Rocky Mountain Energy Corp (fka RMEC)

[jmhollen]

Rocky Mountain Energy Corporation ........................

Shareholder Update .....

We at RMEC wish to take this opportunity to wish you and yours a joyous holiday season. This will be our last communication prior to December 31, 2002 so please have a safe and joyous holiday season.

Houston, Texas - December 23, 2002 - Form 10KSB: Our year-end is September 30th. Our Form 10KSB (year end report) will be out per the applicable statutory period (by January 14th). The report only covers our initial start-up period, as we went public on May 29, 2002. Thus, this covers 122 days of operation during our start-up phase. Per our earlier press releases, during this period we dealt with the Marathon "credit line" matter and other start-up problems. There will not be much in the way of numbers to report; however, the "Subsequent Events" section will contain the details of our recent acquisitions and future prospects for the company.

Our business plan has always been to purchase oil and gas proven reserves and develop them to maximum cash flow. To that end, we have closed on the U.S. Oil Co. properties in Sweetwater, Weston and Crook Counties, Wyoming. These properties are producing current income sufficient to cover overhead, but need to be developed as they are mostly proved undeveloped reserves. The Raton Basin field in Trinidad is proved undeveloped. We need to begin development and have taken steps to do so. The above fields comprise approximately 250 billion cubic feet of gas in the ground. The upside potential upon development is quite attractive.

The acquisitions that will have the most immediate effect on our share value are those already producing current cash flow. To that end we are in various stages of negotiations with companies who are selling their high cash flowing fields. One of these, in the documentation stage, is currently producing 15,000 mcfpd (very nice), and is located in Campbell County, Wyoming near our current Weston and Crook County properties. Our plan has always been to mix current cash flowing properties with non-producing proved properties to provide the maximum value of current cash flow and earnings, with immense upside potential to fuel earnings growth from within the company's asset base. Our long-term prospects look quite attractive, as a result of our rapidly growing asset base.

We hope to have news soon on revenues from our properties. The large acreage positions which we acquire are geared to our operating philosophy, which is to be as self-contained as possible. In other words, where a company would call out third party vendors to service wells (daily or routine maintenance) or drill the wells, we will be as self-sufficient as practical. This takes the form of us owning our own pulling units, bulldozers and road maintainers, tank trucks, water trucks, drilling unit (shallow wells) and cement truck in each core area. This philosophy saves over 60% of capital costs and regular lease operating expenses, which savings then go straight to the bottom line and will be reflected in shareholder value. You will note that our acquisitions (large acreage positions calling for numerous proved undeveloped wells to be drilled) and future acquisitions (located near current holdings) lend itself to this operational style. Lest anyone give me credit for a novel idea, I wish to give credit for the successful business model to Evergreen Resources, Inc. (NYSE: EVG), which has been producing and operating in this fashion with great success. Ergo, if it works "why try to fix what isn't broke?" I am happy to let them take credit for the idea and thus add to our success.

Why Gas?
You will note that most of our reserves are gas. Why do we concentrate on gas? First, the overall price deck through 2005 is very high. You can lock $4.00 gas prices on the MERC (Henry Hub) at present for twelve months. Second, we do not import gas. Oil is imported. The current Mid-East situation is keeping the oil price high. I remember Desert Storm. The minute the war started and we took control of the oil fields, prices fell by $10 per barrel. Nothing in the current situation convinces me that oil prices will not fall once the US takes control here. Hence, we will build on long- term stable gas prices, not bet our future on the huge variations that oil can produce.

Comments: The above business plan is where our efforts are concentrated. In addition, my duty is to insure that the widest possible audience hears our story. To that end we are about to kick off a substantial investor awareness program. Other things are also underway, but more cannot be said at this time. We have recently received many shareholder inquiries regarding the volatility in our stock. While we do not control the price of the stock or the financial markets, as a long-term shareholder who has never sold any stock in the company, I share your concerns about certain false allegations that appear on the message boards. However, I would rather take the time to focus on the business rather than engage in responding to those parties who are attempting to act against the interests of our shareholders

Conclusion
In order that our employees may enjoy the holidays we will be on half-days December 24, 27 and 31. Our normal schedule resumes January 2, 2003. I will not be answering e-mail from December 24th through January 1, 2002, although I plan to visit the Raton Basin between the holidays.

It is at this time of year that we count our blessings looking back at the previous months. You are certainly counted among our blessings and your support is greatly appreciated. We wish you all a very joyous holiday.

About Rocky Mountain Energy Corporation
Rocky Mountain Energy Corporation, based in Houston, is an emerging developer of proven oil and natural gas reserves with assets in the resource-rich area of the Rocky Mountains. Rocky Mountain Energy's diversified production mix allows us the opportunity of cash flow with predictable production. Rocky Mountain Energy's strategy includes a property mix of producing and non- producing assets. The producing properties provide immediate net income and cash flow while non- producing assets will provide Rocky Mountain Energy with future development opportunities and, ultimately, reserves at a reduced cost. With a management team that has over 100+ years in the oil and gas industry, Rocky Mountain Energy knows how to increase production, expand profit margins and maximize field potential. Its team of highly qualified technical professionals can examine old wells and find indications of producing zones that have never been produced, as well as develop the known proved undeveloped reserves which are the basis of any acquisition.

Company Website: http://www.rockymountain.cc

Rocky Mountain Energy Corporation
John Ehrman
President / CEO
email: [e-mail]
voice: 281 448-6500

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