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To: upanddown who wrote (68300)	6/16/2000 6:33:00 AM
From: jim_p	Respond to of 95453

John, My estimate of DCFPS includes the hedges currently in place. The acquisition more than doubles the companies gas production, and will more than double the companies cash flow per share. The company is required to hedge 30 MMcfd of the production they acquired (currently producing at 49 MMcfd) for a period of five years at a price not less than $2.60 per Mcf pursuant to their credit agreement with B of A. Their gas production in the last ended March 31, averaged 44.9 MMcfd. (g) Hedge Transactions. In addition to existing Hedge Transactions currently in place under the Existing Credit Agreement, Borrower shall have additionally entered into Hedge Transactions with respect to production from the CMS Properties which shall in all events provide Borrower a fixed NYMEX price that equals or exceeds $2.60 per thousand cubic feet covering not less than thirty million cubic feet per day of Borrower's and its Subsidiaries' production of natural gas for a period of not less than five (5) years (such period shall be measured from the effective date of each separate Hedge Transaction), and such Hedge Transactions to otherwise be on terms and conditions satisfactory to Administrative Agent and Banks. I don't like hedging, but with a company of this size and leverage from the acquisition, they have no choice. Jim