**EXHIBIT 10.24b**

May 16, 2007

RockyMountain Gas, Inc.Attn:Mr. John Reader 500 4th Avenue, S.W., Suite 2600 Calgary, Alberta T2P2V6  CANADA

Re: RockyMountain Gas, Inc. (“RMG”) v. PRB Energy, Inc. (“PRB”) 

DearJohn:

In furtherance of the terms and conditions contained inthe May 15, 2007 letter agreement between RMG and PRB settling and compromisingall issues in dispute between the parties in the above-referenced arbitration(the “Letter Agreement”), the parties agree as follows:

If RMG is not able to obtain the consent of its lenders by June1, 2007, as contemplated in the Letter Agreement, PRB will immediatelythereafter deliver the fully executed assignments identified in Paragraph 1 ofthe Letter Agreement to an independent third party escrow agent pursuant to amutually agreeable escrow agreement to be agreed upon by the parties no laterthan May 31, 2007. The escrow agent will be instructed by the parties to hold theassignments in escrow until notification of the earlier of (i) payment in fullof the promissory note, at which time the escrow agent will immediately deliverthe assignments to RMG, or (ii) RMG’s failure to cure a noticed default withinthe time specified therein, in which case the escrow agent will be notified byPRB of its election of remedies as set forth below. Subject to the terms of the escrowagreement, it is the parties’ intent that the escrow agent have the authority to receive allpapers necessary to deliver the assignments to RMG and that such anunderstanding creates a valid escrow effecting a completed transfer between PRB and RMGof the assignments.

In the event of a default under the promissory note, PRB shallgive written notice of such default to RMG, and RMG shall have three business days tocure such default. In the event such default is not cured within the time specified,PRB may, in its sole discretion, without repayment of any amounts paid by RMGunder the promissory note, and without reassigning interests assigned to PRBunder the Letter Agreement, give notice to the escrow agent and to RMG of itselection to either (i) instruct the escrow agent of its election to have theassignments immediately returned to PRB and upon receipt thereof PRB willimmediately deliver the promissory note to RMG, in which case RMG shall immediatelyresign and approve of PRB as operator of such interests, and shall have noright to revenues attributed to the interests described in the assignments forperiods after delivery by the escrow agent of the assignments to PRB, or (ii)sue on the balance due on the promissory note, in which case RMG shall remainas operator of such interests and PRB 

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shallinstruct the escrow agent to immediately deliver the assignments to RMG.   This election of remedies, which shall bemade no later than fifteen days after any failure to cure a noticeddefault, shall be binding once made.

During the period from June 1, 2007 until the assignmentsare delivered by the escrow agent to either RMG or PRB pursuant to the termsset forth above (the “Interim Period”), RMG shall operate the propertiesidentified in the assignments to it identified in the Letter Agreement (the “AssignedProperties”) according to the Joint Operating Agreement dated August 1, 2005 (“JOA”),except that with respect to the Assigned Properties: (i) RMG shall timely payall of PRB’s share of capital costs and expenses under the JOA incurred duringthe Interim Period; (ii) PRB shall have no liability for capital costs andexpenses under the JOA incurred during the Interim Period; (iii) RMG shall indemnifyPRB for any costs, expenses, or losses under the JOA incurred during theInterim Period; and (iv) RMG shall be entitled to PRB’s share of revenue earnedunder theJOA during the Interim Period.

If RMG agrees to the proposed terms set forthherein, please execute this agreement in the space provided below and return it to me.
|                                                                                                | Sincerely,          |
|-----------------------------------------------------------------------------------------------------|---------------------|
|                                                                                                |                |
|                                                                                                | PRB Energy, Inc.    |
|                                                                                                |                |
|                                                                                                | By:                 | /s/ Robert W.  Wright |   |
|                                                                                                |                |      Robert Wright |
|                                                                                                |                |      Chief Executive Officer |
|                                                                                                |                |   |
| **ACCEPTED AND AGREED**                                                                             |                |
| ** **                                                                                          |                |
| **May 15, 2007** Rocky Mountain                                                                     |                |
| ** **                                                                                          |                |
| Gas, Inc.                                                                                           |                |
|                                                                                                |                |
| By:                                                                                                 | /s/ John F.  Reader |   |   |
|              John  F. Reader       |                |
|              Senior Vice President |                |
|                                                                                                     |                     |  |  |  |  |

 

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