The type of transaction to be considered is the sale of a large reserve of high pressure (over 1,000 pound) gas well gas to an interstate market. Delivery will be to a transmission line for transportation and resale outside of the state. Such sales are now under the jurisdiction of the Federal Power Commission.

My presentation will, I hope, be slightly different from the type that has become customary of late years. I don't intend to lay down a barrage of statistics showing how interstate natural gas sales have increased from one trillion cubic feet in 1944 to 6.5 trillion in 1959, or how 16 billion dollars have been spent during this 15 years to build pipelines—now measuring nearly 900,000 miles—you are all as familiar with these figures as I.

There is, however, one statistic which is of tremendous importance to us all in the industry, as well as to the 32 million consumers of natural gas in the United States. This is that during this period the average field price of gas has increased from around 6.8cts to 14cts/MCF. Producers are, as a matter of fact, actually negotiating sales now at around 24cts/MCF, including tax reimbursement, in South Louisiana. While this increase causes concern on the part of Distributors and Consumers, it also causes Management of the Producing Companies to look more closely at the contracts we negotiate.

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