Gas Contract for Southern California

Kim, please find attached spreadsheet of our anticipated gas usage begining
in August of this year. This plant is currently under development in
simple cycle configuration and will be converted to combined cycle
operation in the near future. Its output, 48-60 MW will be sold to the
State of California through the water department. Delivery point for gas
will be SDG&E city gate.

Please provide 1yr, 3yr, and 5yr price indications including firm capacity.
At a later date we may want to discuss fixed transportation and a NYMEX
based float.

The Hanover Company, 12001 North Houston Rosslyn, Houston, TX 77086, is a
leader in oil field processing and compression services and is traded under
stock symbol HC.

Please call if you have any additional questions.

Wes Beasley
The Hanover Company
Manager of Power Development
(918) 524-6101
(918) 524-6109 fax
(918) 607-7110
- gas use 1.xls