Petroleum Development Corp. of Bridgeport, WV, said it haslocked in November to March prices at an average of about$2.95/MMBtu based on NYMEX futures quotes that have reached “thehighest average price we’ve seen for any winter in the past 10years.”

“These are very attractive prices,” said Tom Riley, president ofRiley Natural Gas, PDC’s natural gas marketing subsidiary. “We usedNYMEX futures contracts to lock in a solid base price for thecoming winter.” The $2.95 average represents a 58% increase overthe $1.87 NYMEX closing average for the same months in the winter1998-99. The NYMEX Henry Hub price will be augmented by basisnegotiated monthly for deliveries into CNG Transmission and theMichCon system.

Riley, who markets gas for Petroleum Development and otherproducers, said he had hedged about two-thirds of currentproduction. The company also expects to have additional suppliescoming on in the fall from a drilling program. “We’re pretty activein drilling right now.” He said PDC and several partners had spentabout $40 million on drilling in 1998 and expected to spend aboutthe same this year.

Riley said PDC has become increasingly more aggressive over thepast few years in locking in prices. The company markets about 900MMcf/month, about 30% of which is its own gas.

Ellen Beswick

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