STEPHENS ENERGY CORP. - The Railroad Commission of Texas

Alliant Energy Desdemona, LP) have forced amendments in their contracts during
the contracted term. When questioning these amendments I have been told "If
you don't agree your contract will be terminated'and you can sell your
product elsewhere or you can shut your well in". These companies know fill
well there is no other alternative apd I, as with the majority of producers, are
captive to their demands. The Raiiroad Commission of Texas told me my
complaint is a civil contract matter and not within it's jurisdiction.
I have been told numerous times that a transportation contract is not an
option.
Recently Komye-Tillman Company took over operations of several wells located
in Eastland County. These are low volume wells that the RRC had shut in due to
violations associated with the previous operator. All wells are now in fill
compliance and are once again producing. The contract allows the Pipeline
Company to pay 82% of their WASP less the following deductions:
Fuel: 14+%
Compression: 9.25 per MCF
Dehydration: 9.05 per MCF
The pipeline is retaining for itself 50% of the value of the gas produced. I
can honestly say I will not put forth the effort nor incur the great expense of
returning low volume wells to productive status only to give gas to a pipeline
company.
4) Severance Tax: Producers pay severance tax on the value of their
production. Pipeline companies do not. How many tax dollars are not reaching
the State?
5) Mergers: In the last few years many mergers have taken place. The
result of this is one company, Enbridge Gathering, LP, now owns and
controls a majority of the pipdinw and gathering facilities within Eastland,
Palo Pinto and Stephens Counties. This is of great concern as it could lead to
further abuses.
Very truly yours, <
Marshall Tillman
President
Kornye-Tillman Company