Falcon Gas Storage Company Plans Open Season at Worsham-Steed Gas Storage Facility

Business Wire, August 17, 2004

HOUSTON -- Falcon Gas Storage Company Inc. today announced that up to 8 Bcf of storage capacity is available at its Worsham-Steed Gas Storage Facility west of Dallas/Ft. Worth in Jack County, Texas. The open season starts today and will end on Aug. 31, 2004.

Injection capacity of up to 60,000 MMBtu/day is available for seasonal storage and short-term "parking" of gas supply inventory for the upcoming winter. Withdrawal rates will depend on the level of firm contractual commitments received during the open season, but generally are expected to be in the range of 30,000 MMBtu/day for the 2004-2005 winter season. Higher rates of injection and withdrawal will be available starting in the second quarter of 2005 if Falcon receives sufficient customer interest during the open season.

"We originally had planned on bringing Worsham-Steed capacity fully on line in the second quarter of 2005," said Jeff Foutch, Falcon's vice president of marketing and business development. "However, the current steep contango spread in the forward NYMEX natural gas price curve has sparked a lot of immediate interest in gas storage. We are just about sold out of firm capacity for this winter at our Hill-Lake Gas Storage Facility in North Texas, so we have decided to offer capacity at our Worsham-Steed facility for this winter as well.

"Worsham-Steed connects to some of the same pipelines as our Hill-Lake facility and will provide additional operating flexibility for our customers in the Dallas/Ft. Worth and North Texas markets," Foutch continued. "We will have limited capacity available at Worsham-Steed for this winter, with full operating capacity expected to be available late next spring or early next summer. The bottom line is that there is strong demand for gas storage capacity in the Dallas/Ft. Worth and North Texas markets and, fortunately, we are in a great position to fill that need."

For further information regarding the open season, please contact Jeff Foutch, Kirby Black or Jim Wagner at 713-961-3204.

About Falcon Gas Storage Company Inc.

Houston-based Falcon Gas Storage Company is the largest independently-owned developer and operator of high-deliverability, multi-cycle natural gas storage capacity in the United States. Through wholly-owned subsidiary Greyhawk Gas Storage Company, LLC, Falcon is developing the Wyckoff Facility, an HDMC gas storage project in New York, and the MoBay Storage Hub in Alabama, an HDMC gas storage project that will serve markets in Florida and the southeast. Falcon is the largest privately owned storage provider in Texas with more than 20 Bcf of working gas storage capacity. Visit Falcon at www.falcongasstorage.com.