Cap Rock Energy Corporation

Cap Rock Energy (formerly Cap Rock Cooperative) was established in 1939 to provide electric service to rural customers in West Texas. They currently serve over 34,000 customers (meters) in 31 counties in Texas, manage a municipal electric utility, and operate a 10,400-member electric cooperative. The Company currently has 92 full-time employees and operates from its 50,000-square-foot home office in Midland, Texas. Historically, the Company has been involved in many areas of the electric utility industry. This has included the transmission, distribution, and sale of electricity purchased from electric generating companies under long-term contracts. The future focus will be primarily on distribution in larger markets.

The $210 billion electric utility industry is undergoing a regulatory

transition. Cap Rock has an opportunity to transform itself from a cooperative

structure with capital limitations to a more dynamic electrical distribution

stock company. This would provide the ability to expand its customer base

by acquiring small to medium-sized electric distribution companies with

growth opportunities, and smaller telecommunications companies. Growth

through acquisition will provide significant benefit to Cap Rock in a

deregulated market. For example, the Company plans to cross-sell services

across various lines of service, including telephone and wireless customers,

to mitigate the cyclical nature of the electric distribution business.

The Company has applied for listing of its shares on the American Stock