King Ranch

I just spoke briefly with Brian Riley, who is working to restructure the Knig
Ranch contracts with Exxon, and put Coastal into the loop. Yesterday I
forwarded each of you an E-mail from Steve Van Hooser which had drafts of
contracts attached. As I talked with Brian, the King Ranch set up as he is
negotiating will be simplified. The intent, as I understood it, is that we
will no longer buy at the wellhead. Rather, Coastal is entering into a a
gathering agreement with HPL to buy at the wellhead and ship to the plant.
HPLC will buy at the tailgate of the plant, net of PVR. So there will not be
future settlements with Exxon on liquids. The paper has not been returned
from Coastal or Exxon yet, but the deal is effective 4/1/00. Everything will
be under new agreements, with receipts and deliveries by different
counterparties. The gas flow continues the same, just under new contracts
and different counterparties.

Daren, Pat and Stella: Daren, Brian said he would get with you to discuss
the deal in further detail. Please include Pat and Stella in the discussion
also. The contracts should be reviewed and understood to ensure proper
scheduling. As I mentioned to Greg Sharp and Brian, it is critical that we
be kept in the loop, especially on retroactive deals, as scheduling,
transport rates and risk are affected.

Thanks to everyone for ensuring the communication lines are in place.