Friedman, Billings, Ramsey & Co. Inc. initiated coverage ofHS Resources with a “buy” rating and a 12-month price target of $30based on expectations for strong summer gas prices. In a 16-pageresearch report, FBR senior research analyst David Khani identifiedHS as the dominant oil and gas producer in the Denver-Julesberg(D-J) Basin.

“Given the company’s leverage in the natural gas market and thedouble- digit growth potential of its Gulf Coast program, webelieve HS Resources represents a strong value relative to its peergroup,” Khani said. “HS Resources is well positioned to takeadvantage of the recent rise in natural gas prices, which islargely due to the anticipation of a summer price rally and thediscrepancy between oil and gas prices.” According to Khani’s March2000 report, “The Boom in the Natural Gas Market ? – Fact orFiction,” gas prices are expected to exhibit a near-term spike dueto peak electricity demand during the summer but will return tostability in the long-term.

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