Section 323 Intangible Drilling Costs

Section 323 Intangible Drilling Costs. For federal income tax purposes, all intangible drilling and development costs incurred by Raser, IRP or the Company before the Effective Date (other than those intangible drilling and development costs incurred during 2007) have been or will be capitalized by Raser pursuant to Code Section 59(e) and an election was or will be made to amortize the costs over a 60-month period. None of Raser, IRP or the Company has elected or will elect to expense any such costs for such tax purposes.