors is required. The elected Directors are to hold office for a term expiring not later than the close of the next annual meeting of Shareholders following the election. A Director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of Shareholders following the Director’s election. If Directors are not elected at a meeting of Shareholders, the incumbent Directors continue in office until their respective successors are elected.
·	Removal of Directors
The Shareholders may by ordinary resolution passed at a special meeting of Shareholders remove a Director from office. Any vacancy created by the removal of a Director may be filled at the meeting at which the Director was removed, failing which the vacancy may be filled by a quorum of Directors.
·	Consent
No election or appointment of an individual as a Director is effective unless:
·	individual was present at the meeting when elected or appointed and did not refuse to act as Director; or

·	if the individual was not present at the meeting when elected or appointed as a Director, the individual

·	consented in writing to act as a Director before the individual's election or appointment or within 10 days after it, or

·	has acted as a Director pursuant to the election or appointment.

·	Ceasing to Hold Office
A Director ceases to hold office when:
·	the Director dies or resigns;

·	the Director is removed from office by the Shareholders; or

·	the Director ceases to be qualified for election as a Director under subsection (2).
A Director's resignation is effective at the time a written resignation is sent to the Corporation, or at the time specified in the resignation, whichever is later.
·	Filing Vacancies
A quorum of Directors may fill a vacancy in the Board, except a vacancy resulting from an increase in the number or minimum number of Directors or from a failure to elect the number or minimum number of Directors required by the Articles. If there is not a quorum of Directors, or if there has been a failure to elect the number or minimum number of Directors required by the Articles, the Directors then in office must immediately call a special meeting of Shareholders to fill the vacancy. If the Directors fail to call a meeting, or if them are no Directors then in office, the meeting may be called by any Shareholder.
·	Delegation to a Managing Director or Committee
The Directors may appoint from their number a managing Director or a committee of Directors. At least half of the members of a committee of Directors must be resident Canadians. A Managing Director must be a resident Canadian. The Directors may delegate to a Managing Director or a committee of Directors any of the powers of the Directors. However, no Managing Director and no committee of Directors has authority to:
·	submit to the Shareholders any question or matter requiring the approval of the Shareholders;

·	fill a vacancy among the Directors or in the office of auditor;

·	issue securities, except in the manner and on the terms authorized by the Directors;

·	declare dividends;

·	purchase, redeem or otherwise acquire shares issued by the Corporation, except in the manner and on the terms authorized by the Directors;

·	pay a commission in connection with the sale of shares of the Corporation;

·	approve a management proxy circular;

·	approve any financial statements; or

·	adopt, amend or repeal By-laws.

·	Renumeration and Expenses
The Directors are entitled to receive remuneration for their services in the amount the Board determines. Subject to the Board’s approval, the Directors are also entitled to be reimbursed for travelling and other expenses incurred by them in attending meetings of the Board or any committee of Directors or in the performance of their duties as Directors.
Nothing contained in the By-laws precludes a Director from serving the Corporation in another capacity and receiving remuneration for acting in that other capacity.
The Directors must disclose to the Shareholders the aggregate remuneration paid to the Directors. The disclosure must be in a written document to be placed before the Shareholders at every annual meeting of Shareholders and must relate to the same time period as the financial statements required to be presented at the meeting relate to.
·	Annual Financial Statements
The Board must place before the Shareholders at every annual meeting of Shareholders financial statements which have been approved by the Board as evidenced by the signature of one or more of the Directors, the report of the auditor and any further information respecting the financial position of the Corporation and the results of its operations that is required by the ADCA, the Regulations, the Articles, the By-laws or any unanimous shareholder agreement.
SECTION 5.
MEETINGS OF DIRECTORS
·	Calling Meetings
The Chairperson of the Board, the Managing Director or any Director may call a meeting of Directors. A meeting of Directors or of a committee of Directors may be held within or outside of Alberta at the time and place indicated in the notice referred to in subsection (2).
·	Notice
Notice of the time and place of a meeting of Directors or any committee of Directors must be given to each Director or each Director who is a member of a committee not less than 48 hours before the time fixed for that meeting. Notice must be given in the manner prescribed in section 11. A notice of a meeting of Directors need not specify the purpose of the business to be transacted at the meeting except when the business to be transacted deals with a proposal to:
·	submit to the Shareholders any question or matter requiring the approval of the Shareholders;

·	fill a vacancy among the Directors or in the office of auditor;

·	issue securities;

·	declare dividends;

·	purchase, redeem or otherwise acquire shares issued by the Corporation,

·	pay a commission in connection with the sale of shares of the Corporation;

·	approve a management proxy circular;

·	approve any financial statements, or

·	adopt, amend or repeal By-laws.

·	Notice of Adjourned Meeting
Notice of an adjourned meeting of Directors is not required if a quorum is present at the original meeting and if the time and place of the adjourned meeting is announced at the original meeting. If a meeting is adjourned because a quorum is not present, notice of the time and place of the adjourned meeting must be given as for the original meeting. The adjourned meeting may proceed with the business to have been transacted at the original meeting, even though a quorum is not present at the adjourned meeting.
·	Meetings Without Notice.
No notice of a meeting of Directors or of a committee of Directors needs to be given:
·	to a newly elected Board following its election at an annual or special meeting of Shareholders; or

·	for a meeting of Directors at which a Director is appointed to fill a vacancy in the Board, if a quorum is present.

·	Waiver of Notice
A Director may waive, in any manner, notice of a meeting of Directors or of a committee of Directors. Attendance of a Director at a meeting of Directors or of a committee of Directors is a waiver of notice of the meeting, except when the director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
·	Quorum
The Directors may fix the quorum for meetings of Directors or of a committee of Directors, but unless so fixed, a majority of the Directors or of a committee of Directors constitutes a quorum. No business may be transacted unless at least half of the Directors present are resident Canadians.
·	Regular Meetings
The Board may by resolution establish one or more days in a month for regular meetings of the Board at a time and place to be named in the resolution. No notice is required for a regular meeting.
·	Chairperson of Meetings
The chairperson of any meeting of Directors is the first mentioned of the following Officers (if appointed) who is a Director and is present at the meeting: Chairperson of the Board, Managing Director, or President. If none of the foregoing Officers are present, the Directors present may choose one of their number to be chairperson of the-meeting.
·	Decision on Questions
Every resolution submitted to a meeting of Directors or of a committee of Directors must be decided by a majority of votes cast at the meeting. In the case of an equality of votes, the chairperson does not have a casting vote.
·	Meeting by Telephone
If all the Directors consent, Director may Participate in a meeting of Directors or of a committee of Directors by means of telephone or other communication facilities that permit all persons participating in the meeting to hear each other. A Director participating in a meeting by means of telephone or other communication facilities is deemed to be present at the meeting.
·	Resolution in Lieu of Meeting
A resolution in writing signed by all the Directors entitled to vote on that resolution at a meeting of Directors or committee of directors is as valid as if it had been passed at a meeting of Directors or committee of Directors. A resolution in writing takes effect on the date it is expressed to be effective.
A resolution in writing may be signed in one or more counterparts, all of which together constitute the same resolution. A counterpart signed by a Director and transmitted by facsimile or other device capable of transmitting a printed message is as valid as an originally signed counterpart,
SECTION 6.
OFFICERS AND APPOINTEES OF THE BOARD
·	Appointment of Officers
The Directors may designate the offices of the corporation, appoint as officers individuals of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the Corporation, except those powers referred to in section 4 which may not be delegated to a Managing Director or to a committee of Directors. Unless required buy the By-laws, an Officer does not have to be a Director. The same individual may hold two or more offices of the Corporation.
·	Term of Office
An Officer holds office from the date of the Officer’s appointment until a successor is appointed or until the Officer’s resignation or removal. An officer may resign by giving written notice to the Board. All Officers are, subject to removal by the Board, with or without cause.
·	Duties of Officers
An Officer has all the powers and authority and must perform all the duties usually incident to, or specified in the By-laws or by the Board for, the office held.
·	Remuneration
The Officers are entitled to receive remuneration for their services in the amount the Board determines, The Directors must disclose to the Shareholders the aggregate remuneration paid to the five highest Officers. The disclosure must be in a written document to be placed before the Shareholders at every annual meeting of Shareholders and must relate to the same time period as the financial statements required to be presented at the meeting relate to.
·	Chairperson of the Board
If appointed and present at the meeting, the Chairperson of the Board presides at all meetings of Directors, committees of Directors and, in the absence of the President, at all meetings of Shareholders. The Chairperson of the Board must be a Director.
·	Managing Director
If appointed, the Managing Director is responsible for the general supervision of the affairs of the Corporation. During the absence or disability of the Chairperson of the Board, or if no Chairperson of the Board has been appointed, the Managing Director exercises the functions of that office. Subject to section 4, the Board may delegate to the Managing Director any of the powers of the Board.
·	President
If appointed, the President is the chief executive officer of the Corporation responsible for the management of the business and affairs of the Corporation. During the absence or disability of the Managing Director, or if no Managing Director has been appointed, the President also exercises the functions of that office. The President may not preside as chairperson at any meeting of the Directors or of any committee of Directors unless the President is also a Director,
·	Vice-President
During the absence or disability of the President, or if no President has been appointed the Vice President or if there is no more the one, the Vice-President designated by the Board, exercises the functions of the office of the President.
·	Secretary
If appointed, the Secretary shall call meetings of the Directors or of a committee of Directors at the request of a Director. The Secretary shall attend” all meetings of Directors, of committees of Directors and of Shareholders and prepare and maintain a record of the minutes of the proceedings. The Secretary is the custodian of the corporate seal, the minute book and all records, documents and instruments belonging to the Corporation.
·	Treasurer
If appointed, the Treasurer is responsible for the preparation and maintenance of proper accounting records, the deposit of money, the safe-keeping of securities and the disbursement of funds of the Corporation. The Treasurer must render to the Board an account of all financial transactions of the Corporation upon request.
·	Agents and Attorneys
Board has the power to appoint agents or attorneys for the Corporation in or outside of Canada with any power the Board considers advisable.
SECTION 7.
CONFLICT OF INTEREST
·	Disclosure of Interest
A Director or Officer who;
·	is a party to a material contract or proposed material contract with the Corporation; or

·	is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the Corporation, must disclose in writing to the Corporation or request to have entered in the minutes of meetings of the Directors the nature and extent of the Director’s or Officer’s interest.

·	Approval and Voting
A Director or Officer must disclose in writing to the Corporation, Or request to have entered in the minutes of meetings of Directors, the nature and extent of the Director's or Officer's interest in a material contract or proposed material contract if the contract is one that in the ordinary course of the Corporation's business would not require approval by the Board or the Shareholders. The disclosure must be made immediately after the Director or Officer becomes aware of the contract or proposed contract. A Director who is required to disclose an interest in a material contract or proposed material contract may not vote on any resolution to approve the contract unless the contract is:
·	an arrangement by way of security for money lent to or obligations undertaken by the Director, or by a body corporate in which the director has an interest, for the benefit of the Corporation or an affiliate;

·	a contract relating primarily to the Director's remuneration as a Director or Officer, employee or agent of the Corporation or as a director, officer, employee or agent of an affiliate;

·	a contract for indemnity or insurance under the ABCA; or

·	a contract with an affiliate.

·	Effect of Conflict of Interest
If a material contract is made between the Corporation and a Director or Officer, or between the Corporation and another person of which a Director is a director of or officer or in which the Director or Officer has a material interest.
·	the contract is neither void nor voidable by reason only of that relationship, or by reason only that a Director with an interest in the contract is present at or is counted to determine the presence of a quorum at a meeting of Directors or committee of Directors that authorized the contract; and

·	a Director or Officer or former Director or Officer to whom a profit accrues as a result of the making of the contract is not liable to account to the Corporation for that profit by reason only of holding office as a Director or Officer,
if the Director or Officer disclosed the Director’s or Officer’s interest in the contract in the manner prescribed by the ABCA and the contract was approved by the Board or the Shareholders and was reasonable and fair to the Corporation at the time it was approved,
SECTION 8.
LIABILITY AND INDEMNIFICATION
·	Limitation of Liability
Every Director and Officer in exercising the powers and discharging the duties of office must act honestly and in good faith with a view to the best interests of the Corporation and must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. No Director or Officer is liable for:
·	the acts, omissions or defaults of any other Director or Officer or an employee of the Corporation;

·	any loss, damage or expense incurred by the Corporation through the insufficiency or deficiency of title to any property acquired for or on behalf of the Corporation;

·	the insufficiency or deficiency of any security in or upon which any of the money of the Corporation is invested;

·	any loss or damage arising from the bankruptcy, insolvency or tortuous or criminal acts of any person with whom any of the Corporation’s money is, or securities or other property are, deposited;

·	any loss occasioned by any or of judgement or oversight; or

·	any other loss, damage or misfortune which occurs in the execution of the duties of office or in relation to it,
unless occasioned by the willful neglect or default of that Director or Officer. Nothing in this By-law relieves any Director or Office of any liability imposed by the ABCA or otherwise by law.
·	Indemnity
The Corporation shall indemnify a Director or Officer, a former Director or Officer and a person who acts or acted at the Corporation’s request as a director or officer of a body corporate of which the Corporation is or was a shareholder or creditor (the “Indemnified Parties,”) and the heirs and legal representatives of each of them, against all costs, charges and expenses, which includes, without limiting the generality of the foregoing, the fees, charges and disbursements of legal counsel on an as-between-a-solicitor-and-the-solicitor’s-own-client basis and an amount paid to settle an action or satisfy a judgment, reasonably incurred by an Indemnified Party, or the heirs or legal representatives of an Indemnified Party, or both, in respect of any action or proceeding to which any of them is made a party by reason of an Indemnified Party being or having been a Director or Officer or a director or officer of that body corporate, if:
·	the Indemnified Party acted honestly and in good faith with a view to the best interests of the Corporation; and

·	in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Indemnified Party had reasonable grounds for believing that the Indemnified Party’s conduct was lawful.
The Corporation shall indemnify an Indemnified Party and the heirs and legal representatives of an Indemnified Party in any other circumstances that the A13CA permits or requires. Nothing in this By-law limits the right of a person entitled to indemnity to claim indemnity apart from the provisions of this By-law.
·	Insurance
The Corporation may purchase and maintain insurance for the benefit of a person referred to in subsection (2) against the liabilities and in the amounts the ABCA permits and the Board approves.
SECTION 9.
SECURITIES
·	Shares
Shares of the corporation may be issued at the times, to the persons and for the consideration the Board determines. No share may be issued until the consideration for the share is fully paid in money or in property or past service that is not less in value than the fair equivalent of the money that the Corporation would have received if the share had been issued for money.
·	Options and Other Rights to Acquire Securities
The Corporation may issue certificates, warrants or other evidences of conversion privileges, options or rights to acquire securities of the Corporation. The conditions attached to the conversion privileges, options and rights must be set out in the certificates, warrants or other evidences or in certificates evidencing the, securities to which the conversion privileges, options or rights are attached.
·	Commissions
The Board may authorize the Corporation to pay a reasonable commission to any person in consideration of that person purchasing or agreeing to purchase shares of the Corporation form the Corporation or from any other person, or procuring or agreeing to procure purchasers for shares of the Corporation.
·	Securities Register
The Corporation shall maintain at its records office a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series of securities:
·	the names, alphabetically arranged and the latest known address of each person who is or has been a security holder;

·	the number of securities held by each security holder; and

·	the date and particulars of the issue and transfer of each security.
The Corporation shall keep information relating to a security holder that is entered in the securities register for at least seven years after the security holder ceases to be a security holder.
·	Transfer Agents and Registrars
The Corporation may appoint one or mores trust corporations as its agent to maintain a central securities register and one or more agents to maintain a branch securities register. An agent may be designated as a transfer agent or a branch transfer agent, and a registrar, according to the agent’s function. An agent’s appointment may be terminated at any time. The Board may provide for the registration or transfer of securities by a transfer agent, branch transfer agent or registrar.
·	Dealings with Registered Holders
The Corporation may treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.
·	Transfers of Securities
Securities of the Corporation may be, transferred in the form of a transfer endorsement o-n the security certificates issued in respect of the securities of the Corporation, or in any form of transfer endorsement which may be approved by resolution of the Board.
·	Registration of Transfers
If a security in registered form is presented for registration of transfer, the Corporation must register the transfer if:
·	the security is endorsed by the person specified by the security or by special endorsement to be entitled to the security or by the person’s successor, fiduciary, survivor, attorney or authorized agent, as the case may be;

·	reasonable assurance is given that the endorsement is genuine and effective;

·	the Corporation has no duty to inquire into adverse claims, or has discharged its duty to do so;

·	any applicable law relating to the collection of taxes has been complied with-,

·	the transfer is rightful or is to a bona fide purchaser; and

·	the fee prescribed by the Board for a security certificate issued in respect of a transfer has been paid.

·	Lien
If the Articles provide that the Corporation has a lien on a share registered in the name of a Shareholder or the Shareholders legal representative for a debt of the Shareholder to the Corporation, and the Shareholder is indebted to the Corporation, the Corporation may refuse to register any transfer of the holder’s shares pending enforcement of the lien.
·	Security Certificates
Security certificates and acknowledgements of a security holder’s right to obtain a security certificate must be in a form the Board approves by resolution. A security certificate must be signed by at lest one Director or Officer. Unless the Board otherwise determines, security certificates representing securities in respect of which a transfer agent or registrar has been appointed are not valid unless countersigned by or on behalf of the transfer agent or registrar. Any signature may be printed or otherwise mechanically reproduced on a security certificate. If a security certificate contains a printed or mechanically reproduced signature of a person, the Corporation may issue the security certificate, notwithstanding that the person has ceased to be a Director of Officer, and the security certificate is as valid as if the person were a Director or Officer at the date of issue.
·	Entitlement to a Security Certificate
A security holder is entitled at the holder’s option to a security certificate or to a non-transferable written acknowledgement of the holder’s right to obtain a security certificate from the Corporation in respect of the securities of the Corporation held by that holder.
·	Securities Held Jointly
The Corporation is not required to issue more than one security certificate, in respect of securities held jointly be several persons. Delivery of a certificate to one of the joint holders is sufficient delivery to all of them. Any of the joint holders may give effectual receipts for the certificate issued in respect of the securities or for any dividend, bonus, return of capital or other money payable or warrant issuable in respect of the security.
·	Replacement of Security Certificates
The Board or an Officer or agent designated by the Board in its or the Office’s or agent’s discretion direct the issue of a new security certificate in place of a certificate that has been lost, destroyed or wrongfully taken. A new security certificate may be issued only on payment of a reasonable fee and on any terms as to indemnity, reimbursement of expenses and evidence of loss of title as the Board may prescribe.
·	Fractional Shares
The Corporation may issue a certificate for a fractional share or may issue in its place scrip certificates in a form that entitles the holder to receive a certificate for a full share by exchanging scrip certificates aggregating a full share. The Directors may attach conditions to any scrip certificates issued by the Corporation, including conditions that:
·	the scrip certificates become void if they are not exchanged for a share certificate representing a fall share before a specified date; and

·	any shares for which those scrip certificates are exchangeable may, notwithstanding any preemptive right, be issued by the Corporation to any person and the proceeds of those shares distributed ratably to the holders of the scrip certificates.
SECTION 10.
MEETING OF SHAREHOLDERS
·	Annual Meeting of Shareholders
The Board must call an annual meeting of Shareholders to be held not later than 18 months after the date of incorporation and subsequently, not later than 15 months after holding the last preceding annual meeting. An annual meeting is to be held for the purposes of considering the financial statements and auditors report, fixing the number of Directors for the following year, electing Directors, appointing an auditor and transacting any other business that may properly be brought before the meeting.
·	Special Meetings of Shareholders
The Board may at any time call a special meeting of Shareholders.
·	Special Business
All businesses transacted at a special meeting of Shareholders and all business transacted at an annual meeting of Shareholders, except consideration of the financial statements and auditor’s report, fixing the number of Directors for the following year, election of Directors and reappointment of the incumbent auditor, is deemed to be special business.
·	Place and Time of Meetings
Meetings of Shareholders may be held at the place within Alberta and at the time the Board determines. A meeting of Shareholders may be held outside Alberta if all the Shareholders entitled to vote at that meeting agree to holding the meeting outside Alberta. A Shareholder who attends a meeting of Shareholders held outside Alberta is deemed to have agreed to holding the meeting outside Alberta, except when the Shareholder attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held. Notwithstanding the foregoing, a meeting of Shareholders may be held outside of Alberta at one or more places specified in the Articles.
·	Notice of Meetings
Notice of the time and place of a meeting of Shareholders must be sent not less than 21 days and not more than 50 days before the meeting to:
·	each Shareholder entitled to vote at the meeting;

·	each Director; and

·	the auditor of the Corporation.
Notice of a meeting of Shareholders called for the purpose of transacting any business other than consideration of the financial statements and auditors report fixing the numbers of Directors for the following year, election of Directors and reappointment of the incumbent auditor must state the nature of the business to be transacted in sufficient detail to permit a Shareholder to form a reasoned judgment on that business and must state the text of any special resolution to be submitted to the meeting.
·	Notice of Adjourned Meetings
With the consent of the Shareholders present at a meeting of Shareholders, the chairperson may adjourn that meeting to another fixed time and place. If a meeting of Shareholders is adjourned by one or more adjournments for an aggregate of less than 30 days, it is not necessary to give notice of the adjourned meeting, other than by verbal announcement at the time of the adjournment, If a meeting of Shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting must be given as for the original meeting. The adjourned meeting may proceed with the business to have been transacted at the original meeting, even though a quorum is not present at the adjourned meeting.
·	Waiver of Notice
A Shareholder and any other person entitled to attend a meeting of Shareholders may waive in any manner notice of a meeting of Shareholders. Attendance of a Shareholder or other person at a meeting of Shareholders is a waiver of notice of the meeting, except when the Shareholder or other person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called
·	Shareholder List
If the Corporation has more than 15 Shareholders entitled to vote at a meeting of Shareholders, the Corporation must prepare a list of Shareholders entitled to receive notice of the meeting, arranged in alphabetical order and showing the number of shares held by each Shareholder;
·	if a record Date is fixed, not later than 10 days after that date; or

·	if no Record Date is fixed;

·	at the close of business on the last business day preceding the day on which the notice is given, or

·	if no notice is given, on the day on which the meeting is held,
A Shareholder may examine the list of Shareholders;
·	during usual business hours at the Corporation s records office or at the place where its central securities register is maintained; and

·	at the meeting of Shareholders for which the list was prepared.

·	Persons Entitled to Vote
A person named in a list of Shareholders is entitled to vote the shares shown opposite the person’s name at the meeting to which the list relates, except to the extent that.
·	·	if a Record Date is fixed, the person transfers ownership of any of the person's shares after the Record Date, or

·	if no Record Date is fixed, the person transfers ownership of any of the person's shares after the date of which the list of Shareholders is prepared; and

·	provided that the transferee of those shares

·	produces properly endorsed share certificates, or

·	otherwise establishes ownership of the shares;
and demands, not later than 10 days before the meeting, that the transferee's name be included in the list before the meeting, then the transferee is entitled to vote the shares.
·	Chairperson of Meetings
The chairperson of any meeting of Shareholders is the first mentioned of the following Officers (if appointed) who is present at the meeting: President, Chairperson of the Board or Managing Director. If none of the foregoing Officers are present, the Shareholders present and entitled to vote at the meeting may choose a chairperson from among those individuals present.
·	Scrutineer
If desired, one or more scrutineers, who need not be Shareholders, may be appointed by resolution or by the chairperson of the meeting with the consent of the meeting.
·	Procedure at Meetings
The chairperson of any meeting of Shareholders shall conduct the proceedings at the meeting in all respects. The chairpersons’ decision on any matter or thing relating to procedure, including, without limiting the generality of the foregoing, any question regarding the validity of any instrument of proxy or other evidence of authority to vote, is conclusive and binding upon the Shareholders.
·	Persons Entitled to be Present
The only persons entitled to be present at a meeting of Shareholders are:
·	the Shareholders entitled to vote at the meeting;

·	the Directors;

·	the auditor of the Corporation, and

·	any others who, although not entitled to vote, are entitled or required under any provision of the ABCA, any unanimous shareholders agreement, the Articles or the By-laws to be present at the meeting.
Any other person may be admitted only on the invitation of the chairperson of the meeting of with the consent of the meeting.
·	Quorum
A quorum of Shareholders is present at a meeting of Shareholders if a holder or holders of not less than 5% of the shares entitled to vote at a meeting of Shareholders are present in person or by proxy. If any share entitled to be voted at a meeting of Shareholders is held by two or more persons jointly, the persons or those of them who attend the meeting of Shareholders constitute only one Shareholder for the purpose of determining whether a quorum of Shareholders is present.
·	Loss of Quorum
If a quorum is present at the opening of a meeting of Shareholders, the Shareholders present or represented by proxy may proceed with the business of the meeting, even if a quorum is not present throughout the meeting. If a quorum is not present at the opening of a meeting of Shareholders, the Shareholders present or represented by proxy may adjourn the meeting to a fixed time and place bat may not transact any other business.
·	Proxy Holders and Representatives
A Shareholder entitled to vote at a meeting of Shareholders may by means of a proxy appoint a proxy holder and one or more alternate proxy holders, who are not required to be Shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. A proxy must be executed by the Shareholder or by the Shareholder’s attorney authorized in writing and be in the form prescribed by the Regulations. A proxy is valid only at the meeting in respect of which it is given or any adjournment of that meeting. An instrument of proxy signed by a Shareholder and transmitted by facsimile or other device capable of transmitting a printed message is as valid as an originally executed instrument of proxy.
A Shareholder that is a body corporate or association may, by resolution of its directors or governing body, authorize an individual to represent it in personal a meeting of Shareholders. That individual’s authority may be established by depositing with the Corporation prior to the commencement of the meeting a certified copy of the resolution passed by the Shareholder’s directors or governing body or other evidence of the individual’s authority to vote. A resolution or other evidence of authority to vote is valid only at the meeting in respect of which it is given or any adjournment of that meeting.
·	Time for Deposit of Proxies
The Board may specify in a notice calling a meeting of Shareholders a time not exceeding 48 hours, excluding Saturdays and holidays, preceding the meeting or an adjournment of the meeting before which proxies to be used at the meeting must be deposited with the Corporation or its agent. If no time for the deposit of proxies has been specified in a notice calling a meeting of Shareholders, a proxy to be used at the meeting must be deposited with the Secretary of the Corporation or the chairperson of the meeting prior to the commencement of the meeting.
·	Revocation of Proxies
A Shareholder may revoke a proxy:
·	by depositing an instrument in writing executed by the Shareholder or by the Shareholder's attorney authorized in writing:

·	at the registered office of the Corporation at any time up to and including the last business day preceding the day of the meeting, or an adjournment of that meeting, at which the proxy is to be used, or

·	with the chairperson at the meeting on the day of the meeting or an adjournment of the meeting; or

·	in any other manner permitted by law.

·	Joint Shareholders
If two or more persons hold shares jointly, one of those holders present at a meeting of Shareholders may, in the absence of the others, vote the shares. If two or more of those persons are present in person or by proxy, they must vote as one on the shares jointly held by them.
·	Decision on Questions
At every meeting of Shareholders all questions proposed for the consideration of Shareholders must be decided by the majority of votes, unless otherwise required by the ABCA or the Articles. In the case of an equality of votes, the chairperson of the meeting does not, either on a show of hands or verbal poll or on a ballot, have a casting vote in addition to the vote or votes to which the chairperson may be entitled as a Shareholder or proxy holder.
·	Voting by Show of Hands
Subject to subsection (22), voting at a meeting of Shareholders shall be by a show of hands of those present in person or represented by proxy or by a verbal poll of those present by telephone or other communication facilities. When a vote by show of hands has been taken upon a question, a declaration by the chairperson of the meeting that the vote has been carried, carried by a particular majority or not carried an entry to that effect in the minutes of the meeting is conclusive evidence of the fact without proof of the number of votes recorded in favour of or against any resolution or other proceeding in respect of the question.
·	Voting by Ballot
If a ballot is required by the chairperson of the meeting or is demanded by a Shareholder or proxy holder entitled to vote at the meeting, either before or on the declaration of the result of a vote by a show of hands or verbal poll, voting must be by ballot. A demand for a ballot may be withdrawn at any time before the ballot is taken. If a ballot is taken on a question, a prior vote on that question by show of hands or verbal poll has no effect.
·	Number of Votes
At every meeting a Shareholder present in person or represented by proxy or present by telephone or other communication facilities and entitled to vote has one vote for each share held.
·	Meeting by Telephone
Any person described in subsection (13) may participate in a meeting of Shareholders by means of telephone or other communication facilities that permit all persons participating in the meeting to hear each other. A Shareholder participating in a meeting by means of telephone or other communication facilities is deemed to be present at the meeting.
·	Resolution in Lieu of Meeting
A resolution in writing signed by all the Shareholders entitled to vote on that resolution at a meeting of Shareholders is as valid as if it had been passed at a meeting of Shareholders. A resolution in writing takes effect on the date it is expressed to be effective.
A resolution in writing may be signed in one or more counterparts, all of which together constitute the same resolution. A counterpart signed by a Shareholder and transmitted by facsimile or other device capable of transmitting a printed message is as valid as an originally signed counterpart.
SECTION 11.
NOTICES
·	Method of Notice
A notice or document required to be sent to a Shareholder, Director, Officer or auditor of the Corporation may be given by personal delivery, prepaid transmitted or recorded communication or prepaid mail addressed to the recipient at the recipient’s Recorded Address. A notice or document sent by personal delivery is deemed to be given when it is actually delivered, A notice or document sent by means of prepaid transmitted or recorded communication is deemed to be given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch. A notice of document sent by mail is deemed to be given when deposited at a post office or in a public letter box.
·	Notice to Joint Shareholders
If two or more persons are registered as joint holders of any share, a notice or document may be sent or delivered to all of them, but notice given to any one joint Shareholder is sufficient notice to the others.
·	Notice to Successors
Every person who, by operation of law, transfer, death of a Shareholder or any other means becomes entitled to any share, is bound by every notice in respect of the share which is sent or delivered to the Shareholder prior to the person’s name and address being entered in the Corporation’s securities register and prior to the person furnishing proof of authority or evidence of entitlement as prescribed by the ABCA. This subsection applies whether the notice was given before or after the event, which resulted in the person becoming entitled to the share.
·	Non-Receipt of Notices
If a notice or document is sent to a Shareholder, Director, Officer of auditor of the Corporation in accordance with subsection (1) and the notice or document is returned on three consecutive occasions, the Corporation is not required to give any further notice or documents to the person until that person informs the Corporation in writing of the person’s new address.
·	Failure to Give Notice
The accidental failure to give a notice to a Shareholder, Director, Officer or auditor of the Corporation, the non-receipt of a notice by the intended recipient or any error in a notice not affecting its substance does not invalidate any action taken at the meeting to which the notice relates.
·	Execution of Notices
Unless otherwise provided, the signature of any person designated by resolution of the Board to sign a notice or document on behalf of the Corporation may be written, stamped typewritten or printed.
     MADE by the Directors as evidenced by the signature of the following Director effective Jan 28, 1998.

                                                /s/Johnson
                                                --------------------------
                                                Steven F. Johnson
CONFIRMED by the Shareholders as evidenced by the signature of the following Shareholders effective Jan 28, 1998.

                                                /s/Johnson
                                                --------------------------
                                                Steven F. Johnson

TAX AGREEMENT PURSUANT TO RULE 45 (c)

UNDER THE PUBLIC UTILITY HOLDING ACT OF 1935
     WHEREAS, National Fuel Gas Company ("National"), a corporation organized under the laws of the State of New Jersey and a registered holding company under the Public Utility Holding Company Act of 1935 ("Act"), together with its wholly-owned domestic subsidiaries, listed below:

	National Fuel Gas Distribution Corporation
National Fuel Gas Supply Corporation
Seneca Resources Corporation
Leidy Hub, Inc.
Highland Forest Resources, Inc.
Data-Track Account Services, Inc.
National Fuel Resources, Inc.
Horizon Energy Development, Inc.
Horizon Energy Holdings, Inc., a wholly-owned subsidiary of Horizon Energy Development, Inc.
Seneca Independence Pipeline Company
Upstate Energy Inc.
Niagara Independence Marketing Company
Horizon Power, Inc.	
join annually in the filing of a consolidated federal income tax return; and
        WHEREAS, it is the intention of National and its subsidiaries (hereinafter collectively referred to as the “System”), to enter into a Tax Agreement relating to current federal income taxes; and
        WHEREAS, Rule 45 (c) of the Act has been adopted by the Securities and Exchange Commission with the specific intention of providing a method of allocation of consolidated income taxes by a registered holding company and its subsidiaries;
        NOW, THEREFORE, the System does hereby covenant and agree with one another that the consolidated current federal income tax liability of the System shall be allocated pursuant to Rule 45 (c) of the Act as follows:
        FIRST: There shall be allocated and preserved to each company the tax effects of its own capital gains or losses which shall be subject to the capital gains rate, if applicable, its tax credits, investment tax credit recapture and the effects of any other material items taxed at different rates or involving special benefits or limitations, which may be applicable to a particular company, including its carry-over amounts, to the extent those above described effects are utilized in the consolidated federal tax return in the taxable year.
        SECOND: After giving effect to the special allocations described in paragraph First above, the balance of the current federal tax liability of the System shall be allocated to each System company on the basis of each of their respective contributions of taxable income to the total consolidated taxable income of the System, excluding income subject to taxation at the capital gains rate, if applicable. The tax attributable to such capital gain income will have been separately allocated pursuant to paragraph First above. However, so long as National has negative taxable income, no portion of the current federal tax liability shall be allocated to National as a tax credit. Instead, the negative taxable income of National shall be allocated to those System companies which have positive taxable income, on the basis of each of these companies’ contribution of positive taxable income to the total positive taxable income of the System. The tax allocated to a company under this paragraph, which may be either positive or negative (except for National), shall be equal to the consolidated federal tax liability multiplied by a fraction, the numerator of which is the positive or negative corporate taxable income of the company (as adjusted by National’s negative taxable income described in this paragraph Second above and in paragraph Third), including any carry-over loss attributable to the company to the extent absorbed in the taxable year, and the denominator of which is the consolidated taxable income of the System (as adjusted in paragraphs First and Third). Companies with taxable income will be allocated a tax liability under this method while companies with net operating losses (except National) will be allocated a tax benefit or credit.
        THIRD: The tax effect of intercompany transactions eliminated in the calculation of consolidated taxable income shall be eliminated from the taxable income of the companies involved in such transactions in the calculations provided in paragraph Second.
        FOURTH: Any consolidated alternative minimum income tax and/or other federal tax arising from consolidated alternative minimum taxable income (AMTI) will be allocated among the companies on the basis of each of their respective contributions of positive AMTI to the total positive AMTI of the System.
        FIFTH: Under the method of allocation described in paragraphs First through Fourth above, the companies agree that the tax allocated to each company (except National) shall not exceed the amount of tax of such company based upon a separate return computed as if such company had always filed its tax returns on a separate return basis. However, in computing the separate return tax liability of a company, items of carry-forward, carry-back and intercompany transactions, to the extent that any or all of these items have been utilized by the System in a prior taxable year’s allocation, will be disregarded. In addition, federal tax rates that are less than the maximum rate imposed by Section 11 of the Internal Revenue Code shall be disregarded in computing the separate return tax liability of a company.
        FURTHER, the System does hereby covenant and agree with one another that the consolidated current state income tax liabilities of the System, for those states in which consolidated or combined returns are filed, shall be allocated pursuant to Rule 45 (c) of the Act as follows:
        ONE: To each company included in a consolidated or combined state return there shall be allocated the income tax effects of the company’s state taxable losses, any state tax credits and the material effects of any other features of the state tax code applicable to a particular company including its carry-over amounts to the extent that the above described effects are utilized in the consolidated or combined state return in the taxable year.
        TWO: To each company included in a consolidated or combined state return that generates state taxable income, there shall be allocated income tax expense by first increasing the state consolidated current income tax liability by the sum of the tax effects allocated in paragraph One above. The total shall then be allocated among those companies incurring an income tax expense based on the ratio of that company’s separate company state income tax to the sum of the separate company state income tax of all companies incurring state income tax expense in such state.
        THREE: If for any company there is an excess of allocated liability (pursuant to paragraphs One and Two) over the liability on a separate company basis, such excess shall be allocated among the companies with net state tax benefits.
        FURTHER, it is agreed by and among the System as follows:
        I. PAYMENTS : It is agreed that those companies allocated a current federal or state income tax liability under this agreement will pay such liability to National in the amounts and on the dates directed by National. National will, in turn, pay the consolidated tax to the relevant taxing jurisdiction and also to those companies which were allocated a tax benefit.
        II. SEPARATE RETURN LIABILITY : The System intends that the result of the method of tax allocation and payment will be:

 	(a) No company will pay more than its separate return liability as if it had always filed separate returns.

(b) Each company having a net operating loss or other net tax benefit will receive in current cash payments the benefit of its own net operating loss (except as described in paragraph Second) or other net tax benefits to the extent that the other companies can utilize such items to offset the tax liability they would otherwise have on a separate return basis or to the extent utilized in the consolidated return.	

        III. NATIONAL AS AGENT : Each company hereby irrevocably designates National as its agent for the purpose of taking any and all action necessary or incidental to the filing of any consolidated return. Each company agrees to furnish National with any and all information and to take any and all action as National may reasonably request that is necessary or appropriate for the proper filing of a consolidated return or for implementing the provisions of this Tax Agreement. Each company agrees that it will join in the consolidated returns to be filed by National as directed by National.
        IV. ADJUSTMENTS TO TAX LIABILITY : If the consolidated tax liability is adjusted for any tax year, whether by means of an amended return, claim for refund or as a result of a tax audit, the liability of National and each company shall be recomputed to give effect to such adjustment as if it had been made as part of the original computation of tax liability. In the case of a refund, National shall pay each company that portion of such refund as is attributable to the decrease in such company’s allocated tax liability caused by the adjustment, and in the case of an increase in tax liability, each company shall pay to National that portion of such increased tax liability (including penalties and interest, if any) as is attributable to the increase in each company’s allocated tax liability caused by the adjustment.
        V. EFFECTIVE DATE : This Tax Agreement will be effective for allocation of the current federal and state income tax liabilities of the System for the fiscal year 2000 and all subsequent years until this Tax Agreement is further amended in writing by each of the companies which is a party thereto. In the event a company ceases to be a member of the System, National shall remain the sole agent of such company with respect to the period for which such company was a member of the System and National shall have sole authority to contest any tax liability with respect to such period. The obligations of a company under this Tax Agreement, including but not limited to the obligation to cooperate with National in seeking a refund of tax for a year in which a consolidated return was filed, shall continue after such company ceases to be a member of the System.
        VI. APPROVAL AND AMENDMENTS : This Tax Agreement is subject to the approval of the Securities and Exchange Commission. Any amendments to this Tax Agreement may be made only with the unanimous written consent of all the parties hereto. A copy of this Tax Agreement is being filed as an exhibit to National’s Annual Report to the Securities and Exchange Commission on Form U5S for the year ended September 30, 2001. Any amendments to this Tax Agreement will be filed as an exhibit to National’s Form U5S for the year when the amendment becomes effective. It is contemplated that any additional companies which hereafter become associated with the System shall join in and become a party to this Tax Agreement by amendment thereto.
        VII. PRIOR AGREEMENTS SUPERSEDED : Any prior agreements relating to the allocation of income tax liability among the System are superseded.
        IN WITNESS WHEREOF, each of the parties hereto has caused this Tax Agreement to be executed in its name and on its behalf by one of its officers duly authorized on this 28th day of January 2002.

	NATIONAL FUEL GAS COMPANY

By: /s/Joseph P. Pawlowski
Joseph P. Pawlowski
Treasurer

NATIONAL FUEL GAS DISTRIBUTION CORPORATION

By: /s/Joseph P. Pawlowski
Joseph P. Pawlowski
Treasurer

NATIONAL FUEL GAS SUPPLY CORPORATION

By: /s/Joseph P. Pawlowski
Joseph P. Pawlowski
Treasurer

SENECA RESOURCES CORPORATION

By: /s/Thomas L. Atkins
Thomas L. Atkins
Treasurer

LEIDY HUB, INC.

By: /s/Gerald T. Wehrlin
Gerald T. Wehrlin
Treasurer

HIGHLAND FOREST RESOURCES, INC.

By: /s/Thomas L. Atkins
Thomas L. Atkins
Treasurer

DATA-TRACK ACCOUNT SERVICES, INC.

By: /s/William M. Petmecky
William M. Petmecky
Treasurer

NATIONAL FUEL RESOURCES, INC.

By: /s/William M. Petmecky
William M. Petmecky
Treasurer

HORIZON ENERGY DEVELOPMENT, INC.

By: /s/Ronald J. Tanski
Ronald J. Tanski
Treasurer

HORIZON ENERGY HOLDINGS, INC.

By: /s/Ronald J. Tanski
Ronald J. Tanski
Treasurer

SENECA INDEPENDENCE PIPELINE COMPANY

By: /s/Walter E. DeForest
Walter E. DeForest
Treasurer

UPSTATE ENERGY INC.

By: /s/Thomas L. Atkins
Thomas L. Atkins
Treasurer

NIAGARA INDEPENDENCE MARKETING COMPANY

By: /s/Thomas L. Atkins
Thomas L. Atkins
Treasurer

HORIZON POWER, INC.

By: /s/William M. Petmecky
William M. Petmecky
Treasurer	

Exhibit G-1
National Fuel Gas Company
Organization Chart of Foreign Utility Company Ownership (FUCO)
As of September 30, 2001

                           ---------------------------
                            National Fuel Gas Company
                           ---------------------------

                                                     100%
                       ----------------------------------
                        Horizon Energy Development, Inc.
                       ----------------------------------

                                                     100%
                         -------------------------------
                          Horizon Energy Holdings, Inc.
                         -------------------------------

                                                     100%
                        ---------------------------------
                         Horizon Energy Development B.V.
                        ---------------------------------

                                                     100%
                            -------------------------
                             Teplarna Kromeriz, a.s.
                                     (FUCO)
                            -------------------------
Note: Percents reported represent percent of voting power as of September 30, 2001

Exhibit G-2
National Fuel Gas Company
Organization Chart of Foreign Utility Company Ownership (FUCO)
As of September 30, 2001

                           ---------------------------
                            National Fuel Gas Company
                           ---------------------------

                                                     100%
                       ----------------------------------
                        Horizon Energy Development, Inc.
                       ----------------------------------

                                                     100%
                         -------------------------------
                          Horizon Energy Holdings, Inc.
                         -------------------------------

                                                     100%
                        ---------------------------------
                         Horizon Energy Development B.V.
                        ---------------------------------

                                                  85.163%
                          ----------------------------
                               United Energy, a.s.
                                     (FUCO)
                          ----------------------------

                                                      70%
                            ------------------------
                             Teplarna Liberec, a.s.
                                     (FUCO)
                            ------------------------
Note: Percents reported represent percent of voting power as of September 30, 2000

Exhibit G-3
National Fuel Gas Company
Organization Chart of Exempt Wholesale Generator (EWG)
As of September 30, 2001

                           ---------------------------
                            National Fuel Gas Company
                           ---------------------------

                                                     100%
                       ----------------------------------
                               Horizon Power, Inc.
                                     (EWG)
                       ----------------------------------

                                                      50%
                       ----------------------------------
                          Energy Systems North East LLC
                                     (EWG)
                       ----------------------------------

PricewaterhouseCoopers
PricewaterhouseCoopers Audit, s.r.o.
Exhibit H-1

Katerinska 40
120 00 Prague 2
Czech Republic
Telephone +420 (2) 5115 1111
Facsimile +420 (2) 5115 6111
ID No. 40765521
REPORT OF INDEPENDENT AUDITORS

TO THE SHAREHOLDERS OF UNITED ENERGY, a.s.
We have audited the accompanying balance sheet of United Energy, a.s. as at 31 December 2000, the related income statement and notes, including the statement of cash flows, for the year then ended (“the financial statements”). The financial statements and underlying accounting records are the responsibility of the Company’s Board of Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the Act on Auditors and Auditing Standards of the Chamber of Auditors of the Czech Republic. Those auditing standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the accompanying financial statements present fairly, in all material respects, the assets, liabilities and equity of United Energy, a.s. as at 31 December 2000, and the results of its operations and its cash flows for the year then ended in accordance with the Act on Accounting and other relevant legislation of the Czech Republic.

2 March 2001

/s/PricewaterhouseCoopers

PricewaterhouseCoopers Audit, s.r.o.
Represented by

/s/Thomas Linder                                          /s/Ivana Kunova

Thomas Linder                                             Ivana Kunova
Partner                                                   Auditor, Licence No. 1784
PricewaterhouseCoopers Audit, s.r.o. is registered in the Commercial Register with the Municipal Court in Prague, part C section No. 3637 and in the Register of Audit Companies with the Chamber of Auditors of the Czech Republic under Licence No. 21.

                              UNITED ENERGY, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                                     ASSETS

                                                 12/31/2000     12/31/1999
                                                 ------------  -------------

                                                        (CZK 000's)

Total Assets                                       7,351,583      5,369,011
                                                 ============  =============

Fixed Assets                                       6,747,401      4,840,790
                                                 ------------  -------------

    Intangible Fixed Assets                            4,651            325
                                                 ------------  -------------

      Software                                         3,005            311
      Other Intangible Fixed Assets                        -              5
      Intangible Assets in the Course of Construction  1,646              9
                                                 ------------  -------------

    Tangible Fixed Assets                          6,331,052      4,840,339
                                                 ------------  -------------

      Land                                            43,772         10,273
      Buildings and Constructions                  1,624,883        774,089
      Equipment                                    4,330,939      3,596,360
      Other Tangible Fixed Assets                        388            640
      Tangible Assets in the Course of Construction  216,726        458,240
      Advances Paid for Tangible Fixed Assets        114,344            737
                                                 ------------  -------------

    Long-Term Investments                            411,698            126
                                                 ------------  -------------

      Investments in Group Undertakings              411,643            120
      Investments in Associated Companies of the Group    49              -
      Other Investments                                    6              6
                                                 ------------  -------------

Current Assets                                       581,629        441,740
                                                 ------------  -------------

    Inventories                                      103,874         69,124
                                                 ------------  -------------

      Raw Materials                                  103,874         69,124
                                                 ------------  -------------

    Long-Term Receivables                             13,909            175
                                                 ------------  -------------

      Long-Term Trade Receivables                     13,909            175
                                                 ------------  -------------

    Short-Term Receivables                           213,441        166,633
                                                 ------------  -------------

      Trade Receivables                              159,027        136,196
      Tax Receivables and State Subsidies
         Receivable                                   31,517         30,013
      Other Receivables from Group Undertakings       22,000              -
      Other Receivables                                  897            424
                                                 ------------  -------------

    Financial Assets                                 250,405        205,808
                                                 ------------  -------------

      Cash in Hand                                       415            314
      Cash at Bank                                   149,990         95,494
      Short-Term Investments                         100,000        110,000
                                                 ------------  -------------

Other Assets                                          22,553         86,481
                                                 ------------  -------------

    Accruals and Deferrals                            22,136         86,274
                                                 ------------  -------------

      Prepaid Expenses                                   833            765
      Accrued Revenue                                     34              -
      Unrealized Exchange Rate Losses                 21,269         85,509
                                                 ------------  -------------

    Anticipated Assets                                   417            207
                                                 ------------  -------------

                              UNITED ENERGY, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                         LIABILITIES AND OWNER'S EQUITY

                                               12/31/2000     12/31/1999
                                               ------------  -------------

                                                      (CZK 000's)

Total Liabilities and Equity                     7,351,583      5,369,011
                                               ============  =============

Equity                                           4,286,863      2,374,145
                                               ------------  -------------

    Registered Capital                           1,912,932      1,006,309
                                               ------------  -------------

      Registered Capital                         1,912,932      1,006,309
                                               ------------  -------------

    Capital Contributions                          252,572            169
                                               ------------  -------------

      Share Premium                                226,656              -
      Other Capital Contributions                   25,916            169
                                               ------------  -------------

    Reserve Funds                                  301,203        160,952
                                               ------------  -------------

      Statutory Reserve Fund                       297,977        158,086
      Statutory and Other Reserves                   3,226          2,866
                                               ------------  -------------

    Retained Earnings                            1,645,004      1,067,855
                                               ------------  -------------

      Retained Profits                           1,645,004      1,067,855
                                               ------------  -------------

    Profit (Loss) for the Current Period (+/-)     175,152        138,860
                                               ------------  -------------

Liabilities                                      3,054,226      2,973,985
                                               ------------  -------------

    Provisions                                      37,253         43,228
                                               ------------  -------------

      Tax-Deductible Provisions                          -         43,228
      Provision for Exchange Rate Losses            21,269              -
      Non-deductible Provisions                     15,984              -
                                               ------------  -------------

    Long-Term Liabilities                            3,315              -
                                               ------------  -------------

      Other Long-Term Liabilities                    3,315              -
                                               ------------  -------------

    Short-Term Liabilities                         668,649      1,334,833
                                               ------------  -------------

      Trade Payables                               303,621        307,271
      Liabilities to Shareholders/Owners               468              -
      Payroll Payable and Other Liabilities
        to Employees                                10,187          6,523
      Liabilities for Social Insurance               7,453          6,423
      Tax Liabilities                                2,331          8,152
      Deferred Tax Liability                       294,339        211,061
      Liabilities to Group Undertakings             50,000        795,136
      Other Payables                                   250            267
                                               ------------  -------------

    Bank Loans & Overdrafts                      2,345,009      1,595,924
                                               ------------  -------------

      Long-Term Bank Loans                       1,038,553      1,276,739
      Short-Term Bank Loans                      1,306,456        319,185
                                               ------------  -------------

Other Liabilities                                   10,494         20,881
                                               ------------  -------------

    Accruals and Deferrals                           1,349              -
                                               ------------  -------------

      Accruals                                       1,349              -
                                               ------------  -------------

    Anticipated Liabilities                          9,145         20,881
                                               ------------  -------------

                              UNITED ENERGY, a.s.
                    FINANCIAL STATEMENTS - INCOME STATEMENT

                                                                   12/31/2000     12/31/1999
                                                                   ------------  -------------

                                                                          (CZK 000's)

Sale of Production (A)                                               2,994,559      2,247,940
                                                                   ------------  -------------

    Sales of Own Products and Services                               2,977,359      2,247,192
    Change in Inventory of Finished Goods and Work in Progress           5,630              -
    Own Work Capitalized                                                11,570            748
                                                                   ------------  -------------

Cost of Sales (B)                                                    1,800,475      1,446,426
                                                                   ------------  -------------

    Raw Materials and Consumables                                    1,461,015      1,121,739
    Services                                                           339,460        324,687
                                                                   ------------  -------------

Added Value (A)-(B) (+)                                              1,194,084        801,514
                                                                   ------------  -------------

Staff Costs (-)                                                        246,434        147,837
                                                                   ------------  -------------
    Wages and Salaries                                                 178,630        108,369
    Emoluments of Board Members                                          1,007            180
    Social Security Costs                                               62,894         37,556
    Other Social Costs                                                   3,903          1,732
                                                                   ------------  -------------
Taxes and Charges (-)                                                    3,392          1,197
Depreciation of Fixed Assets (-)                                       361,307        244,136
Sale of Fixed Assets and Raw Materials (+)                              21,273         52,202
Net Book Amount of Fixed Assets and Raw Materials Sold (-)              13,492         43,045
Provisions Written Back to Operating Income (+)                         43,228         38,964
Amounts Written Back to Operating Assets (+)                            10,988            525
Amounts Written Off Operating Assets (-)                                19,229          1,142
Other Operating Income (+)                                                 839            100
Other Operating Charges (-)                                             54,459         65,977
                                                                   ------------  -------------

Operating Result (C)                                                   572,099        389,971
                                                                   ------------  -------------

Income from Sales of Securities and Shares (+)                          45,390              -
Securities and Shares Sold (-)                                          34,200              -
Provisions Written Back to Financial Income (+)                              -            443
Provisions for Financial Liabilities and Charges (-)                    37,253              -
Interest Income (+)                                                     13,498         16,667
Interest Expense (-)                                                   189,997        187,462
Other Financial Income (+)                                              17,299          5,840
Other Financial Expense (-)                                            147,785          1,136
                                                                   ------------  -------------

Result from Financial Transactions (D)                                (333,048)      (165,648)
                                                                   ------------  -------------

Tax on Profit or Loss on Ordinary Activities (E)                        55,505         89,175
                                                                   ------------  -------------
    -current                                                             1,646              -
    -deferred                                                           53,859         89,175
                                                                   ------------  -------------

Profit or Loss on Ordinary Activities After Taxation (C)+(D)-(E) = (F) 183,546        135,148
                                                                   ------------  -------------

Extraordinary Income (+)                                                10,653          4,010
Extraordinary Charges (-)                                               19,047            298
                                                                   ------------  -------------

Profit or Loss on Extraordinary Items After Taxation (G)                (8,394)         3,712
                                                                   ------------  -------------

Net Profit or Loss for the Financial Period (F)+(G)                    175,152        138,860
                                                                   ============  =============

Profit or Loss Before Taxation                                         230,657        228,035
                                                                   ============  =============

                              UNITED ENERGY, a.s.
                                   CASH FLOW

                                                                             12/31/2000     12/31/1999
                                                                             ------------  -------------

                                                                                    (CZK 000's)

Cash and Cash Equivalents at the Beginning of the Year (P)                       205,808         37,753
                                                                             ------------  -------------

Net Profit (Loss) on Ordinary Activities Before Tax (A)                          239,051        224,323
                                                                             ------------  -------------

Adjustments for Non-Cash Movements (B)                                           591,242        282,159
                                                                             ------------  -------------

    Depreciation of Fixed Assets                                                 363,050        244,573
    Change in General Provisions, Accruals and Prepayments                        64,857       (132,591)
    (Profit)/Loss from Disposal of Fixed Assets                                  (13,164)          (618)
    Net Interest Expense                                                         176,499        170,795
                                                                             ------------  -------------

Net Cash Flows from Ordinary Activities (A) + (B) = (C)                          830,293        506,482
                                                                             ------------  -------------

Working Capital Changes: (D)                                                     (38,020)        62,247
                                                                             ------------  -------------

    (Increase)/Decrease in Receivables                                           (49,545)       135,446
    Increase/(Decrease) in Short Term Payables                                    46,275        (59,418)
    (Increase)/Decrease in Inventories                                           (34,750)       (13,781)
                                                                             ------------  -------------

Net Cash Flows from Ordinary Activities Before Tax (C) + (D) = (E)               792,273        568,729

Interest Paid (F)                                                               (189,997)      (187,462)
Interest Received (G)                                                             13,498         16,667
Income Tax on Ordinary Activities Paid (H)                                        (2,476)             -
Cash Movements Relating to Extraordinary Profit/(Loss)
    Including Tax Paid on Extraordinary Income (I)                                (8,394)         3,712
                                                                             ------------  -------------

Net Cash Flows from Ordinary Activities (E) + (F) + (G) + (H) + (I) = (L)        604,904        401,646
                                                                             ------------  -------------

Acquisitions of Fixed Assets                                                    (546,449)      (444,103)
Proceeds from Sale of Fixed Assets                                                42,523            998
Loans to Related Parties                                                         (22,000)             -
                                                                             ------------  -------------

Net Cash Flows From Investing Activities (M)                                    (525,926)      (443,105)
                                                                             ------------  -------------

Change in Long Term and Short Term Liabilities (J)                                 7,264        211,513
Changes in Equity (K)                                                            (41,645)        (1,999)
                                                                             ------------  -------------

    Direct Payments from Reserves                                                 (3,043)        (1,819)
    Dividends Paid                                                               (38,602)          (180)
                                                                             ------------  -------------

Net Cash Flows from Financing Activities (J) + (K) = (N)                         (34,381)       209,514
                                                                             ------------  -------------

Net Increase (Decrease) in Cash and Cash Equivalents (L) + (M) + (N) = (O)        44,597        168,055
                                                                             ------------  -------------

Cash and Cash Equivalents at the End of the Year (O) + (P)                       250,405        205,808
                                                                             ============  =============

Exhibit H-2

AUDITOR'S REPORT PricewaterhouseCoopers Audit, s.r.o.
Katerinska 40
120 00 Prague 2
Czech Republic
Telephone +420 (2) 5115 1111
Facsimile +420 (2) 5115 6111
Company ID 40765521
REPORT OF INDEPENDENT AUDITORS

TO THE SHAREHOLDERS OF TEPLARNA LIBEREC, a.s.
We have audited the accompanying balance sheet of Teplarna Liberec, a.s. as at 31 December 2000, the related income statement and notes, including the statement of cash flows, for the year then ended (“the financial statements”). The financial statements and underlying accounting records are the responsibility of the Company’s Board of Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the Act on Auditors and Auditing Standards of the Chamber of Auditors of the Czech Republic. Those auditing standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the accompanying financial statements present fairly, in all material respects, the assets, liabilities and equity of Teplarna Liberec, a.s. as at 31 December 2000, and the results of its operations and its cash flows for the year then ended in accordance with the Act on Accounting and other relevant legislation of the Czech Republic.
2 March 2001

PricewaterhouseCoopers Audit, s.r.o.
Represented by

Thomas Linder                                             Ivana Kunova
Partner                                                   Auditor, Licence No. 1784
PricewaterhouseCoopers Audit, s.r.o. is registered in the Commercial Register with the Municipal Court in Prague, part C section No. 3637, and in the Register of Audit Companies with the Chamber of Auditors of the Czech Republic under Licence No. 21.

                             TEPLARNA LIBEREC, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                                     ASSETS

                                                       12/31/2000     12/31/1999
                                                       ------------  -------------

                                                              (CZK 000's)

Total Assets                                               555,609        592,026
                                                       ============  =============

Fixed Assets                                               393,999        389,073
                                                       ------------  -------------

    Intangible Assets                                          406            379
                                                       ------------  -------------

      Software                                                 354            316
      Patents, Copyrights, Trademarks, Tradenames               52             63
                                                       ------------  -------------

    Fixed (Tangible) Assets                                393,593        388,694
                                                       ------------  -------------

      Land                                                   7,050          7,137
      Plant (Buildings, Halls and Construction)            132,650        122,957
      Capital Equipment                                    246,220        251,833
      Acquisition of Fixed Asset in Progress                 7,673          5,930
      Deposits Towards Fixed Acquisitions                        -            837
                                                       ------------  -------------

Current Assets                                             161,083        202,454
                                                       ------------  -------------

    Inventory                                                6,356         59,944
                                                       ------------  -------------

      Raw Materials                                          6,356         59,944
                                                       ------------  -------------

    Long-Term Receivables                                        -            481
                                                       ------------  -------------

      Long-Term Receivables                                      -            481
                                                       ------------  -------------

    Accounts Receivable                                     66,987         62,398
                                                       ------------  -------------

      Accounts Receivable                                   55,714         56,387
      Receivable - Taxes                                    11,214          5,758
      Other Accounts Receivable                                 59            253
                                                       ------------  -------------

    Current Liquid Assets                                   87,740         79,631
                                                       ------------  -------------

      Petty Cash and Deposits in Transit                        59            139
      Cash in Bank                                          12,681          3,992
      Marketable Securities                                 75,000         75,500
                                                       ------------  -------------

Other Assets - Temporary Debit Accounts                        527            499
                                                       ------------  -------------

    Accruals                                                   419            198
                                                       ------------  -------------

      Prepaid Expenses                                         348             94
      Unbilled Revenue                                          71            104
                                                       ------------  -------------

    Contingencies and Estimate Prepaid Items (Debit Balance)   108            301
                                                       ------------  -------------

                             TEPLARNA LIBEREC, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                         LIABILITIES AND OWNER'S EQUITY

                                                        12/31/2000     12/31/1999
                                                        ------------  -------------

                                                               (CZK 000's)

Total Liabilities and Owner's Equity                        555,609        592,026
                                                        ============  =============

Owner's Equity                                              507,196        532,149
                                                        ------------  -------------

    Capital Stock at Par                                    500,000        500,000
                                                        ------------  -------------

      Capital Stock at Par                                  500,000        500,000
                                                        ------------  -------------

    Restricted Retained Earnings                              3,583          2,461
                                                        ------------  -------------

      Statutory Reserve Account                               2,609          2,461
      Other Equity Accounts                                     974              -
                                                        ------------  -------------

    Retained Earnings                                        27,540         26,731
                                                        ------------  -------------

      Retained Earnings                                      27,540         26,731
                                                        ------------  -------------

    Net Income or Net Loss                                  (23,927)         2,957
                                                        ------------  -------------

External Sources (of Money)                                  43,505         57,329
                                                        ------------  -------------

    Reserves                                                      -         17,707
                                                        ------------  -------------

      Other Reserves                                              -         17,707
                                                        ------------  -------------

    Current Liabilities                                      43,505         39,622
                                                        ------------  -------------

      Accounts Payable                                       34,172         31,142
      Payroll Payable                                         2,105          2,295
      Social Security Payable                                 1,328          1,376
      Taxes Payable                                             387          1,541
      Deferred Taxes Payable                                  5,489          3,121
      Other Payables                                             24            147
                                                        ------------  -------------

Other Liabilities and Equity - Closing Accounts               4,908          2,548
                                                        ------------  -------------

    Accrual Accounts                                          1,235            702
                                                        ------------  -------------

      Accrued Expenses                                        1,171            667
      Unearned Revenue                                           64             35
                                                        ------------  -------------

    Contingencies and Estimated Accrued
        Items (Credit Balance)                                3,673          1,846
                                                        ------------  -------------

TEPLARNA LIBEREC, a.s.
FINANCIAL STATEMENTS - INCOME STATEMENT

                                                                   12/31/2000     12/31/1999
                                                                   ------------  -------------

                                                                          (CZK 000's)

Revenue (from Sale of Merchandise)                                           -            154
                                                                   ------------  -------------

Cost of Goods Sold (Merchandise)                                             -            154
                                                                   ------------  -------------

Gross Profit on Merchandise Sold                                             -              -
                                                                   ------------  -------------

Revenue (from Sale of Manufactured Goods) (A)                          546,856        564,409
                                                                   ------------  -------------

    Revenue (from Sale of Manufactured Goods and/or Services)          546,808        564,355
    Self-Constructed Asset Revenue                                          48             54
                                                                   ------------  -------------

Cost of Materials Used in Manufacturing (B)                            517,716        474,495
                                                                   ------------  -------------

    Raw Materials and Utilities Used                                   334,328        284,859
    Services Used                                                      183,388        189,636
                                                                   ------------  -------------

Gross Profit on Sales (A) - (B) (+)                                     29,140         89,914
                                                                   ------------  -------------

Payroll (-)                                                             46,079         47,041
                                                                   ------------  -------------
    Wages and Salaries                                                  32,798         32,917
    Board Members Fees and Bonuses                                         960            820
    Social Security Expenses                                            11,553         11,449
    Fringe Benefits                                                        768          1,855
                                                                   ------------  -------------
Taxes and Fees (-)                                                          80             62
Amortization of Intangible and Depreciation
   of Tangible Fixed Assets (-)                                         31,868         29,900
Moneys Received from Sale of Fixed Assets and Raw Materials (+)          1,090            152
Net Book Value of Disposed Fixed Assets or Raw Materials (-)               534            354
Clearing of Reserves and Accrued Revenue (+)                            17,707          4,779
Creation of Reserves and Accrued Expenses (-)                                -          9,707
Clearing of Gains on Assets to Operating Revenue (+)                     1,700            989
Clearing of Losses on Assets to Operating Expense (-)                    3,320          2,950
Other Operating Gains (Revenues) (+)                                     7,508          4,408
Other Operating Expenses (-)                                             4,480          9,721
                                                                   ------------  -------------

Operating Income (C)                                                   (29,216)           507
                                                                   ------------  -------------

Gains on Investments (+)                                                     -              2
                                                                   ------------  -------------
    Gains on Other Securities and Direct Investments                         -              2
                                                                   ------------  -------------
Gains on Marketable Securities (+)                                       4,618          3,715
Interest Income (+)                                                      1,378          2,360
Interest Expense (-)                                                         -            161
Other Expenses on Investments (-)                                          112            142
                                                                   ------------  -------------

Profit/Loss from Financial Operations (D)                                5,884          5,774
                                                                   ------------  -------------

Income Tax (E)                                                           4,006          4,496
                                                                   ------------  -------------
    -payable                                                             1,638          2,061
    -deferred                                                            2,368          2,435
                                                                   ------------  -------------

Income from Operations (C)+(D)-(E) = (F)                               (27,338)         1,785
                                                                   ------------  -------------

Unusual and/or Extraordinary Gain/Income (+)                             4,740          1,355
Unusual and/or Extraordinary Loss/Expenses (-)                           1,329            183
                                                                   ------------  -------------

Unusual Profit/Loss (G)                                                  3,411          1,172
                                                                   ------------  -------------

Net Income/Loss for Fiscal Period (F)+(G)                              (23,927)         2,957
                                                                   ============  =============

Income Before Tax                                                      (19,921)         7,453
                                                                   ============  =============

                             TEPLARNA LIBEREC, a.s.
                              CASH FLOW STATEMENT

                                                                     12/31/2000    12/31/1999
                                                                     -----------  --------------

                                                                            (CZK 000's)

Cash Flow from Ordinary Activities

Net Profit/Loss from Current Operations Before Tax (A)                  (23,332)          6,281
                                                                     -----------  --------------

Adjustments for Non-Cash Movements (B)                                   11,683          26,492
                                                                     -----------  --------------

    Depreciation of Fixed Assets                                         32,343          30,701
    Change in General Provisions, Accruals and Prepayments              (14,164)          1,449
    Profit/Loss from Disposal of Tangible Assets                           (500)            256
    Net Interest Expense                                                 (5,996)         (5,914)
                                                                     -----------  --------------

Net Cash Flows from Ordinary Activities Before Tax,
    Changes in Current Assets and Extraordinary Items (A) + (B) = (C)   (11,649)         32,773
                                                                     -----------  --------------

Increase/Decrease in Current Assets (D)                                  51,358          23,225
                                                                     -----------  --------------

    Increase/Decrease in Receivables                                     (3,177)         (1,613)
    Increase/Decrease in Short Term Payables                              2,273          19,410
    Increase/Decrease in Inventories                                     52,262           5,428
                                                                     -----------  --------------

Net Cash Flows from Ordinary Activities Before Tax
    and Extraordinary Items (C) + (D) = (E)                              39,709          55,998

Interest Paid (F)                                                             -            (161)
Interest Received (G)                                                     5,996           6,075
Income Tax on Ordinary Activities Paid (H)                               (4,502)         (6,506)
Revenues and Expenses Related to Extraordinary Items (I)                   (768)            291
                                                                     -----------  --------------

Net Cash Flows from Ordinary Activities
    (E) + (F) + (G) + (H) + (I) = (L)                                    40,435          55,697
                                                                     -----------  --------------

Cash Flows from Investing Activities

Acquisitions of Fixed Assets                                            (32,310)        (37,363)
Proceeds from Sale of Fixed Assets                                        1,010              80
                                                                     -----------  --------------

Net Cash Flows From Investing Activities (M)                            (31,300)        (37,283)
                                                                     -----------  --------------

Cash Flows from Financing Activities

Change in Long Term and Short Term Liabilities (J)                            -          (5,155)
Changes in Equity (K)                                                    (1,026)           (350)
                                                                     -----------  --------------

    Dividends Paid                                                       (1,026)           (350)
                                                                     -----------  --------------

Net Cash Flows from Financing Activities (J) + (K) = (N)                 (1,026)         (5,505)
                                                                     -----------  --------------

Net Increase in Cash and Cash Equivalents (L) + (M) + (N) = (O)           8,109          12,909

Cash and Cash Equivalents at the Beginning of the Year (P)               79,631          66,722
                                                                     -----------  --------------

Cash and Cash Equivalents at the End of the Year (O) + (P)               87,740          79,631

                                                                     ===========  ==============

Exhibit H-3

         Auditor’s report on audit of financial statements of Teplárna Kromeríz, a.s.
intended for shareholders of this Company, with its registered seat at Kromeríz, Na sádkách 3572.
The 2000 financial statements of Teplárna Kromeríz, a.s. seated at Kromeríz, Na sádkách 3572, were audited due to legal obligation to provide financial statements audited by an auditor.
The ordinary financial statements prepared as of December 31, 2000 were subject to the audit pursuant to Section 14(1) and (2) of the Czech National Council’s Act No. 524/1992 Coll.
In our audit, we paid attention to:
·	a checkout of the balance sheet continuity;
·	a checkout of linking of balances on synthetic accounts to the balance sheet and the profit and loss statement. This checkout was carried out in Microsoft Excel. After balances of synthetic accounts had been taken over and control statements had been made, no differences were found out;
·	the system of accounting procedures and internal audit in year 2000, with regard to methodological and technical approaches and the compliance with valid regulations, particularly with the Act No. 563/1991 Coll., on Accounting Procedures, and with the ruling of the Federal Ministry of Finance, reg. No. V/20-100/1992, on Account Classification and Accounting Methods for Entrepreneurs, as amended;
·	a survey of balances discovered in the Company's accounting as of December 31, 2000 on the accounts of the Company's assets and on the accounts of its liabilities and equity;
·	an evaluation of events that occurred after the financial statements date and that could have an impact on our auditor’s report.
We conducted our audit in accordance with the guidelines issued by the Chamber of Auditors of the Czech Republic, and/or with requirements of international auditing standards ensuing from the responsibility of the Company’s statutory bodies for keeping complete, supportable and correct accounting records, and from the obligation to have data in the financial statements audited on a test basis and using the principles of significance. Accounting documents related to accounting records were audited on a test basis. No extraordinary survey of any assets was necessary.
Based on the results of the applied auditing methods, we did not find out any significant errors or discrepancies with valid laws and regulations. The carried-out audit entitles us reasonably to issue this statement:
In our opinion, the financial statements, in all their essential aspects, present fairly the assets, liabilities, equity and the financial position of Teplárna Kromeríz, a.s., as of December 31, 2000 and its economic results in the accounting period 2000 in accordance with the Act No. 563/1991 Coll., on Accounting, and with respective regulations.
Bystrice pod Hostynem, April 11, 2001
On behalf of Muller - audit spol. s r.o., license No. KACR 140
Ing. Jiri Muller, autitor, decree No. 527, the Executive of the Company

                            TEPLARNA KROMERIZ, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                                     ASSETS

                                                      12/31/2000     12/31/1999
                                                      ------------  -------------

                                                             (CZK 000's)

Total Assets                                               47,696         44,273
                                                      ============  =============

Intangible and Tangible Assets and Investments             32,753         28,973
                                                      ------------  -------------

    Intangible Assets                                           3              6
                                                      ------------  -------------

      Expenses of Foundation and Organization                   3              6
                                                      ------------  -------------

    Tangible Assets                                        32,750         28,967
                                                      ------------  -------------

      Land                                                  1,321          1,321
      Buildings, Halls and Constructions                   14,904         15,228
      Separate Movable Items and Groups of Movable Items    8,908          4,967
      Tangibles in Progress                                 8,779          8,742
      Adjustment to Acquired Property                      (1,162)        (1,291)
                                                      ------------  -------------

Current Assets                                             14,935         15,269
                                                      ------------  -------------

    Short-Term Receivables                                 13,008         13,504
                                                      ------------  -------------

      Trade Receivables                                    11,563         12,313
      Receivables from Taxes and Subsidies                  1,445          1,186
      Other Receivables                                         -              5
                                                      ------------  -------------

    Financial Accounts                                      1,927          1,765
                                                      ------------  -------------

      Cash                                                    621            162
      Bank Accounts                                         1,306          1,560
      Short-Term Financial Assets                               -             43
                                                      ------------  -------------

Other Assets                                                    8             31
                                                      ------------  -------------

    Temporary Accounts of Assets                                8             31
                                                      ------------  -------------

      Prepaid Expenses                                          8             31
                                                      ------------  -------------

                            TEPLARNA KROMERIZ, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                         LIABILITIES AND OWNER'S EQUITY

                                                                        12/31/2000           12/31/1999
                                                                      ----------------   ----------------

                                                                                   (CZK 000's)

Total Capital and Liabilities                                                  47,696            44,273
                                                                      ================   ===============

Capital                                                                        27,711              (542)
                                                                      ----------------   ---------------

    Basic Capital                                                              42,036            17,487
                                                                      ----------------   ---------------

       Basic Capital                                                           42,036            17,487
                                                                      ----------------   ---------------

    Retained Earnings                                                         (18,029)          (12,914)
                                                                      ----------------   ---------------

       Retained Losses of Previous Years                                      (18,029)          (12,914)
                                                                      ----------------   ---------------

    Profit and Loss of Current Accounting Period                                3,704            (5,115)
                                                                      ----------------   ---------------

Liabilities                                                                    19,896            44,734
                                                                      ----------------   ---------------

    Long-Term Liabilities                                                       3,800                 -
                                                                      ----------------   ---------------

       Long-Term Payables to Related Companies (Shareholdings 50%)            3,800                 -
                                                                      ----------------   ---------------

    Short-Term Liabilities                                                     16,096            41,334
                                                                      ----------------   ---------------

       Trade Payables                                                          11,563             9,153
       Payables to Partners and Associations                                    3,937                 -
       Payables to Employees                                                       22                82
       Social Security Payable                                                    430               310
       Taxes Payable                                                              144               115
       Payables to Related Companies (Shareholdings 50%)                          -            31,666
       Other Payables                                                               -                 8
                                                                      ----------------   ---------------

    Bank Loans and Short-Term Notes                                                 -             3,400
                                                                      ----------------   ---------------

       Short-Term Bank Loans                                                        -             3,400
                                                                      ----------------   ---------------

Other Liabilities - Temporary Accounts of Liabilities                              89                81
                                                                      ----------------   ---------------

    Accruals                                                                       71                71
                                                                      ----------------   ---------------

       Accruals                                                                    71                71
                                                                      ----------------   ---------------

    Contingencies - Loss                                                           18                10
                                                                      ----------------   ---------------

                            TEPLARNA KROMERIZ, a.s.
                    FINANCIAL STATEMENTS - INCOME STATEMENT

                                                                         12/31/2000           12/31/1999
                                                                      -----------------   ----------------

                                                                                   (CZK 000's)

Operation (A)                                                                   41,938            44,215
                                                                      -----------------   ---------------

    Revenues from Finished Products and Services                                41,938            44,215
                                                                      -----------------   ---------------

Consumption from Operation (B)                                                  35,140            42,153
                                                                      -----------------   ---------------

    Consumption of Material and Energy                                          32,125            33,836
    Services                                                                     3,015             8,317
                                                                      -----------------   ---------------

Value Added (A)-(B) (+)                                                          6,798             2,062
                                                                      -----------------   ---------------

Personnel Expenses (-)                                                           3,772             4,565
                                                                      -----------------   ---------------
    Wages and Salaries and Earnings of Partners and Coop. Members                2,780             3,381
    Social Insurance and Other Expenses                                            992             1,184
                                                                      -----------------   ---------------
Taxes and Fees (-)                                                                  61             1,128
Amortization of Intangible and Depreciation of Tangibles (-)                       998             1,444
Revenues from Intangible and Tangible Assets and Material Sold (+)                 213                 -
Net Book Value of Intangibles, Tangibles and Material Sold (-)                     275                 -
Reversal of Provisions (+)                                                         129               129
Creation of Provisions (-)                                                       1,041                 -
Other Operational Revenues (+)                                                      38                37
Other Operational Expenses (-)                                                     114               126
                                                                      -----------------   ---------------

Net Operating Results (C)                                                          917            (5,035)
                                                                      -----------------   ---------------

Interest Revenues (+)                                                               12               156
Interest Expenses (-)                                                              348               103
Other Financial Expenses (-)                                                       316               133
                                                                      -----------------   ---------------

Net Result from Financial Activities (D)                                          (652)              (80)
                                                                      -----------------   ---------------

Net Result After Taxes from Normal Activities (C)+(D) = (E)                        265            (5,115)
                                                                      -----------------   ---------------

Extraordinary Revenues (+)                                                       3,438                 -
                                                                      -----------------   ---------------

Net Result from Extraordinary Activities (F)                                     3,438                 -
                                                                      -----------------   ---------------

Net Income (Net Loss) for the Accounting Period (E)+(F)                          3,703            (5,115)
                                                                      =================   ===============

Result of Operations Before Tax                                                  3,703            (5,115)
                                                                      =================   ===============

                            TEPLARNA KROMERIZ, a.s.
                              CASH FLOW STATEMENT

                                                                                  12/31/2000
                                                                               ------------------

                                                                                  (CZK 000's)

Cash and Cash Equivalents at the Beginning of the Accounting Period (P)                    1,765
                                                                               ------------------

Cash Flow from Main (Operational) Activity

Profit/Loss from Normal Activity Before Taxes (A)                                            266
                                                                               ------------------

Adjustments by Non-Cash Transactions (B)                                                     330
                                                                               ------------------

     Depreciation of Fixed Assets                                                            998
     Change in Provisions, Reserves and Change in Prepayments and Accruals                  (942)
     (Profit) Loss from Sale of Fixed Assets                                                 (62)
     Interest Expense                                                                        336
                                                                               ------------------

Net Cash Flow from Operational Activity Before Taxes and Before Changes
     in Working Capital and Extraordinary Items (A) + (B) = (C)                              596
                                                                               ------------------

Change in Working Capital (D)                                                              5,598
                                                                               ------------------

     Change in Receivables from Operational Activities                                     4,364
     Change in Short-Term Payables from Operational Activities                             1,234
                                                                               ------------------

Net Cash Flow from Operational Activity Before Taxes and Extraordinary
     Items (C) + (D) = (E)                                                                 6,194

Interest Paid (F)                                                                           (348)
Interest Received (G)                                                                         12
Revenues and Expenses Related to Extraordinary Items (H)                                   3,438
                                                                               ------------------

Net Cash Flows from Operational Activities (E) + (F) + (G) + (H) = (L)                     9,296
                                                                               ------------------

Cash Flow from Investment Activity

Fixed Asset Acquisition                                                                   (6,168)
Sale of Fixed Assets                                                                         213
Loans to Related Parties                                                                 (27,728)
                                                                               ------------------

Net Cash Flow From Investment Activity (M)                                               (33,683)
                                                                               ------------------

Cash Flow from Financial Activity

Change in Long-Term and Short-Term Liabilities (J)                                             -
Impact of Changes in Equity (K)                                                           24,549
                                                                               ------------------

     Capital and Reserve Fund Increase                                                    24,549
                                                                               ------------------

Net Cash Flow from Financial Activity (J) + (K) = (N)                                     24,549
                                                                               ------------------

Net Increase/Decrease in Cash (L) + (M) + (N) = (O)                                          162
                                                                               ------------------

Cash and Cash Equivalents at the End of the Accounting Period (O) + (P)                    1,927

                                                                               ==================