Coral Energy and Mountaineer Gas Sign Gas Supply and Management Deal.

HOUSTON--(BUSINESS WIRE)--Oct. 13, 1998--Coral Energy, L.P. and Mountaineer Gas Company announced today that they have finalized an agreement for Coral to become the principal natural gas supplier to Mountaineer, West Virginia's largest gas distribution company. Under the agreement, Coral also will manage virtually all of Mountaineer's total firm transportation and storage entitlements.

Effective November 1, 1998, Coral will begin supplying Mountaineer a substantial portion of its annual requirements for a three-year period. The gas will be supplied by Coral at a fixed price. Local gas supplies are not included in the agreement and will continue to be managed by Mountaineer.

Mountaineer awarded the contract subsequent to a settlement of a rate case with the West Virginia Public Service Commission that fixed the price of Mountaineer's sales for the next three years. Coral used its risk management capabilities to provide the fixed price to Mountaineer for the three-year period.

Coral's services will include management of Mountaineer's interstate transportation and storage entitlements on the Columbia Gas, Columbia Gulf and Tennessee Gas pipeline systems. The two companies will work together capitalizing on the synergy that comes from Mountaineer's local presence and Coral's physical supply and financial capabilities.

"Mountaineer and Coral have a history of working well together, and we recognize the benefits of expanding our working relationship in the future," said Mike Fletcher, president of Mountaineer Gas Company. "Coral provided the fixed price that we needed to lock in a price for our residential and small commercial customers over the next three years. In addition, our new supply partnership with Coral enhances the capabilities to provide expanded services by both companies in the future."

"Coral sees significant opportunities in taking its relationship with Mountaineer to the strategic partner level," said Jim Whalen, Coral chief operating officer. "This type of arrangement provides Coral the opportunity to bring its capabilities -- solid financial credentials, strong trading and optimization skills, and the systems and support to optimize value for both Mountaineer and Coral. We look forward to working with Mountaineer in providing gas to its customers and in developing new opportunities."

Mountaineer is a wholly owned subsidiary of Energy Corporation of America. It is headquartered in Charleston, W.Va. and serves approximately 200,000 customers, or an estimated 60 percent of the state of West Virginia.

Coral Energy, L.P., one of North America's largest natural gas, power and financial services companies, is an affiliate of Shell Oil Company, Tejas Energy, LLC, and Shell Canada Limited. Headquartered in Houston, Texas, and with offices throughout North America, Coral has natural gas sales of about 8 billion cubic feet per day.