9108012 Informal Interpretation

August 14, 1991

BY HAND

Premerger Notification Office

Bureau of Competition

Federal Trade Commission

600 Pennsylvania Avenue, NW, Room 303

Washington, D.C. 20580

Re:

Dear Mr. Elmore:

This is to confirm our recent conversation on the application of the Hart-Scott-Rodino Act and the Federal Trade Commissions implementing regulations to a proposed transaction.

Our client is a company engaged in the natural gas business. It sells natural gas and also develops natural gas reserves. As part of its business, from time to time it buys and sells rights to natural gas reserves.

As I outlined to you over the telephone, our client is contemplating the acquisition of gas reserves from another company that is also in the natural gas business. These are proven reserves they are known and identifiable, but the surface infrastructure is not yet in place to begin extracting the reserves from the ground. No natural gas has ever been extracted from these reserves and they have never produced income.

The question I raised with you is whether this transaction could properly be treated as a transfer of realty in the ordinary course of business, which would be exempt from the Hart-Scott-Rodino premerger notification requirements under 16 C.F.R. Section 802.1. You advised that the transaction would be exempt under Section 802.1 because these gas reserves have not generated a stream of income. You stated that ordinary course of business exemption would be available until and unless the reserves are generating income.

Please advise me immediately if I have misunderstood your advice on this proposed transaction.

Thank you for your assistance.

Sincerely,

(Redacted)

cc: (redacted)