Houston Exploration Co. said Monday it has hedged an additional 70,000 MMBtu/d of natural gas production for 2003, bringing its total gas production hedged for the year to 335,000 MMBtu/d.

New natural gas hedges have been contracted totaling 30,000 MMBtu/d at an average floor price of $3.60 and ceiling of $5/MMBtu for the first quarter of 2003, and 40,000 MMBtu/d at an average floor of $3.51 and ceiling of $4.71/MMBtu for the second through fourth quarters, the independent producer said. All of the new natural gas hedges are in the form of costless collars. A total of 1,000 Bbls/d of crude oil production was hedged at a swap price of $28.50 per Bbls for the first quarter of 2003, it noted.

With the addition of the new 2003 hedges, Houston Exploration said its total hedged volumes for the first quarter of 2003 were now 185,000 MMBtu/d of natural gas production with an average floor of $3.43 and an average ceiling of $4.57 per MMBtu, and 1,000 Bbls/d of crude oil at the $28.50 per Bbl swap price. For the second through fourth quarters of 2003, total natural gas production of 150,000 MMBtu/d has been hedged at an average floor of $3.39 and an average ceiling of $4.43 per MMBtu.

Houston Exploration said its hedging strategy is part of its corporate risk management program and is used to achieve more predictable cash flows.

Houston Exploration is an independent energy company engaged in onshore and offshore exploration, development and production of domestic natural gas and oil properties. Its offshore operations are focused in the shallow waters of the Gulf of Mexico, while its onshore activities are concentrated in South Texas and the Arkoma Basin with additional onshore production located in East Texas, South Louisiana and West Virginia.

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