THE EXPERTS SPEAK OUT ON NATURAL GAS

We believe the following is a fair summary of what expert industry observers are saying about natural gas in the U. S.

“Oil demand will be 2.7 percent higher in the first quarter of 2007 than the same period a year ago, and natural gas demand will surge 11 percent this year from 2006.” Source: Energy Information Administration, U.S. Government.

 "The demand for natural gas will reach about 30.7 TCF (trillion cubic feet) in 2015, but gas production will only reach 24.8 TCF." Source: Independent Producers Association of America.

"Natural gas consumption is expected to reach 34.7 TCF by 2020 ... natural gas production is expected to increase to 29 trillion cubic feet by 2020." Source: Energy Information Administration, U.S. Government.

"Natural gas demand is expected to grow by 50% by 2020, up to 33.6 quads from 22 quads in the 2000/2001 time frame." Source: Fueling the Future Update, the American Gas Foundation. Note: A "quad" is a quadrillion (1,000 trillion) British Thermal Units, a standard unit of measuring energy.

To meet the expected growth, huge new reserves of gas will have to be developed. A recent report, Gas Trends 2000, published by Cambridge Energy Research Associates, stated that the growth in demand "will test natural gas supplies available throughout North America." The report further states that in order to meet demand, the North American gas industry will have to find and develop as much as 300 trillion cubic feet of new gas reserves during the next 10 years. This amount is equal to the entire known reserves now in existence in North America!

To supply projected demand, "operators will have to be drilling at the rate of 17,523 gas wells a year by 2010, and 23,434 gas wells by 2020 in the lower 48 states. Those numbers compare to 10,268 lower 48 wells drilled in 1999." Source: Energy Information Administration, U.S. Government.

To discover and develop these reserves will require huge amounts of capital. "The investment required to meet the demand for natural gas will be on the order of$4 trillion to $6 trillion over the next decade." - Dr. Michael J. Economides, Professor, Chemical Engineering, University of Houston.