All Standard Disclaimers & Seller Rights Apply.

Enterprise merges with TEPPCO to create $27 billion firmDeal creates largest publicly traded energy partnership in the U.S.

Enterprise and TEPPCO are merging to form the largest publicly traded energy partnershipin the U.S. with an enterprise value of more than $26 billion. The combined partnership, which willretain the name Enterprise Products Partners LP, will access the largest producing basins in the U.S.,

as well as serve some of the largest consuming regions in the country.The partnership will own almost 48,000 miles of pipelines comprised of over 22,000

miles of NGL, refined product and petro-chemical pipelines; over 20,000 miles of gaspipelines; and more than 5,000 miles of crudepipelines. The partnership’s other assets will

include 200 MMB of liquids storagecapacity; 27 BCF of gas storage capacity; one of the largest NGL terminals in the U.S., onthe Houston Ship Channel; 60 NGL, refined product and chemical terminals across thecountry; and crude import terminals on the Texas Gulf Coast.

The new partnership will also own interests in 17 fractionation plants with over 600,000 BPDof net capacity; 25 gas processing plants with a net capacity of 9.0 BCFD; and three butane isomer-ization facilities with a capacity of 116,000 BPD.

NRG rejects Exelon’s$7.16 billion takeover offer

Texas-based power generation companyNRG Energy has rejected a second “unso-licited” merger proposal from Exelon

Corporation – the nation’slargest gas and electric utility –claiming the $7.16 billion offer

significantly undervalues NRG as a company.NRG Chairman Howard Cosgrove, in an

official response sent to Exelon Chairman JohnRowe, said the offer of $27 per NRG share failsto adequately compensate NRG stockholderseven for the value created by NRG since theoriginal offer was launched.

The Board also rejected the proposal dueto the revised offer’s “extraordinary condition-ality, which remains unchanged from the origi-nal offer made last fall,” Cosgrove wrote.

He continued, however, that the revisedoffer, which is a 12% increase from the initialproposal, “certainly represents a step in the rightdirection and is a welcome development.” Healso highlighted a number of recent marketmoves by NRG, including its recent acquisitionof utility Reliant Energy’s Texas retail business,its development of a greenfield nuclear plant inVictoria Co., Texas, and its developing bio-energy sector.

Williams moves into the MarcellusGains upstream and midstream presence through two deals

The Williams Companies have established themselves as a major player in the MarcellusShale play via two separate deals, giving the company both a midstream and upstream presence.

Most recently, Williams purchased 50% interest in Rex Energy’s 44,000 acres inWestmoreland, Clearfield and Centre Co., Pennsylvania. Rex is essentially gain-ing $33 million through a “drill to earn” structure, whereby Williams pays 90%of all drilling costs up to a totalof $74 million ($33 million on

behalf of Rex and $41 million for Williams' 50%share of the wells).

Williams will also fund all of the carry untilyear-end 2011 after which the companies will share all costs of the joint venture on a 50/50 basis.In effect, the deal has Williams paying $20 million of drilling costs in 2009, allowing Rex to drill afew more wells than it originally planned.

The joint venture has already spud the first of five horizontal wells planned for the year inWestmoreland County, where it owns 15,500 acres (20% developed) and the Marcellus is found atdepths of 8,000 ft.

Enbridge moves forward with $2.1 billion in projectsEnbridge Inc. has agreed with Imperial Oil Resources and ExxonMobil to transport blended

bitumen from the Kearl project in the Athabasca Oil Sands region of northern Alberta to theEdmonton area. The estimated cost of the pipelines and related facilities is subject to finalization

of scope and detailed engineering, and regulatory approvals.Enbridge already has $2.1 billion in capital projects through the end

of 2010, and currently has ~$1.9 billion in total liquidity available – con-sisting of $350 million in new credit facilities, $940million in revolver availability, a $500 millionrevolver with its GP and $174 million in cash.

Enbridge now plans to raise ~$700 million inequity by selling non-core assets, entering into JV’s,and sourcing public equity to cover its $380 million financing shortfall. According to analysts atTudor Pickering Holt, bids were due in late June on a package of Enbridge’s non-core gatheringassets in Louisiana.

Of Enbridge’s $2.1 billion capex, $1.5 billion will be spent this year, with the remaining $600million slated for 2010. Projects include the Southern Access Expansion, whose second stage alonehas cost a total of $2.1 billion and was placed in-service in April (Stage I was completed in April2008). Stage II added ~210,000 BOPD of additional capacity and should generate earnings (beforetaxes) of ~$240 million with its first full year in-service.

Stage I of the expansion consisted of 321 miles of new pipeline along Enbridge’s LakeheadSystem in Wisconsin and construction of additional pump stations.

July 20, 2009 • Volume 20, No. 10

MIDSTREAMNEWSServing the Midstream Marketplace with News, Insight & Opportunities

ENTERPRiSE continues on page 2

WilliAMS continues on page 8

ENBRiDGE continues on page 4

NRG continues on page 10

The revised offer is 12% higher than theinitial one, and “certainly represents a stepin the right direction.”

The new deal represents a 9.3% premium to the closing price of TEPPCO units on June 26.

Shortly before teaming with Rex,Williams bought into the midstreamassets of Atlas Pipeline Partners.

Supply from Western Canada oilsands developments is expected to growby as much as 1.8 MMBOPD by 2015.

OVERTON & PUTNAM CO., TNNatural Gas Pipeline. 120-Mile System.DIRECT CONNECT TO MAJORShallow Gas Wells. 900 Ft. - 2,000 Ft.In Area of MultiPay. Shows 7-Pay Zones. PIPELINE100% OPERATED WI FOR SALE Pipeline Should Easily Take: 750 MCFDIn Area Of Deeper Exploration Activity.New Gas Available.Principals Only. Pipeline Only For Sale.

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MIDSTREAMNEWS Monday, July 20, 2009 2

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“The deal,” said CEO Michael Creel, “establishes Enterprise as the largest pipeline partnershipas measured by miles of pipe, enterprise value and equity market capitalization.”

Although Enterprise’s GP already owns TEPPCO’s GP and ~4% of its stock, it still needs a major-ity of TEPPCO unitholders to get on board. Last April, TEPPCO rejected a proposed $2.75 billiontakeover offer from Enterprise, forcing the company to up its bid. In the revised deal TEPPCO unithold-ers will receive 1.24 Enterprise common units for each TEPPCO unit, representing a 14.5% premiumto the initial offer and a 9.3% premium to the closing price of TEPPCO units on June 26.

“Enterprise will become the largest partnership and with that it increases its scale of opportu-nities and will have a lower cost of capital,” Ralph Pellechia, an analyst with Fitch Ratings, was

quoted in Reuters.“The new partnership will gain storage capac-

ity, which has been profitable because of a con-tango in oil markets, but even when storage isn't as

profitable, the partnership will own pipelines to transport the crude out of storage,” said Pellechia.Meanwhile, William Eddleman, of Houston-based Argus Research was quoted in Reuters as say-

ing the deal has a 90% chance of going through. “The only thing that might stand in the way ... is if theDepartment of Justice decides to look at it for anti-trust issues. It really becomes a huge consortium,probably bigger than Kinder Morgan, resulting in the market being made up of two giants.”

Eddleman also noted that Enterprise was previously more of a natural gas and NGL companybut the deal with TEPPCO expands it into the oil and refined chemicals businesses as well.

The executive management team of the general partner of Enterprise after the merger closeswill continue to include Dan Duncan, Chairman; Michael Creel, President and CEO; A. J. Teague,EVP and Chief Commercial Officer; Richard Bachmann, EVP and Chief Legal Officer; WilliamOrdemann, EVP and COO; and W. Randall Fowler, EVP and CFO.

“This deal establishes Enterprise as thelargest pipeline partnership in the U.S.”

Enterprise merges with TEPPCO continued from page 1

ONEOK offers more gas storage in TexasONEOK Partners is holding a non-binding open-season for firm gas storage at its Loop,

Texas, storage facility. The open season gives customers the opportunity to bid for up to 5.5 BCFof storage capacity that will be available with the reactivation of the field. The additional storage

space is currently projected to be available in April 2011. ONEOK Texas Gas Storage already owns and operates fully leased salt and reser-

voir storages with combined capacities of 4.7 BCF, so the reactivated storage will morethan double OTGS's existing capacity.

OTGS storage can be accessed by shippers on ONEOK WesTex Transmission (OWT), anintrastate pipeline serving West Texas markets. In addition, OWT currently has nine major pipelineinterconnects in the Waha, Texas, market hub.

Combined System Map

© All rights reserved. Enterprise GP Holding L.P., Enterprise Products Partners L.P. and TEPPCO Partners, L.P.

MIDSTREAMNEWS

Petroleum Listing ServiceP.O. Box 4987Houston, TX 77210Phone: (713) 650-1212Fax: (713) 658-1922Website: www.plsx.com

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To obtain additional information on properties forsale in this MidstreamNews, please contact our listingdept: (713) 650-1212 or by fax: (713) 658-1922 with theproperty number. Please note only clients are able to re-ceive additional information.

The MidstreamNews newsletter is published every two(2) to three (3) weeks by PLS, Inc.

© Copyright 2009 by PLS, Inc.Federal copyright law prohibits unauthorized reproduction by any means and imposes fines up to$100,000 for violations.

TerminalFractionatorUnderground StorageOffshore PlatformLiquid PipelineNatural Gas PipelineCrude Pipeline

EnterpriseFractionatorTerminalLiquid PipelineCrude PipelineNatural Gas Pipeline

TEPPCO

Monday, July 20, 2009 MIDSTREAMNEWS3

Exxon taps Enterprise’s Piceance processing plantEnterprise Products Partners has begun receiving initial gas into its new Central Treating

Facility (CTF) in Rio Blanco Co., Colorado, which was completed in the fourth quarter of 2008.Located eight miles south of the partnership’s Meeker gas processing complex, the CTF has a capacity

of 200 MMCFD and is dedicated to ExxonMobil’s nearby propertiesin the Piceance Basin, which are currently producing 100 MMCFD.

Enterprise CEO Michael Creel said this initiative complementsEnterprise’s recently completed Meeker II expansion, which doubles gas processing capacity of thecomplex. Natural gas delivered to the CTF is treated to remove impurities and compressed for trans-portation to Meeker, where Enterprise will have the option to utilize its stand-alone 200 MMCFDdew point control plant for processing, or route the natural gas through one of its larger cryogenic

processing units. With the recent completion of

Phase II, the cryogenic processingcapacity of the Meeker complex is now 1.5BCFD, allowing Enterprise to extract as much as70,000 BPD of NGLs. The separation of NGLs – including ethane, propane and butanes – makes theprocessed gas acceptable for delivery into one of several interstate transmission pipelines accessibleto producers through the White River Hub, which is jointly owned by Enterprise and Questar PipelineCompany. Utilizing Enterprise’s Mid-America Pipeline and Seminole systems, the NGLs extracted atMeeker can be delivered to the partnership’s Hobbs and Mont Belvieu fractionation facilities in Texas.

Meeker and the new Central Treating Facility are prominent features of a 30-year midstreamservices agreement Enterprise has entered into with ExxonMobil, which has estimated 45 TCF ofpotential resources on its acreage in the Piceance Basin. Total natural gas production among all theproducers in the basin, which covers more than 6,000 square miles, currently exceeds 1.5 BCFDfrom more than 6,000 wells. Production in the basin has been growing at an annualized rate aver-aging 23% over the past six years.

REX East ramps up throughput capacity to 1.6 BCFDRockies Express Pipeline began service on the portion of the Rockies Express-East pipeline

from Audrain Co., Missouri, to the Lebanon Hub in Warren Co., Ohio, with capacity ramping upto 1.6 BCFD. But work still continues at interconnections with other pipelines along its right-of-way. On July 2, full capacity of 175 MMCFD became available at the Douglas Co., Illinois, receiptinterconnect with Trunkline Gas Company. REX also raised the capacity of an interconnection withPanhandle Eastern Pipe Line Company in Putnam County,Indiana, to 100 MMCFD from 40 MMCFD. When fully opera-tional, the Panhandle interconnection will have a capacity of 175MMCFD. This section of REX-East includes future interconnects to NGPL, Ameren, Midwestern

Gas Transmission, Texas Eastern, DominionTransmission and Columbia Gas.

The remainder of the 639-mile, 42-inchREX-East pipeline eastward to Clarington,

Ohio, is expected to be in service by November 2009. When completed, the entire 1,679-mile REXpipeline will have a capacity of 1.8 BCFD, virtually all of which has been contracted under long-term firm commitments from creditworthy shippers.

Rockies Express Pipeline is a joint venture of Kinder Morgan Energy Partners, Sempra Energyand ConocoPhillips. KMP is overseeing construction of the project and operates the pipeline.

Bayou wins $27 million Fayetteville Pipeline contractThe Bayou Companies, a subsidiary of Insituform Technologies, won a $27.6 million con-

tract with ILVA S.p.A. for pipe coating, welding and logistical support services on theFayetteville Express Pipeline, a gas pipeline joint venture between Kinder Morgan and EnergyTransfer Partners.

Bayou’s work on the project will include the coating and double joint welding of 185 miles of42-inch pipe. Bayou will coat the pipe using internal flow efficiency and external fusion bondedepoxy processes. Bayou will also provide logistical support to ILVA in connection with the shippingand transport of the finished pipe to certain project sites.

The Fayetteville Express Pipeline will originate in Conway Co., Arkansas, and terminate at aninterconnect with Trunkline Gas Company in Panola Co., Mississippi. Bayou anticipates work onthe project to begin this month and expects completion by March 2010.

MarkWest Pioneer mayexpand Arkoma Connector

MarkWest Pioneer LLC, a joint venturebetween MarkWest Energy Partners andArcLight Capital Partners, launched a non-

binding open seasonand reverse open

season for incremental firm transportation serv-ice on the Arkoma Connector pipeline.

The Arkoma Connector, which is nearcompletion, is a 50-mile interstate pipeline thatwill provide new Woodford Shale takeawaycapacity and interconnects with MidcontinentExpress Pipeline and Gulf Crossing Pipeline.

MarkWest Pioneer has already receivedinquiries regarding additional capacity on theArkoma Connector and is conducting this openseason to gauge market interest in a possibleexpansion. In conjunction with the open season,MarkWest Pioneer is conducting a non-bindingreverse open season for existing shippers toexpress interest in turning back all or a portionof their current firm transportation entitlements.

Following the open season, MarkWestPioneer will determine whether to proceed withan expansion of the pipeline as well as the size,scope, and timing thereof.

Spectra opens Pittsburg officeto support TEAM expansion

Spectra Energy has opened an office inPittsburgh, Pennsylvania, to support its capitaldevelopment projects, including the proposed

Texas Eastern Appalachia toMarket (TEAM) expansionprogram. TEAM will helpbring new Marcellus Shale

production to markets in Pennsylvania and therest of the northeast United States.

Spectra’s Texas Eastern pipeline systemtraverses the Appalachian formation in WestVirginia, eastern Ohio, western and northernPennsylvania and southern New York. With atargeted capacity of 300 MMCFD, the TEAMexpansion will be developed over several yearsto match production growth in the Appalachianbasin. Initial in-service is projected to be asearly as November 2011.

In addition, Texas Eastern has receivedmore than 35 requests from producers to estab-lish interconnections with its pipeline lateralsin central and southwestern Pennsylvania. Therequests total more than 1.9 BCFD of capacitythrough 2010. Several of these interconnec-tions have been completed and are expected todeliver more than 150 MMCFD into the TexasEastern system.

Rocky Mountain Express full service of1.8 BCFD is expected in November.

www.coqueststructuredproducts.com/csp/home.html

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The new 200-MMCFD processing facilitywill easily process Exxon’s current volumesof 100 MCMFD in the Piceance Basin.

Chevron Corp. has been ordered to put on hold its $1.0 billion expansion project at its Richmond, California, refinery. The project

would have expanded the types ofcrude the refinery could process. A California judge ruled that the

environmental impact report filed to obtainconstruction permits for a new hydrogen plantfailed to provide an adequate greenhouse gasmitigation plan as required by California law.

Colorado Interstate Gas said anoperational flow order requiring shippers tobalance receipts and deliveries will continue.CIG is operating at an unusually high load factordespite limitations on storage flexibility. Despiteimprovement in achieving balance in its FortMorgan and Latigo storage fields in Colorado,inventories at these facilities continue to benear operational limits. No storage injectionswill be accepted from customers who havecontracted for interruptible service. In aseparate notice, CIG reported beginningoperations at its new Totem Storage field, whichconnects with its High Plains system in AdamsCo., Colorado. Totem has a working gas capacityof 6.0 BCF.

Kern River Gas Transmission completedrepairs to its Goodsprings Compressor Station

in northern Nevada. Capacity throughGoodsprings will remain at about 1.5 BCFD, or 200 MMCFD less than its

design capacity.Falcon Gas Storage Co. appointed

Antoine Lafargue as CFO. Lafargue comes fromArcapita BSC, Falcon’s largest shareholder and

equity sponsor. LaFargue will helpdevelop expansion plans forFalcon’s NorTex facilities and the

MoBay Storage Hub, for which the companyhopes to obtain project financing later this yearand be in commercial operation the secondquarter of 2011.

Green Plains Renewable Energycompleted the acquisition of the two ethanolplants in Nebraska, adding 150 million gallonsof ethanol production capacity per year andmaking Green Plains the fourth largest ethanolproducer in the U.S. with 480 million gallons of annual expected capacity. AgStar FinancialServices and other banks provided $123.5million in financing for the plant acquisitions.

Integrated Pipeline Services acquiredSheehan Pipe Line Construction Co., a providerof pipeline construction services. DavidSheehan will remain CEO of Sheehan Pipe LineConstruction Company and will also join theBoard of IPS.

MIDSTREAMNEWS Monday, July 20, 2009 4

Stage II consisted of 133 miles of new pipeline from Enbridge's Delavan pumping station inWisconsin to its Flanagan terminal in Illinois, where it will connect with Enbridge's SpearheadSystem west of Chicago.

Enbridge is now planning to extend the system from its Flanagan terminal south to the petro-leum transportation hub in Patoka, Illinois. This system will be constructed in 2010 and

begin operation by early 2011. Meanwhile, the $1.2 billion Alberta Clipper project will be placed

into service by year-end 2010. The U.S. portion of the project will begin construction this summerand will add ~450,000 BOPD of additional capacity, generating annual EBITDA of $170 millionits first full year of service in 2011.

Alberta Clipper is a crude pipeline that will provide service between Hardisty, Alberta, andSuperior, Wisconsin. This 1,000-mile segment should resolve expected capacity constraints.Ultimate capacity will be up to 800,000 BPD.

With supply from Western Canada oil sands developments expected to grow by as much as 1.8 MMBOPD by 2015, the industry has asked for more capacity out of the oil sands and into theU.S. Midwest markets.

Finally, the $150 million North Dakota Phase VI project is expected to add 51,000 BOPD ofcapacity to its current total of 110,000 BOPD by early 2010. Enbridge operates a 330-mile crudegathering and 620-mile interstate pipeline system that gathers crude oil near producing wells in 36 oil fields in North Dakota and Montana.

Enbridge moves forward with expansion projects continued from page 1

RefiningBriefs

ENERGY TRADEPRODUCER SERVICES

713.874.8400

dteenergy.com

Existing Enbridge Pipelines

Southern Access Stage 1 Expansion

Southern Access Stage 2 Expansion

Southern Access Extension

Enbridge’s Southern Access System

Source: Enbridge Presentation

Gretna

Clearbrook

Superior

Delavan

Flanagan Chicago

Patoka

Cushing

WoodRiver

Detroit

LUKOIL wins bid for Total refineryOne week after Valero was thwarted in its attempt to purchase a stake in a Dutch refinery from

The Dow Chemical Co., France’s Total purchased the interest instead, and then immediately sold itoff to Russia’s LUKOIL for about $725 million.

LUKOIL, which is 20% owned by ConocoPhillips, already supplies Russian crude tothe Vlissingen refinery, while Total is a LUKOIL partner in the northern RussianKharyaga field and in Azerbaijan’s Shah Deniz Caspian Sea gas field.

In May, Valero agreed to buy a 45% stake in the 153,000-BPD refinery from Dow ChemicalCo. Valero Chairman Bill Klesse said, “Although we are disappointed with the result, we will con-tinue to seek opportunities to acquire high-quality assets at attractive prices.”

Now LUKOIL is expected to shell out $725 million for its 45% stake after being repeatedlythwarted itself in attempts to enter the European refining market. The Russian firm had previouslyattempted to buy Germany’s Wilhelmshaven refinery, which was ultimately bought byConocoPhillips. LUKOIL then bid for BP's Coryton refinery, which was eventually sold to Petroplus.

In 2008, LUKOIL did manage to purchase 49% of Italian refiner ERG’s Isab di Priolo refin-ery, for around $1.0 billion.

Indonesian LNG heads for West CoastThe BP-operated Tangguh LNG project (37%) has shipped its first commercial cargo of

LNG. Tangguh is Indonesia's third largest LNG center, comprising six gas fields within threeareas: Berau, Muturi and Wiriagar in Papua Barat. Phase I production facilities include two plat-

forms and one LNG plant. Other partners include CNOOC (13.9%), MI Berau (16.3%),Nippon Oil Exploration (12.23%), KG Berau/KG Wiriagar (10%), LNG Japan (7.35%)and Talisman (3.06%).

Sempra Energy has contracted for 500 BCF of LNG from Tangguh for a 20-year period andexpects to begin importing the LNG from Tangguh to its Costa Azul terminal in Baja Californiathis September.

The Costa Azul terminal has 1.0 BCFD of LNG capacity, but has not received cargo since lastSeptember. The terminal began operations in May 2008 and supplies gas to southwest U.S. markets.

Repsol enters North American LNG marketRepsol, Spain’s largest oil company, entered the North American gas market when its

75%-owned Canaport terminal received first LNG in June. The terminal, located in NewBrunswick, is the first of its kind to be built on the east coast of North America in 30years and the first ever to be built in Canada.

The 1.0-BCFD facility will serve both Canada and the northeast U.S. The start ofoperations will help consolidate Repsol's joint venture with Gas Natural as the world's fourth-largest shipper and marketer of LNG.

In Canada, working with Irving Oil (25%),Repsol has supply contracts with a number ofother gas sources that will complement the oper-ations at the Canaport LNG Terminal. The termi-nal, along with Repsol's other regional assets, will be capable of meeting about 20% of the gasdemand in New York and New England. The facility also has 9.9 BCFe of storage capacity.

Regasified LNG from the Canaport terminal will flow through the 90-mile BrunswickPipeline, which connects the terminal to the existing Maritimes & Northeast Pipeline at theCanada/USA border. Repsol has contracted all of the firm capacity in the Brunswick Pipeline.

The Canaport terminal is one of Repsol's 10 “key growth projects” through 2012. The com-pany is also helping construct an LNG liquefaction plant in Peru, from where the company willpurchase 100% of the LNG produced beginning in 2010.

Spanish firm buys into Canadian LNG facilityKitimat LNG and Gas Natural signed a memorandum of understanding under which Gas

Natural will acquire up to 30% of production from Kitimat’s proposed LNG export terminal inBritish Columbia. Gas Natural also has the option to purchase an equity stake in the terminal.

Under the agreement, Gas Natural will purchase up to 1.6 million tons per annum(mtpa) of LNG from the terminal for 20 years. In addition to its presence in the Atlanticand Mediterranean LNG markets, Gas Natural may also acquire a strategic position in

the Pacific basin. The Kitimat LNG facility will receive natural gas via pipeline from Western Canada. The

gas will then be cooled and liquefied in preparation for export via ship to global markets, includ-ing Asia. Gas Natural is the world’s second largest LNG operator through Stream, its 50% jointventure with Repsol.

Monday, July 20, 2009 MIDSTREAMNEWS5

ConocoPhillips plans East Coast refineryConocoPhillips hopes to build a new refinery on the U.S. East Coast in tandem with its

Russian joint venture LUKOIL. The refinery will focus on processing Russian crude blends.LUKOIL is Russia's second largest oil producer and its largest private oil company. Conoco has

20% interest in LUKOIL, which owns producing properties inRussia's Arctic. The exact timing and details of the proposed refin-ery were not disclosed.

Meanwhile, the Saudi Arabian Oil Company (Saudi Aramco) and ConocoPhillips have re-launched the bidding process for construction of a planned 400,000 BPD export refinery at theYanbu Industrial City of Saudi Arabia.

Both companies cited more favorable markets as the reason for resuming the bidding process.The full-conversion refinery is being designed to process Arabian heavy crude supplied by SaudiAramco. It will produce high-quality, ultra-low sulfur refined products that will meet current andfuture product specifications. The project is targeted to start up in the third quarter of 2014.

LNG

Repsol’s JV with Gas Natural receivedfirst lNG shipment in New Brunswick toserve Northwest markets.

Avista requests Oregonpipeline rate increase

Avista has filed a request with the PublicUtility Commission of Oregon (PUC) toincrease gas rates to recover costs for its capital

projects. This is only thethird time since Avista

began serving its Oregon customers in 1991that the company has requested a rate increaseto recover its costs for delivering natural gas.

Major capital projects included in the fil-ing are pipeline reinforcement projects through-out Avista's Oregon properties. These projectswill increase the capacity and reliability ofAvista’s distribution system in Medford,Klamath Falls, Roseburg and LaGrande.

The PUC has up to 10 months to reviewAvista’s filing, which requests an averageincrease of 11.6% to produce $14.2 million inadditional revenue. Avista cited declining gasprices since it reduced Oregon customer ratesby 4.1% last November as the reason for the proposal.

Boardwalk completes Gulf Crossing repairs

Boardwalk Pipeline Partners has com-pleted repairs on the Gulf Crossing Pipeline.Anticipated peak-day delivery capacity for Gulf

Crossing in July is estimated at1.3 BCFD after which Board -walk will increase capacity to1.4 BCFD.

Separately, FERC said it will allow GulfCrossing to expand its Mira CompressorStation in Caddo Parish, Louisiana, to increasepeak-day delivery capacity to 1.7 BCFD in2010. Gulf Crossing consists of 357 miles of42-inch pipeline originating near Sherman,Texas, and proceeding to the Perryville,Louisiana, area.

The pipeline takes gas from the Barnettand Woodford Shales and transfers it, via inter-connects, to markets in the Midwest,Northeast and Southeast.

Sourcing Capital.Energy Finance.Call (713) 650-1212 today to discusspotential opportunities.

NYMEX Natural Gas Futures Near - Month Contract SettlementPrice, WTX Intermediate Crude Oil Spot Price & Henry Hub Natural Gas Spot Price

EIA sees oil and gas prices fall steadily across the countryNatural gas prices posted across-the-board decreases at both the spot and futures markets for

the week-long period ending Wednesday, July 8. Price decreases at the spot market ranged between1 and 44 cents per MMBtu, although a few points in the lower 48 States posted small increases.

During the report week, theprice at the Henry Hub spotmarket fell to $3.22 perMMBtu. At NYMEX, gas futurescontract for August delivery lost 44.2 cents and

ended the report week at $3.353 per MMBtu. The price for the August 2009 contract has posted adecrease in each of the trading sessions since becoming the near-month contract on June 29, 2009.

Moderate temperatures across the lower 48 States outside of Texas and a favorable supply sit-uation led to widespread declines in natural gas spot prices at almost all market locations for theweek-long period from July 1 to July 8.

MIDSTREAMNEWS Monday, July 20, 2009 6

NYMEX Closing Dates

NYMEX Natural Gas Settlement PriceWTI Spot PriceHenry Hub Spot Price

Regional Spot Prices for Natural Gas

* Avg, of NGI’s report average for: Malin, PG&E citygate and Southern California Border.Source: NGI’s Daily Gas Price Index (http://www.intelligencepress.com)

Spot Prices($ per MMBtu)

Thu2-Jul

Fri3-Jul

Mon6-Jul

Tue7-Jul

Wed8-Jul

Henry Hub 3.49 Holiday 3.24 3.30 3.22

New York 3.69 Holiday 3.53 3.61 3.53

Chicago 3.15 Holiday 3.09 3.29 3.17

Cal. Comp. Avg.* 3.07 Holiday 2.97 3.10 3.02

Future ($ per MMBtu)

August Delivery 3.615 Holiday 3.487 3.429 3.353

September Delivery 3.757 Holiday 3.622 3.558 3.478

In addition, the decrease in demand result-ing from the holiday-shortened week providedfurther downward pressure on prices.

Prices at market locations east of theRockies recorded the largest declines, withregional decreases averaging between 12 and 37cents per MMBtu. Prices in the Northeast, wheremoderate temperatures prevailed for the durationof the report week and dampened cooling load,fell by an average of 35 cents per MMBtu, to aregional average of $3.46 per MMBtu.

Despite high temperatures in Texas, theGulf of Mexico region also recorded significantdecreases on the week. While all regions alongthe Gulf Coast posted declines, price decreaseswere particularly striking in Texas, where hightemperatures prevailed for much of the reportweek and significant volumes of natural gas areused for electric power generation. Spot pricesin Louisiana decreased by an average of 34cents, although one point, Mississippi RiverTransmission Corporation, posted a weeklyincrease of 8 cents or about 3 percent.

As of July 8, the average price of naturalgas in the spot market was $3.21 per MMBtu inLouisiana. Similarly, in the South and EastTexas trading regions, natural gas prices fell by33 and 22 cents, respectively, reaching regionalaverages of $3.20 and $3.12 per MMBtu,respectively.

As for oil, the price of the West TexasIntermediate crude oil contract fell by $9.17 perbarrel on the week ending July 8 to $60.15 perbarrel. In tandem with falling crude prices, nat-ural gas futures contracts’ prices at theNYMEX also fell this week, with the August2009 price sliding 44.2 cents since Wednesday,July 1. The August 2009 contract has decreasedin every trading session since becoming thenear-month contract on June 29, losing a totalof 59 cents since that day. Beyond the near-month, all remaining contracts in the 12-monthstrip also posted decreases this week. The tworemaining contracts in the injection season,September and October 2009 contracts,decreased by 47 and 49 cents, respectively. TheSeptember contract settled yesterday at $3.478,falling about 12% since last Wednesday.

The price declines for both oil and gasreflect the limited demand for cooling needsand above-average storage volumes. Whilesome uncertainty remains regarding future mar-ket conditions, including potential hurricaneimpacts on production over the next fewmonths, futures prices indicate that theexpected inventory levels of natural gas by theend of the injection season may be sufficient tomeet the upcoming winter demand. Overall, the12-month strip fell by $0.409 or 8% perMMBtu to $4.850 since Wednesday, July 1.

$12

$8

$4

$0

3/30

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9

4/6/20

09

4/13

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9

4/20

/200

9

4/27

/200

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5/4/20

09

5/11

/200

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5/18

/200

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5/25

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6/1/20

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6/15

/200

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6/29

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7/6/20

09

Note: The West Texas Intermediate (WIT) crude oil price, in dollars per barrel, is converted to $/MMBtu using a conversion factor of 5.80 MMbtu per barrel. The dates marked by vertical lines are the NYMEX near-month contract settlement dates.Source: Natural gas prices, NGI’s Daily Gas Price Index (http://intelligencepress.com), WTI price, Reuters News Service (http://www.reuters.com)

4/28/ 2009 5/27/ 2009 6/26/ 2009

Dol

lars

per

Mill

ion

Btu

The price of the WTi crude oil contractfell by $9.17 per barrel on the week endingJuly 8 to $60.15 per barrel.

The price at the Henry Hub spot marketfell 11% to $3.22 per MMBtu.

Gas storage rises to second highest level since 1994As of Friday, July 3, working gas in underground storage rose to 2,796 BCF, with inventories

exceeding the 5-year (2004-2008) average by about 19.3%, according to EIA’s Weekly Natural GasStorage Report. The implied net injection of 75 BCF fell short of both the 5-year average injectionof 90 BCF and last year’s injection of 89 BCF. Natural gas in storage is now 601 BCF or 27%higher than year ago levels and 452 BCF or 19% higher than the 5-year (2004-2008) average.

At 2,796 BCF, working gas stocks are at the second-highest level for any week in July since1994. At 1,013 BCF, the natural gas stocks in the Producing region are only 61 BCF below the all-time high for this region established onNovember 23, 2007. The East region accountedfor most of the net injection into storage at 80%,which is significantly higher than the more typ-ical 60% for this region. At the same time, the Producing region accounted for 16% or 12 BCF.

The relatively small amount injected in the producing region undoubtedly reflects the increasein use of gas for electric power generation, the EIA said. According to data released by the EdisonElectric Institute (EEI), electric output for the week ended July 4 increased more than 11% over thecorresponding week in 2008 in the region roughly coinciding with the Producing region. While thisestimate includes power from all energy sources, the marginal fuel for power generation is generallynatural gas, so the volume impact on gas markets is expected to have been significant, particularlyin the South of the country. However, EEI noted a 2.1% decrease in electric power generation over-all in the U.S. compared with the same week last year.

The below-average net additions to storage occurred despite the relatively weak demand asmoderate temperatures prevailed during the week. Temperatures were moderate during the weekending Thursday, July 2, in the United States as a whole. The average temperature in the countrywas 74 degrees, which was less than 1 degree warmer than normal and about the same as last year’slevel. As measured by cooling degree-day data, temperatures in the United States were about 8%warmer than normal, however 4 out of the 9 Census Divisions recorded temperatures that were sig-nificantly cooler than normal, including the Northeast and the Midwest, which rely on gas for elec-tric power generation.

Monday, July 20, 2009 MIDSTREAMNEWS7

Estimated Average Wellhead Price

Note: Prices were converted from $ per Mcf to $ per MMBtu using an average heat contentof 1,029 Btu per cubic foot as published in Table A4 of the Annual Energy Review. Source: Energy Information Administration, Office of Oil and Gas.

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09

Price ($ per Mcf) 5.15 4.16 3.72 3.43 3.45 3.45

Price ($ per MMBtu) 5.00 4.04 3.62 3.33 3.35 3.35

Current Natural Gas Stocks by Region

Source: Energy Information Administration: Form EIA-912, “Weekly Underground NaturalGas Storage Report,” and the Historical Weekly Storage Estimates Database. Row and col-umn sums may not equal totals due to independent rounding.

All Volumes in BcF

CurrentStocks7/03/09

One-Week Prior Stocks6/26/09

Implied NetChange fromLast Week

EstimatedPrior 5-Year(2004-2008)Average

Percent Difference

From a 5 YearAverage

East Region 1,349 1,289 60 1,235 9.2

West Region 434 431 3 341 27.3

Producing Region 1,013 1,001 12 768 31.8

Total Lower 48 2,796 2,721 75 2,344 19.3

JEMB Realty, a privately-held real estateand energy investment firm, has participated inthe closing of a $1.5 billion debt and equityfinancing of Astoria Energy II LLC, which willconstruct, own and operate a gas fired powerplant in New York City. The 550 Megawatt plantis the second phase of the Astoria Energyfacility, doubling the size of the facility when itgoes on-line in 2011.

Kinder Morgan Energy Partners’Plantation Pipe Line Company has becomethe first pipeline company in the United Statesto transport biodiesel for commercial purposes.

Plantation completed the first transmarket

commercial shipment of blended 5% biodiesel(B5) on a mainline segment of the pipeline. The company injected B99 into ultra low sulfurdiesel at Plantation’s Collins, Mississippi, pumpstation and breakout tank farm creating a15,000 barrel batch of B5 that it then shipped tomarketing terminals in Athens and Roanoke.Upon receipt of the product at both facilities,Kinder Morgan performed testing on samplesfrom the batch and found that the samplesarrived on specification.

PG&E Corp. promoted Christopher Johnsfrom SVP and CFO to the position of president.

Royal Dutch Shell is conducting a strategicreview of its Montreal East refinery in Canada,

which may lead to the closure or sale of the plant. The company said it willdecide in the near future on the exact

fate of the 130,000-BPD refinery.Pennsylvania refiner Sunoco, Inc., com -

pleted the purchase of a 100 million gallons-per-year ethanol manufacturing facility in Volney,

New York, from Northeast Biofuels,LP for $8.5 million. As the largestethanol manufacturing facility in

the Northeastern U.S. the facility is expected tosupply 25% of Sunoco’s ethanol needs. Sunocoalso hired Brian MacDonald as SVP and CFO.MacDonald joins from Dell, Inc., where he wasCFO for the company’s commercial business unit.

TC PipeLines LP completed the acquisit -ion of North Baja Pipeline LLC from TransCanadafor $395 million in cash and stock.

The Shaw Group named Lee Elder as SVPof business development in the company’sPower Group. Elder joins Shaw from GE HitachiNuclear Energy, where he served as SVP ofglobal sales and marketing.

Briefs

Not a client? Call (713) 650-1212.

Want More Listings?Members can search PLS’ extensivelisting database at www.plsx.com.

At 1,013 BCF, gas stocks in the producingregion are only 61 BCF below the all-time high.

Midstream AssetsPLS can put its experience, marketing and publishing resources to work to sell your midstream assets.For more information on how PLS can help you sell your assetscall (713) 650-1212 or access www.plsx.com

Magellan purchases Longhorn Partners PipelineMagellan Midstream Partners has been selected as the “stalking horse” bidder for all of the

assets of Longhorn Partners Pipeline. Completion of the acquisition is subject to an auction process,bankruptcy court approval and customary regulatory approval.

The 700-mile pipeline transports refined petroleum products from Houston to El Paso. Also included in the purchase is a 900,000 barrel storage terminal in El Paso thatserves local petroleum product demand and delivers the product to third-party pipelines

that run to Arizona, New Mexico and, in the future, to Northern Mexico.Magellan currently serves as the operator of the pipeline system. The purchase is $250 million

plus the fair market value of line fill, which is currently estimated at $90 million. Managementintends to finance the acquisition with debt.

China National Offshore Oil Corp. (CNOOC)won approval to build an LNG terminal in theeastern province of Zhejiang. The company'sfourth LNG terminal should open in 2012 with anannual receiving capacity of 3 million metric tonsin the first phase, which alone will cost over $1.0billion and comprise three 160,000-cubic-meterstorage tanks. A second phase will increaseannual receiving capacity to 6 million tons. A 38.7-kilometer gas pipeline with first-phase trans mission capacity of 8.4 billion cubic meterswill be built to deliver gas from the terminal todownstream users. CNOOC already has two LNGreceiving terminals in China with a third inShanghai to open by year end.

China National Petroleum Corp (CNPC) hasbegun work on an oil pipeline in the Africancountry Chad that should become operational in2011. The pipeline will transport crude fromKoudalwa field to the Djarmaya refinery north ofthe capital. CNPC has been investing in Chadsince 2003, when the country first began pro duc -ing oil. Chad currently produces 170,000 BOPD.

Japan’s Inpex Corp. began construction onthe Naoetsu LNG receiving terminal on theHonshu Island, Japan. Inpex has over 2,000miles of pipeline serving the Minami-NagaokaGas Field and the other gas fields in Japan,bringing it to the Tokyo metropolitan area.Inpex will begin introducing LNG-sourced gasfrom Shizuoka Gas Company in January 2010and import LNG at its own Naoetsu LNGreceiving terminal beginning 2014.

Kazakhstan and China have completedconstruction of the Kenkiyak-Kumkol oil pipeline(the second part of the Kazakhstan-China oilpipeline). The first part of the pipeline wasconstructed in 2008, and should help feed China’sseemingly insatiable appetite for new energy.

Nigeria and Algeria agreed to build apipeline to bring Nigerian gas across the Saharadesert to European markets. Nigeria, one of theworld's top crude exporters, also has significantgas reserves. The $13-billion project shoulddeliver about 90 BCF per year to Europe. Recently,Gazprom said it hoped to sign a cooperation dealwith Nigerian National Petroleum to help buildthe pipeline.

MIDSTREAMNEWS Monday, July 20, 2009 8

A&DInternational BriefsGateway divests offshore Texas pipeline system

Gateway Energy Corp. has sold its Shipwreck System, consisting of an offshore platform andrelated pipelines primarily offshore Galveston County, Texas, and the related onshore Crystal Beachterminal. In a separate transaction, Gateway also sold its nearby Pirates' Beach gathering system.

The Shipwreck/Crystal Beach assets were sold to Impact Exploration & Productionfor consideration of $200,000 and the assumption of liabilities. As a result of this sale,Gateway expects to realize a gain of $425,000 during the second quarter.

The Pirates' Beach Assets were sold to Emerald Gathering and Transportation for considera-tion consisting of $300,000 in five installments and the assumption of liabilities. As a result of thissale, Gateway will realize a gain of $112,000 during the second quarter.

Gateway CEO Robert Panico said the assets service mature producing areas that he believesdo not have long-term growth potential.

Meanwhile, Gateway Energy ServicesCorp. will enter the Columbia Gas of Ohioretail energy market following the com-pany's re-entrance into the Dominion East Ohio territory in February. Gateway plans to offer its lineof standard products to both residential and small-commercial customers. The company will alsooffer fixed-rate plans for 12- and 24-month terms.

Gateway will begin selling natural gas in select Columbia Gas service areas, with more loca-tions to be added shortly. Gateway has held an Ohio energy marketer's license since 2002.

“The assets service mature producing areasthat do not have long-term growth potential.”

Typical shale wells in the area hold 3.0 BCF and cost $4-$4.5 million to drill and complete. InButler Co., where the companies control 21,000 acres, the shale is shallower (5,000 ft.), resultingin cheaper well costs of $3-$3.5 million, targeting 1.6 BCFe per well.

After year-end 2009, Williams will become the operator of all the assets inthe Marcellus Shale.

Ralph Hill, who leads Williams' exploration and production business, saidthe company has extensively studied the Marcellus. “We're excited about the

opportunity from a technical perspective, especially with being able to leverage our knowledge andexpertise in ramping up activity in other unconventional gas plays,” Hill said.

Shortly before teaming with Rex, Williams obtained a midstream presence in the Marcellus aswell when it signed a joint venture with Atlas Pipeline Partners. The new entity will be known asLaurel Mountain Midstream LLC and will include 1,800 miles of intrastate gas gathering lines inthe Appalachian Basin servicing 6,900 wells.

Under the terms, Atlas will receive $100 million and a $25.5-million note, while Williams gains51% ownership interest in the joint venture. Williams is also operating the gathering system. AtlasEnergy Resources, a leading producer in the Marcellus, will be the anchor tenant on the system.

“Williams usually starts small in a given area, but likes to be big/leader over time,” analystsat TPH said. With two deals in the span of two weeks, the company is notwasting any time.

Williams moves into the Marcellus continued from page 1

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SandRidge sells Pinon gathering system for $200 millionSandRidge Energy has sold its Pinon field gathering system to the Energy & Infrastructure

Group of TCW for $200 million. The assets include 370 miles of gas gathering lines in the WestTexas Overthrust in Pecos County. The system primarily serves the Pinon field and currently has

throughput capacity in excess of 400 MMCFD accommodating both sweet andhigh CO2 gas. Plans are to expand the system to over 1.0 BCFD of throughputcapacity over the next several years.

TCW’s energy chief investment officer, Kurt Talbot, said he expects the Pinon field to con-tinue production growth. “We've had a relationship with Tom Ward, the CEO of SandRidge, since1990 and this will be the third major investment we will have made in support of businesses asso-ciated with him,” Talbot said.

CapitalMarketsThe latest news articles online:

Barclays: Further declines expected in 2009global E&P spending

Candover sells WoodMac to CharterhouseCapital for ~US$894 MM

GeoResources’ credit facility bumped up to $250 million

CIT Group hires bankruptcy adviser

From Austin to the Hill

IPAA responds over Hedging Concerns inNew CFTC Rules Proposal

Kayne Anderson closes $820 MM equity fund

Mariner closes stock, debt offerings for$446 million

McMoRan sees $158.4 million in offering proceeds

Cubic’s borrowing base cut to $7.5 million

Legacy reverses course on ‘going private’proposal

Quest entities merging to cut costs, simplify structure

Search & Seek– Access our online libraryfor past and/or present publications.

Not a client? Call (713) 650-1212 for detailsof PLS’ services.

PHMSA plans new pipeline reporting regulationsIn a Notice of Proposed Rulemaking on July 2, the Department of Transportation’s Pipeline

and Hazardous Materials Safety Administration (PHMSA) proposed revisions to the PipelineSafety Regulations to improve the reliability and utility of its data collection, the EIA reported.PHMSA proposed 11 new regulations intended to enhance the quality of its data and better assessthe pipeline industry as a whole.

The proposed regulations include changing reporting requirements for explosions or fires;establishing a volumetric basis for reporting unexpected or unintentional natural gas loss; requiringoperators to file and report data electronically when possible; requiring operators of LNG facilitiesto submit incident and annual reports; and creating and requiring participation in a NationalRegistry of Pipeline and LNG Operators. Comments on the proposed regulation are due by August31. The notice is available in the July 2 edition of the Federal Register.

Meanwhile, Energy Secretary Steven Chu has released funds for weatherization, which shouldlower demand for natural gas further. He said the Department of Energy will provide more than$288 million in funding authorized under the American Recovery and Reinvestment Act to supportweatherization assistance programs in Arkansas, Iowa, Kentucky, Massachusetts, Michigan,Minnesota, and New Hampshire. The weatherization program will be available to families earningup to 200% of the Federal poverty level, or about $44,000 per year for a family of four. The weath-erization projects will increase the energy efficiency of about 91,000 homes, allowing recipienthouseholds to lower their energy bills.

EIA releases Short-Term Energy OutlookThe EIA released its latest Short-Term Energy Outlook (STEO) for July, which projects that

the monthly average Henry Hub natural gas spot price will be $3.91 per MCF in June, which is 5cents below May’s average spot price. The monthly average Henry Hub spot price is expected to

remain below $4.60 per Mcf through November of this year because of abundantgas supplies and weak demand.

The Henry Hub spot price is expected to average $4.22 in 2009 and increaseby $1.77 to $5.93 per Mcf in 2010. Total gas consumption is expected to decrease

by 2.3% in 2009 and remain steady through 2010 because of declining demand for natural gas as aresult of poor economic conditions. Consumption declines are expected to be concentrated in theindustrial sector, which is expected to decrease by8.2% in 2009.

Electric power sector consumption isexpected to increase by 2.4% in 2009 because oflower natural gas prices relative to coal and thendecrease by 1% in 2010. Marketed natural gasproduction is projected to decrease by 0.6% in 2009 and by 2.9% in 2010 because of a reduction innatural gas drilling. According to Baker Hughes, total working gas rigs have fallen 57% sinceSeptember 19, 2008. The decline in natural gas production resulting from the drop in rigs isexpected to occur in the lower-48 non-GOM region during the second half of this year.

Historically high storage levels and limits to storage capacity may cause prices to decline fur-ther this fall despite declining production. Although prices are expected to recover in early 2010 asthe market balance tightens, improvements in the productive capacity of domestic onshore supplysources may temper rising prices throughout the forecast period.

The average Henry Hub spot price isexpected to remain below $4.60 per Mcfthrough November.

Why wait for the capital you need? If you are a small- tomid-sized operator with a project in the $1 to $20 million

range, contact Patriot Exploration at 713-353-3997patriotexploration.com

MIDSTREAMNEWS Monday, July 20, 2009 10

Israel’s largest refiner, Oil Refineries Ltd.,activated the first stage of its Mild Hydro -cracking unit, which increase Diesel and Jet Fuel production by over 1.5%, contributing anadditional 120 thousand tons of producedmiddle distillates per annum. The second stage will open in Q3 2010, increasing pro -duction by a further 1.5%. The total expectedinvestment cost in both these |stages is $62 million, substantially lower than the initial$79 million budget.

U.S.-based Pacific Asia Petroleumacquired 49% in the Handan Chang YuanNatural Gas Company. HGC owns and operatesgas distribution assets in the Hebei Province of China.

South Korea’s Samsung Engineering won an order worth $2.6 billion to renovate an oilrefinery in Algeria. State-run Sonatrach ownsthe Skikda refinery and wants to upgradefacilities over the next three years. It is thesingle-biggest contract Samsung has everreceived.

Saudi Aramco and Shell plan to start uptheir ultra-low-sulfur diesel refinery in October.The refining facility is at Jubail Industrial Cityand is expected to produce about 90,000 BPD ofultra-low-sulfur diesel, making it the Kingdom'sfirst producer in compliance with newenvironmental standards.

The Shaw Group won contracts to provideengineering and design services for two150,000 BPD refineries in Iraq. In March, Shawopened a new office in Abu Dhabi to support itsincreasing activity throughout the Middle East.

Total SA, the major shareholder of the153,000-BPD Vlissingen refinery in theNetherlands, restarted some of the facility'sproduction units in late June after a majorscheduled turnaround.

Vietnam has made its first batch ofcommercial A92 and A95 petrol at its first-everdomestic oil refinery in the central province ofQuang Ngai. The Dung Quat refinery has alreadyproduced other products, such as LPG, light cycleoil as a raw material for diesel production anddiluted crude oil to make fuel oil. The refinery isscheduled to operate at 85% of its capacity byJuly 25 and at 100% by August 25.

International Briefs

TRIADENERGY CORPORATION

1616 Voss, Ste. 650Houston, TX 77057Ph: (713) 337-1440Fax: (713) 337-1490

www.triad-energy.com

Cosgrove said the Reliant Energy purchase alone adds $4.50 a share in value to NRG, afar cry from the $1 per share that was ascribed by Exelon. The Reliant purchase also puts NRGon track to reach annual EBITDA of $2.5 billion this year, which represents a 21% compoundannual growth rate over the past six years, and is an increase from NRG’s previous estimate of

$2.18 billion.Cosgrove said NRG is open to any proposal that properly reflects its “funda-

mental value and extraordinary growth prospects.” NRG also has in excess of $4.0billion in liquidity; it has increased its 2009 cash flow guidance by $200 million to $1.675 billion;and raised its share buyback plan to $500 million from $330 million.

The majority of NRG’s power plants are oil, natural gas or coal-fired, but the company isalso participating in a wind-generated plant in Pecos County, Texas, with 75 megawatts of netcapacity. In Bay City, Texas, NRG is participating with 50% WI in a nuclear-fueled power plantwith 1,175 megawatts of net capacity.

In Chambers Co., Texas, NRG and Optim Energy recently opened their newly constructednatural gas-fueled power plant at NRG’s Cedar Bayou Generating Station. The plant adds 550megawatts (MW) of electrical generation. Optim and NRG each own 50% of the unit.

Exelon said it is seeking to create the largest U.S. power generator by output. If the compa-nies were to combine, the merger would create an entity with significant presence in five majormarkets, including Texas, California and the Northeast.

NRG has an annual board meeting on July 21, for which Exelon has nominated a number ofdirectors for election. The meeting “could serve as an endgame for the bid,” Wells Fargo analystMichael Bolte said in a research note.

“Since we find it unlikely that Exelon will raise its offer ... we think the fate of the deal nowrests in the hands of NRG shareholders,” Bolte said. He added, however, that he doubts NRGshareholders will elect Exelon’s nominees.

“If Exelon loses that vote and truly has no intention to raise its offer, we think it mightfinally decide to give up.”

NRG rejects takeover offer continued from page 1

NRG’s Texas Power Projects

Texas Location Percent

Ownership NRG Owned

(Net MW) Fuel Type

Cedar Bayou Chambers Co., TX 100.00 1,495 Natural Gas

Greens Bayou Houston, TX 100.00 760 Natural Gas

Limestone Limestone Co., TX 100.00 1,690 Coal

San Jacinto LaPorte, TX 100.00 165 Natural Gas

Sherbino Pecos Co., TX 50.00 75 Wind

South Texas Project Bay City, TX 44.00 1,175 Nuclear

SR Bertron Deer Park, TX 100.00 840 Natural Gas

TH Wharton Houston, TX 100.00 1,025 Natural Gas

WA Parish (coal) Fort Bend Co., TX 100.00 2,475 Coal

WA Parish (natural gas) Fort Bend Co., TX 100.00 1,190 Natural Gas

Total 10,890

Monday, July 20, 2009 MIDSTREAMNEWS11

TEXASBEE CO., TX PROPERTY1-Proposed Gas Well. ~121-Acres.NORMANNA (CONSOLIDATED)Producing From 1st Massive Wilcox. ~300 MCFDTotal Depth: 9,650 Ft.3.5% NonOperated WI; ~2.6% NRINet Production: 290 MCFD & 2.3 BOPDNet Cash Flow: $3,198/MnSELLER HAS MORE DATA

PP 2300DV

EAST TEXAS GATHERING SYSTEM8-Mile Gas Pipeline.MARSHALL/HARRISON AREANear Penn Virginia Well.MultiPay East Texas Reservoirs.Cotton Valley, Travis Peak. ETX PIPELINEHaynesville Development Possible.Pipeline Capacity: 10,000 MCFDMultiple Line Right-Of-Way.High Pressure Line.Interconnects w/ Two Main ETX Lines.SUBJECT TO PRIOR SALECONTACT SELLER FOR MORE INFO

G 1425PL

LAMPASAS CO., TX PIPELINE12.5-Miles Pipeline Project Needed.COPPERAS COVEExcavation Has Begun.Completion Expected In 90 Days.SEEKING PROJECT PARTICIPANTS100% WI Possible For Pipeline. PROJECTActive w/ New Production.Needs Max Capacity: 12 MMCFDPotential Cash Flow: $270,000/MnProved Reserves In Area.Operator Has Drilling Plan —— Needs Pipeline Development.CALL FOR MORE INFORMATION

G 6389PL

LAVACA CO., TX PROSPECT±121-Acres.Targeting Upper Wilcox. 10,000 Ft.Defined By AVO Response. 8.7 BCFE50% OPERATED WI; 75% NRI (Lease)Est Reserves: 2.4-8.7 BCFEDHC: ~$850,000; Compl: ~$450,000CALL GENERATOR FOR MORE INFO

DV 2316

TEXASNUECES CO., TX PROSPECT2-Prospects.SAXET FIELDObj 1: Middle Frio SndsObj 2: Anomalina & Tex-Miss Sands NONOP12.5% NonOperated WI; 73% NRIAnalog Field Cumm’d 0.75 BCF.Potential Rsrvs: 2.0 MMBO & 40 BCFDHC: $1,080,000CALL PLS FOR MORE INFORMATION

DV 6378

WISE CO., TX PROSPECT~732-Total Acres. 1-Proposed Well.READY TO DRILLHorizontal Barnett Shale. ~2,500 Ft.232-Acres Are HBP. BARNETT100-Acres On An Offset Barnett Tract.3-D Seismic Available.SEEKING JV PARTNERSSeller Will Deliver 80% NRI.Two Additional Wells If Successful.Est Rsrvs (1st Well): 3.0 MBO & 1.2 BCFEstimated AFE/Well: $2,500,000VIRTUAL DATA ROOM OPEN

DV 2280

LOUISIANAASSUMPTION PH., LA PROJECT~500-Acres.Targeting Stacked Pays.Plus 4 Secondary/Development Targets.Proposed Total Depth: 13,900 Ft. MULTIPAY3-D Seismic Controlled.SEEKING PARTNER TO DRILLPotential Rsrvs: 50 BCF Plus CondensateGENERATOR HAS MORE INFO

DV 2324

OKLAHOMATULSA CO., OK GATHERING SYSTEMShutIn Pipeline With Equipment. 10 Sq Miles.OKLAHOMA SYSTEMSignificant CBM Exploration Within Acreage.Shallow Coal Seam Gas Production.Low Pressure-Stripper Plant-Sales Lines.100% OPERATED WI FOR SALE CBM/PIPEShutIn Pipeline: Raw Unleased AcreageSuitable To: Production & Pipeline BuyerOptimal Scenario: Buy Pipeline & DrillSELLER HAS SOLID RIGHT OF WAYS

G 5617PL

APPALACHIAKENTUCKY PIPELINE PROJECT15-Mile Line.NonOperated WI Available. PIPELINEOPERATOR SEEKS CAPITAL

G 9090PL

APPALACHIAOVERTON & PUTNAM CO., TNNatural Gas Pipeline. 120-Mile System.DIRECT CONNECT TO MAJORShallow Gas Wells. 900 Ft. - 2,000 Ft. PIPELINEIn Area of MultiPay. Shows 7-Pay Zones.100% OPERATED WI FOR SALEPipeline Should Easily Take: 750 MCFDIn Area Of Deeper Exploration Activity.New Gas Available.Principals Only. Pipeline Only For Sale.

G 9000PL

MULTISTATEROCKIES & MIDCONTINENT SALE86-Total Producing Wells.SOUTHEAST COLORADOSOUTHWESTERN KANSASProducing From Multiple Zones. 1,000 MCFDSignificant UnDeveloped Acreage.100% OPERATED WI Available.Total Net Production: 1,000 MCFDNet Cash Flow: ~$116,700/MnNet PDP Reserves: 1.7 MBO & 3.6 BCFNet PV15 (Proved) Value: $7,212,000Pipelines & Facilities In Place.AGENT WANTS OFFERS JULY 15

PP 2358DV

OFFSHORE GULF OF MEXICOGULF OF MEXICO SHELF PROPERTY10-Gas Wells. 1-ShutIn.MAIN PASS & MOBILE AREASAll Of Seller’s OCS Leases Are HBP.Varying Working Interests. ~2.75 MMCFDOPERATED & NonOperated WI.Net Production: ~2.75 MMCFDQ1 Cumm’d Production: 185.33 MMCFMay 1, 2009 Effective Date.SELLER HAS MORE DETAILS

PP 2997

Increase Deal Flow & Business Opportunities:For subscription details at 713.650.1212

WantedAnonymous buyer seeks:Gulf Coast &Permian Basin Assets

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PLS’ Playmakers Symposium and E&P Summit is back and gearing up for another exciting event this October 20, 2009 at the Hilton of Americas Downtown, Houston, TX. The Summit will feature an all-star line-up of industry professionals actively involved inexploration and production.

This stellar event is a chance to hear from today’s industry leaders and playmakers whohave been weathering out volatile energy markets and, despite current conditions, haveexciting E&P plans ahead for 2009 and beyond.

By attending this event you will gain valuable insight on onshore, offshore and unconventional E&P initiatives such as who’s expanding exploration efforts, accessingcapital in tight credit markets, facilitating E&P through JVs and much more. . .

This unique Summit also includes an exclusive Playmakers Exposition for sponsors andselect prospect generators offering year-end prospects and projects for sale. The E&PSummit is the event for active industry executives, explorationists, deal-takers and playmakers. View our past playmakers agenda for more information atwww.plsx.com/playmakers2008.

This is an exciting event you won’t want to miss! For more information contactSamara Silverman at ssilverman@plsx.com.

Samara SilvermanDirector of Communications

& ConferencesFor More Information713-650-1212Email ssilverman@plsx.com

ssilverman@plsx.com

www.plsx.com/playmakers

PlaymakersComing Fall 2009

October 20, 2009 @ Hilton Americas, Houston, TX