Fitch Ratings assigned a AA- rating on $240 million in gas revenue bonds issued by Natural Gas Acquisition Corp. to pay Merrill Lynch Commodities for a 15-year supply of natural gas to serve the City of Clarksville, TN, and Humpherys County Utility District of Humpherys County, TN. Fitch said the rating is based on the transaction’s structure, which includes a corporate guarantee, insurance policies, operating reserves, and certain legal provisions. These factors secure the revenue streams and other funds that pay debt service on the bonds, and under certain circumstances, the full redemption price. The gas volumes represent a portion of the forecasted needs of the two gas distribution utilities. In addition to securing a gas supplier and gas supply for 15 years, the transaction benefits the customers by locking in natural gas costs at a discount to the regional market index price. Under separate gas supply contracts, NGAC will sell a predetermined amount of natural gas to the customers, who are both obligated to take-and-pay for gas as long as it is delivered. The price of the natural gas sold to Clarksville and Humphreys is structured to generate revenues sufficient to pay debt service on the bonds. Bondholders have a security interest in the payments from the customers to NGAC and in the scheduled natural gas from Merrill Lynch Commodities. A Merrill Lynch corporate guarantee secures performance by MLCI, including the delivery of gas.

Penn Virginia Corp. has closed its acquisition of privately held producer Crow Creek Holding Corp. in a cash transaction for $71.5 million. Crow Creek’s operations are primarily in the Oklahoma portions of the Arkoma and Anadarko Basins. Penn Virginia estimates that as of April 1 Crow Creek had total net proved reserves of about 42.7 Bcfe, 85% of it natural gas. About 61% of the proved reserves are proved developed. Penn Virginia believes the acquired properties contain 38 Bcfe of risked probable and possible reserves. Current daily net production is 6.2 MMcfe. Company production is expected to increase by 1.0-1.2 Bcfe for the remainder of 2006. Crow Creek has interests in 482 proved developed producing wells, of which 110 wells are company-operated, with an approximate average working interest of 69%.

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