In order to compete more effectively for larger acquisitions that would expand and diversify its asset base and provide an alternative private equity focus for institutions, Black Stone raised its first institutionally supported fund, Black Stone Natural Resources I (“Fund I”), in 2002. Black Stone and its affiliates serve as both the General Partner as well as the largest Limited Partner making a total commitment of $66 million. With commitments totaling $150 million, the fund was fully deployed through 2004 in three transactions; Ocean Energy, Toreador Resources, and Pure Resources. Because the Pure or “Ivory” acquisition exceeded the commitments and investment parameters of Fund I, a portion of this acquisition was placed in a second institutionally supported Fund, Black Stone Natural Resources II and a third special purpose vehicle Ivory Acquisitions Partners. Fund I has generated superior returns.

Having fully invested Fund I, Black Stone raised its second institutionally supported fund, Black Stone Natural Resources II (“Fund II”), holding a final close in September 2004 with total commitments of $328 million. Again, Black Stone and its affiliates serve as the General Partner and the largest Limited Partner with commitments totaling $82 million. The first transaction in the fund as indicated above was a portion of the Pure transaction. As of December 2007, the fund was fully committed having made 13 acquisitions totaling $316 million. Fund II includes fee mineral acquisitions, overriding royalty interests, term royalties and non-operated working interests.

In December 2007, Black Stone caused the initial closing of its third fund to facilitate the acquisition of a diversified non-operated working interest package. We expect to hold a final close with commitments totaling $400 million in March or April. Black Stone will represent not less than 40% of the fund or $160 million in commitments. The investment mandate for Fund III is slightly broader than our previous funds allowing for investment in other natural resources.