Committing

The Houston Exploration Co., headquartered in Houston, announced new hedges for 2003, committing 40,000 MMBtu/d of the company’s 2003 annual production at a swap price of $3.19/MMBtu. Earlier this month, Houston Exploration announced it had entered into an agreement to purchase South Texas properties from Conoco Inc. for $69 million. The new hedges will ensure the necessary cash flow to fund planned development in these properties in 2003, the company said in a written statement. Houston Exploration expects the transaction to close on Dec. 31, 2001 with an effective date of Jan. 1, 2002. The company’s hedging strategy is part of a corporate risk management program used to achieve more predictable cash flows. For 2002, current hedged volumes total 210,000 MMBtu/d with an average effective floor of $3.40 and an average effective ceiling of $4.66. Hedged volumes represent approximately 72%-77% of Houston Exploration’s 2002 estimated production volumes.