HOUSTON, Nov. 30 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS) today
reported that it has contracts with Enron (NYSE: ENE) for derivative
instruments covering 6,390,000 Mmbtu of gas production, with terms beginning
in December 2001 and extending through October 31, 2002, and basis swaps
covering 120,000 Mmbtu for the first quarter of 2002. The ultimate value of
these contracts depends on the settlement price in each of the months for
which volumes are hedged. However, based on yesterday's closing NYMEX prices,
if Enron is unable to fulfill its obligations, the impact would be
approximately $0.4 million on the 4th quarter and $2.4 million on 2002. In
addition to these hedges, KCS is uncertain whether it will receive full
payment for oil and gas sold through Enron entities in the fourth quarter.
The Company's exposure related to this uncertainty is currently estimated to
be approximately $1.0 million. KCS has ceased all sales of oil and gas to
Enron due to the uncertainty of Enron's ability to perform under its
contracts.
KCS is an independent energy company engaged in the acquisition,
exploration and production of natural gas and crude oil with operations in the
Mid-Continent and Gulf Coast regions. The Company also purchases reserves
(priority rights to future delivery of oil and gas) through its Volumetric
Production Payment program. For more information on KCS Energy, Inc., please
visit the Company's web site at http://www.kcsenergy.com .
To receive KCS' latest news and other corporate developments via fax at no
cost, please call 1-800-PRO-INFO. Use company code KCS. See also
http://www.frbinc.com .
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Among the important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements are delays and difficulties in developing currently
owned properties, the failure of exploratory drilling to result in commercial
wells, delays due to the limited availability of drilling equipment and
personnel, fluctuations in oil and gas prices, general economic conditions and
the risk factors detailed from time to time in the Company's periodic reports
and registration statements filed with the Securities and Exchange Commission.
SOURCE KCS Energy, Inc.
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Related links:
http://www.frbinc.com
http://www.kcsenergy.com
CONTACT:
James W. Christmas, President and CEO of KCS
Energy, Inc., +1-713-877-8006; or general info, Marilynn Meek,
+1-212-445-8451, or media, Judith Sylk-Siegel, +1-212-445-8431,
or analysts, Beth Lewis, +1-617-369-9242, all of FRB Weber
Shandwick for KCS Energy, Inc.
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