West Texas Gas, Inc.

First Revised Volume No. 1

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Effective Date: 10/01/1996, Docket: RP96-377-000, Status: Effective

Original Sheet No. 32P Original Sheet No. 32P : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

19.5(j) Annual PGA Filing (Continued):

(3) Adjustment. Seller shall use the first exchange-

out quantities or exchange-in quantities of the current month to

offset any net exchange imbalance that occurred in a prior month.

If the cumulative imbalance at the end of the month was a net

exchange-in, Seller shall balance the net exchange-in with

the first exchange-out quantities given. If the cumulative

imbalance at the end of the month was a net exchange-

out, Seller shall balance the net exchange-out with the

first exchange-in quantities received. The rate

for valuing the current month's balancing quantities will be

equal to the WACOG of the prior month. If Seller is unable

to offset the prior month's exchange imbalances with a current

month's exchange quantities, it must carry the imbalance forward

through the deferral period until balancing occurs. Until

balancing is achieved, the rate for valuing each month's

balancing quantities will be the WACOG of the month when the

imbalance occurred. Seller shall assign the current month's

WACOG to any quantities not used to offset a prior month's

exchange imbalance.