Business Commentary:

During the first quarter of 2008, the company undertook a number of initiatives in its transformation from a development based company to a sustainable operating company.

These initiatives include the following:

Huckabay Ridge improvements complete and facility is reliably producing the company’s RNG product.

Closed on $5.0 million of convertible notes, and are seeking additional financing.

Hired Marathon Capital, LLC, is to assist us in identifying and managing discussions with entities interested in investing in the company’s projects.

Aggressively pursued the availability of funds under the federal stimulus package and other federal programs.

Actively seeking legislation to create tax-credits for the production of renewable natural gas from waste products.

Evaluating options to reduce the company’s project capital costs and improve project returns.

Reduced G&A costs by 25% and maintain reductions for 2009.

Signed 10 year RNG sales agreement with Xcel Energy in Colorado for 915,000 MMBtus/yr at a price reflecting the green attributes of the company’s RNG product.

Entered into a new technology agreement with Xergi/DBT better reflecting EPG’s build/own/operate business model.

Upon closing of Xergi agreement, Xergi will acquire $3 million of EPG’s 14% convertible notes.

Financial Results:

The company had a net loss applicable to common shareholders of $3.3 million, or loss per common share of $0.21, for the quarter ended March 31, 2009, as compared to a net income applicable to common shareholders of $2.8 million, or basic income per common share of $0.18 for the quarter ended March 31, 2008.

The results first quarter of 2008 include net income of $7.0 million from discontinued operations which were disposed of during this period. For comparative purposes an analysis from continuing operations is discussed below.

The net loss from continuing operations was $2.9 million for the first quarter of 2009 as compared to a loss of $3.8 million first quarter of 2008. The reduction in net loss for 2009 of $.9 million is mainly due to a reduction in general and administrative expenses in 2009 as a result of management’s cost reduction program and reduced operating expenses at the company’s Huckabay Ridge facility.

Revenues:

Revenues for the first quarter of 2009 declined to $.7 million from $.9 million in the first three months of 2008. The primary reason for the decline in revenues was a reduction in the amount of greenhouse gas sequestration credits in the first quarter of 2009 when compared to first quarter of 2008. In the first quarter of 2008 the company received cash payment for vintage years 2005 through 2007 but in the first quarter of 2009 only recognized sales associated with a six month period in 2008.

Though the company continues to generate carbon credits through its normal operations, it only recognizes carbon credit sales revenue when the cash is received.

Operations and maintenance expenses:

These expenses declined by $0.3 million in the first quarter of 2009 to $1.0 million from $1.3 million for the first quarter of 2008. The reduction in expenses principally reflects lower operating expenses at Huckabay Ridge.

General and administrative expenses:

General and administrative expenses were $2.1 million for the first quarter of 2009, as compared to $3.3 million first quarter of 2008, a reduction of $1.2 million. This reduction reflects lower salary expenses as a result of the company’s cost reduction program, lower non-cash compensation expenses in 2009 and reduced development expenses in 2009 as the company slowed development efforts to conserve cash pending the company’s fundraising initiatives. Excluding the decline in non-cash compensation expenses, general and administrative expenses declined to $2.0 million in the first quarter of 2009 as compared to $3.0 million for the first quarter of 2008, a decline of $1.0 million.

Depreciation and amortization expenses:

For the first three months of 2009 depreciation and amortization expense was $.4 million as compared to $.3 million for the first three months of 2008. The increase in depreciation is due to the fact that in the 2009 period there was a full quarter of depreciation expense for the Huckabay Ridge facility, as compared to the first quarter of 2008, in which The companystarted recognizing such expense after the Huckabay Ridge facility was put into commercial service in February 2008.

Operating loss:

As a result of the factors described above the operating loss from continuing operations during the first quarter of 2009 was $2.8 million as compared to an operating loss of $3.9 million for the first quarter of 2008.

Interest income:

Interest income declined to $.02 million in the first three months of 2009, as compared to $.2 million in the first three months of 2008. Interest income declined due both to lower invested cash balances and lower interest rates on such balances.

Interest expense:

Interest expense is increased by $.1 million to $0.3 million for the first three months of 2009, as compared to $0.2 million for the first three months of 2008. The increase in interest expense is due to the fact that in the 2009 period there was a full quarter of interest expense recognized in respect of the Huckabay Ridge facility, as compared to the first quarter of 2008, in which the company started recognizing such expense after the Huckabay Ridge facility was put into commercial service in February 2008. Prior to that time, the company was capitalizing interest expense associated with the facility.

Other income (loss):

Other income for the first quarter of 2009 consists of income of $130,000 to reflect a decline in the fair value of certain outstanding warrants due to the adoption of EITF 07-05 as of January 1, 2009.