STEPHENS ENERGY CORP. - The Railroad Commission of Texas

Texas fUbnce d Enqy Producas
719 Scdt Avm, .Sum 500
w m Falfs. TX 78301
m: Mr. Akx Mils
Re: Narurel Ga8 lssug
WeBuppatyarrelkrtrtobringPautapenaoeesstotheTaxseMtualgasplpelineindusby.Weare
awae d situaliaa vrherein operatws have nd been bea$d fai* by the gas purchaser in regarQr to
gassalaocanbad~o.auHngnessbbanspatthegastoanolhermarketfora~fee.,
Thii seems to w marr dten in ereao where them is litlk, a no canpe(ibjon, anag the pipdnes.
Opereton, wlth bw productiar vdunes cad suppat the cad of taking their gas to andher gas
buyer. Oflen these operalas are hit wim kwer prices for their g a ~ in addm to hi@w
lledi~eteri~e6ng feea
We d l also suppat to chmge the current prevailing pridng pisiar lhat is based upon a
percentage d proceeds (POP) concept A mom equitable pmvisiar migM be a relalion to a m@u
index. nuch as ihe NYMU index. This would result in the eslablWment of ked handling fees end
would lk? the producer incune b the artud market
We believe the repated remrd pclils of purchasers are largely a mlt d the POP pmisian found in
many gas purchase qlrecment9. These remrd puiis were nd earned by new ca#lbuction a better
mirkeblng,pipelinea~anviceaWebelievetheasfundswarldbetlermTeransinthe~d
thepmduwm, where hi- heeshonntheywildrillmore nmvwellsandlureworkolderwellsfor
addi-1 reserves.
Should you have any qumths concerning the &we, do nd hwitate Lo contad us
~ R e p . J h l ~
Fax 5124788605