Bristow Computers, Inc. Route 5, Box 5269 Albany, Kentucky 42602 (606) 387-5884 January 24, 1993 Frank Smith, Jr. Brown's Creek Resort 945 Brown's Creek Road Anywhere, Kentucky 42717 Re: Timberland on Brown's Creek in Bourbon County, Ky. Dear Mr. Smith: Enclosed is the report which you requested on the cruise of your timberland tracts in the Brown's Creek watershed in Bourbon County Kentucky. The timber was cruised using standard point sampling methods in which sample data was collected on randomly selected plot locations. Species, diameter breast high, estimated merchantable height to the nearest 1/2 16 foot log, and estimated tree grade were recorded. A computer formulation of Mesavage and Girard form class 78 Doyle tree scale volume tables was used to calculate volumes. Average volumes per acre were obtained by Basal Area Factor 10 expansion factors. The average volume per acre estimate thus obtained is 4276 board feet plus or minus 482 board feet with a 90% confidence level. Of this total volume about 3221 board feet per acre plus or minus 501 board feet is estimated in trees 16 inches diameter breast high or larger. The enclosed tables break these figures down by species group and log grade. It must be remembered that accuracy of estimation is much lower when applied to smaller samples as used to obtain the individual figures on the enclosed tables. Also there is a much higher margin of error in dollar value estimates than in volume estimates due to large variations in values by species and quality. The species groups used for valuation purposes are: 1 - Black oaks including Red Oak, Black Oak and Scarlet Oak. 2 - White Oak 3 - Chestnut Oak 4 - Hard Maple, White Ash, and Black Walnut 5 - Beech 6 - Yellow Poplar 7 - Hickory All other including Soft Maple, Black Gum, and Buckeye. In tree grading, three quality classes loosely based on U. S. Forest Service standard tree grading rules were used. Grade 1 includes high quality sawlogs. Grade 2 includes good quality sawlogs, and grade 3 includes all other merchantable logs. In consideration of your desire not to cut all the salable timber on the tract to leave trees for a future harvest and to minimize the aesthetic impact of timber harvesting I analyzed the data in terms of minimum sized trees which should be cut. This analysis suggests that your goals can best be met by harvesting all trees 16 inches diameter breast high and over. This would lead to a minimum stump diameter of around 18 or 19 inches. Based on harvesting timber on 200 acres, (the 128 acre tract plus the 40 acres where the house is and the 40 acres behind the resort) the following figures will give you some perspective on this type of harvest: # of trees cut/ bd. feet harvested/dollar value all salable trees 7720 855,260 $78,661 16" and above 3760 662,430 $72,477 17" and above 2880 567,740 $65,629 As we discussed earlier, I can handle the timber sale if you wish. If we go this route I would advertise the timber, award the sale either by sealed bid, negotiated bid, or logging contract, prepare the sales contract and get it signed, supervise the logging to see that the sales contract is followed, collect the proceeds of the sale and forward them to you, and recommend future timber management needed at the conclusion of the sale. My fee for this would be 10% of the proceeds from the sale. When you have paid the enclosed timber cruising bill that amount would be deducted from my 10% fee at the conclusion of the sale. If you have questions about this report, or if I can be of further assistance, please feel free to contact me. Sincerely, ___________________ Duane Bristow Consulting Forester Bristow Computers, Inc. Route 5, Box 5269 Albany, Kentucky 42602 (606) 387-5884 January 24, 1993 Timber Cruise Report on a timber tract for Frank Smith, Jr. Location: In the watershed of Brown's Creek East of Highway # 71 near the Tennessee State line in Bourbon County Kentucky. Cruised for: Frank Smith, Jr. 945 Brown's Creek Road Anywhere, Kentucky 42717 Cruised by: Duane Bristow, Consulting Forester Dates Cruised: December 22, 1992, January 1 and 16, 1993 Area: Approximately 168 acres of timberland between Cherry Tree Ridge and Brown's creek and approximately 40 acres just south of Brown's Creek Resort. Soils and topography: Generally medium loam soils in coves and lower slopes. Ridges are generally broad with good water retention. Logging would not be difficult due to old roads on the ridges although the slopes are generally very steep requiring winching logs up in many cases. The following standing timber value estimates are based on a logging cost of $110.00 per 1000 board feet of timber harvested with a 10% value deduction for the risk factor associated with valuation of standing trees as opposed to sawlog valuation. Most of the sawtimber present falls into the 14 to 22 inch dbh size classes. (dbh means diameter breast high or 4 1/2 feet above the ground.) Grade 3 Grade 2 Grade 1 Total Black Oaks Mbf doyle scale 47.63 63.90 58.32 169.84 Value $ 2,786 8,051 17,844 28,682 $/mbf 58.50 126.00 306.00 168.87 White Oak Mbf doyle scale 24.60 40.36 24.23 89.20 Value $ 1,439 5,994 6,325 13,759 $/mbf 58.50 148.50 261.00 154.24 Chestnut Oak Mbf doyle scale 41.41 50.63 19.14 111.18 Value $ 1,491 6,379 4,134 12,004 $/mbf 36.00 126.00 216.00 107.97 Hard Maple, White Ash, Black Walnut Mbf doyle scale 34.89 22.14 6.94 63.97 Value $ 1,256 2,790 1,812 5,858 $/mbf 36.00 126.00 261.00 91.57 Beech Mbf doyle scale 59.00 58.14 56.35 173.49 Value $ 1,062 2,093 3,550 6,705 $/mbf 18.00 36.00 63.00 38.65 Yellow Poplar Mbf doyle scale 24.10 27.79 20.98 72.88 Value $ 868 2,876 3,116 6,860 $/mbf 36.00 103.50 148.50 94.13 Hickory Mbf doyle scale 70.70 41.70 19.30 131.70 Value $ 636 1,501 1,564 3,701 $/mbf 9.00 36.00 81.00 28.10 Other Hardwoods Mbf doyle scale 25.22 8.86 8.92 42.99 Value $ 454 319 321 1,094 $/mbf 18.00 36.00 36.00 25.44 Total all species Mbf doyle scale 327.56 313.52 214.18 855.26 Value $ 9,993 30,003 38,666 78,661 $/mbf 30.51 95.70 180.53 91.97 Discussion: As mentioned, about 3221 board feet per acre of the above 4276 estimated board feet per acre is in trees 16 inches in diameter breast high and above. These larger trees also contain the highest value logs. Over 90% of the value of the stand is thus in about 50% of the trees and it is recommended that only these trees be harvested at this time. Averages in trees 10 in. dbh and above: # trees/acre 38.6 Basal area/acre 56.9 sq. ft. Vol./tree 111 bd. ft. doyle scale Vol./acre 4,276 bd. ft. doyle scale Bristow Computers, Inc. Route 5, Box 5269 Albany, Kentucky 42602 (606) 387-5884 January 24, 1993 Timber Cruise Report on a timber tract for Frank Smith, Jr. Location: In the watershed of Brown's Creek East of Highway # 71 near the Tennessee State line in Bourbon County Kentucky. Cruised for: Frank Smith, Jr. 945 Brown's Creek Road Anywhere, Kentucky 42717 Cruised by: Duane Bristow, Consulting Forester Dates Cruised: December 22, 1992, January 1 and 16, 1993 Area: Approximately 168 acres of timberland between Cherry Tree Ridge and Brown's creek and approximately 40 acres just south of Hendricks Creek Resort. Soils and topography: Generally medium loam soils in coves and lower slopes. Ridges are generally broad with good water retention. Logging would not be difficult due to old roads on the ridges although the slopes are generally very steep requiring winching logs up in many cases. Estimated volumes Doyle scale of trees 16 inches dbh and above. (dbh means diameter breast high or 4 1/2 feet above the ground.) thousand board feet Grade 3 Grade 2 Grade 1 Total Black Oaks 27.80 63.03 59.56 150.39 White Oak 13.33 37.00 24.75 75.08 Chestnut Oak 21.86 45.33 19.55 86.74 Hard Maple, etc. 6.43 20.47 7.09 33.99 Beech 34.54 54.68 57.55 146.77 Yellow Poplar 6.92 28.38 21.43 56.73 Hickory 29.24 38.19 19.71 87.14 Other 9.58 6.90 9.11 25.59 Total 149.70 293.99 218.74 662.43 Averages in trees 16 in. dbh and above: # trees/acre 18.8 Vol./tree 176 bd. ft. doyle scale Vol./acre 3,221 bd. ft. doyle scale Contract for Selling Timber This contract entered into this _____ day of __________, 1993, by and between _______________________________________________ of ______________________________, hereinafter called the owner and Duane Bristow, Consulting Forester, of Albany, Kentucky hereinafter called the Consultant, WITNESSETH: 1. The owner owns approximately 470 acres of timberland located in Bourbon County Kentucky in the watershed of Brown's Creek and desires to sell a part of the salable timber from this timberland. 2. The consultant being experienced in timber sales agrees to conduct the timber sale for the owner including advertising the timber sale, negotiating with possible buyers and contract loggers, developing a timber sale contract suitable to both the owner and the eventual buyer or buyers or contract logger, supervising the timber harvest operation to see that the contract is followed and collecting monies paid for the timber to be forwarded to the owner and to make recommendations for future management of the timber tract after harvesting is completed. 3. The owner agrees that for this service the consultant is to be paid 10% of all proceeds of the sale as they are collected for the owner. $1160 is to be deducted from this 10% fee to be paid the consultant on the completion of the sale. This $1160 is to be a refund to the owner for a timber cruising fee already paid to the consultant. 4. The owner guarantees title to said timber and to defend it against any and all claims and to mark the boundaries of the timberland with paint or designate them by other suitable means before any timber is harvested. Contract for Selling Timber (continued) 5. The consultant agrees to sell the timber as soon as practical and to keep the owner informed of progress during the sale negotiation and the timber harvest. IN WITNESS THEREOF: the parties hereto have hereunto signed their names. ___________________________________ _________________ Owner(s) Date Notary: Subscribed and sworn to be me, _______________________ this _________ day of _________________, 1993. _____________________ Notary Public My Commission expires ___________________________________ ___________________________________ _________________ Duane Bristow, Consultant Date Notary: Subscribed and sworn to be me, _______________________ this _________ day of _________________, 1993. _____________________ Notary Public My Commission expires ___________________________________ Bristow Computers, Inc. Route 5, Box 5269 Albany, Kentucky 42602 (606) 387-5884 June 21, 1994 John Doe & Sons P. O. Box xxx Albany, Kentucky 42602 Re: Timberland near Knoxville, Tennessee. Gentlemen: Enclosed is the report on the cruise of your timber recently completed near Knoxville in Buckner County, Tennessee. The 4,700 acres of timberland was cruised using standard point sampling methods in which sample data was collected on randomly selected plot locations. Species, diameter breast high, estimated merchantable height to the nearest 1/2 16 foot log, and estimated tree grade were recorded. A computer formulation of Mesavage and Girard form class 78 Doyle tree scale volume tables was used to calculate volumes. Average volumes per acre were obtained by Basal Area Factor 20 expansion factors. The average volume per acre estimate thus obtained is 1721 board feet plus or minus 259 board feet with a 90% confidence level. Of this total volume about 895 board feet per acre plus or minus 185 board feet is estimated in trees in the 16 inch diameter class and larger. The enclosed tables break these figures down by species group and log grade. It must be remembered that accuracy of estimation is much lower when applied to smaller samples as used to obtain the individual figures on the enclosed tables. Also there is a much higher margin of error in dollar value estimates than in volume estimates due to large variations in values by species and quality. The species groups used for valuation purposes are: 1 - Red oak including Northern Red Oak and Black Oak. 2 - White oak including White Oak and Chestnut Oak. 3 - Yellow Poplar. 4 - Hard Maple, White Ash, and Black Walnut. 5 - Hemlock 6 - Shortleaf Pine 7 - Virginia Pine. All other including Soft Maple, Black Gum, Birch, Beech, Scarlet Oak, Cucumber, Hickory, and Buckeye. In tree grading, three quality classes loosely based on U. S. Forest Service standard tree grading rules were used. Grade 1 includes high quality sawlogs. Grade 2 includes good quality sawlogs, and grade 3 includes all other merchantable logs. The topography of the area consists of generally moderate to steep slopes on a generally south facing mountainside but the land is so broken by deep ravines running both North-South and curving to the East-West direction that all aspects are present with even some North facing slopes. In some cases the spur ridges are separated from ravines by high cliffs and in others only by moderate to very steep slopes. Access is provided by a gravel road along the top of the mountain, down the side of the mountain within the tract and along the bottom of the mountain. Old logging roads and skid trails from the mid 1940's and newer oil exploration roads are present throughout the tract and timber accessiblity is variable but possible in almost all areas with the possible exception of some deep ravines below cliffs. The cruise involved measurements on 179 plots scattered throughout the tract with approximately one plot on every 25 acres. These plots indicate that about 175 acres is in non timberland uses, principally strip mined areas, 775 acres is in coves and lower slopes with generally deep moist soil and good to excellent timber growing potential, 900 acres is in dry ridges and upper slopes with shallow rocky soil and generally less than desirable timber growth potential and about 2650 acres is in mid slope areas with well drained shallow to moderate soil and average to below average timber growth potential. These figures do not add to exactly the acreage in your tract due to rounding off of figures and due to the tendency not to locate plots near the boundaries of the tract. The acreage figures above are, of course, not exact but are rough estimates. Timber size and quality is generally low as reflected in the accompanying tables. A good timber sale in this area is generally considered to require over 2,000 board feet per acre of trees with an average of over 150 board feet per tree. Timber volumes per acre vary from zero to over 10,000 board feet doyle scale with the following distribution in timbered areas: board ft. per acre number of acres less than 1000 1900 1001 to 2000 975 2001 to 3000 550 3001 to 4000 400 4001 to 5000 200 over 5000 350 However, only 575 acres have over 2,000 board feet per acre in trees 15 inches dbh and above and these average 128 board feet per tree. It is estimated that these acres contain around 2 million board feet in this size timber. Much of the area on the Southwest part of the tract has suffered from severe and repeated forest fire damage over the years and several areas were found in which extensive timber harvesting during the last 10 to 15 years was evident with some harvesting occurring much more recently. Most of the areas with higher volumes of timber per acre occurred on the Eastern 2/3 of the tract. It is doubtful if a sawtimber market can be found for the trees in the 12 and 14 inch dbh size classes due to the poor accessiblity and poor timber quality. However, a good pulpwood market, particularly for hardwood pulpwood is available in Pine Knot, Kentucky which is about 15 to 20 miles to the North. Pulpwood volume estimates are given. Pulpwood stumpage in the area runs about $5 per cord for hardwood and about $7.50 per cord for pine. Dbh means diameter breast high or 4 1/2 feet above the ground. dbh sawtimber number pulpwood dollar bd. ft. Doyle of standard value scale trees cords hardwood 6 to 11 inches - 230,400 19,663 $ 98,315 11 to 15 inches 4,086,800 88,200 22,275 111,375 pine 6 to 11 inches - 66,600 5,945 44,588 11 to 15 inches 934,780 20,250 4,722 35,415 pine and hardwood 15 inches and up 4,029,190 31,500 - 255,591 Total 4,029,190 436,950 52,605 545,284 Estimated volumes Doyle scale of trees 15 inches dbh and above. (dbh means diameter breast high or 4 1/2 feet above the ground.) thousand board feet Grade 3 Grade 2 Grade 1 Total Red Oak 453.11 290.93 120.06 864.10 White Oak 362.16 145.01 30.76 537.92 Yellow Poplar 273.52 124.55 31.57 429.65 Other Hardwoods 744.05 29.75 0.00 773.80 Total 1,832.85 590.24 182.39 2,605.48 Hemlock - 996.08 - 996.08 Shortleaf Pine - 278.88 - 278.88 Virginia Pine - 148.75 - 148.75 Total 1,423.71 1,423.71 Averages in trees 15 in. dbh and above: Vol./tree 118 bd. ft. doyle scale hardwoods Vol./tree 151 bd. ft. doyle scale hemlock & pine The average sawtimber stumpage value is estimated at $63.43 per mbf. This was calculated using a logging cost of $140 per mbf and prices paid for logs delivered at local markets by species group and log grade. Although the Red Oak, White Oak, and Yellow Poplar groups are in strong demand and there is a market for pines, the demand is low for other hardwoods and hemlock can generally be sold only as a specialty product for such uses as log home construction. Almost 25% of the total volume of trees 15 inches dbh and above on the area is in hemlock. This may be because very little hemlock has been harvested in past logging due to lack of markets. Total timber value is estimated at $300,000 to $350,000 stumpage due to the scattered small areas which have harvestable volumes and quality. This is $125,000 for sawtimber plus $200,000 for pulpwood. If you have questions about this report please feel free to contact me. Sincerely, ___________________ Duane Bristow Consulting Forester