What is Natural Gas Deregulation? Regulation allows and controls the monopoly of a single local company to supply Natural Gas to all users in a certain area, so called Local Distribution Companies or LDCs like Oklahoma Natural Gas (ONG). Deregulation allows other companies to offer Natural Gas in this same area, so called Third-Party Natural GasMarketers, like PANOAK, SAVING YOU MONEY!

The CHOICE PROGRAM simply allows PANAOK to manage transportation service on your behalf and sell you Natural Gas sourced by PANOAK on the LDC’s (like ONG) delivery system. You will continue to pay the LDC a transportation and service fee for deliveries of Natural Gas, as well as maintenance of the physical facilities delivering Natural Gas to you, just like today. These charges are already part of your current Natural Gas bill and will NOT increase after you start buying your Natural Gas from PANOAK. Your Natural Gas will still be transported and delivered through the LDC system but PANOAK would bill you for the Natural Gas portion of your bill at a SUBSTANTIALLY LOWER price than the LDC.

LDCs like ONG make money on transport and delivery not the Natural Gas itself. Therefore, they not only allow customers to switch they encourage it. Customers can even call ONG and discuss it with them. ONG wants you to switch. Call Brain Horner at ONG at 405-551-6736 and see for yourself.

Will my facility be cut off if PANOAK fails to deliver gas? NO, in the highly unlikely event that we are unable to deliver gas to your facility, the LDC like ONG is required by law to continue to supply your facility from their system gas and simply take over the billing. NO customer has ever been left without gas on the LDC system. Since PANOAK controls its own gas supply, it is highly improbable that we would be unable to supply you with gas. How can PANOAK deliver gas at a substantially lower price than LDCs? PANOAK is able to buy gas supplies for its customers at current market prices. LDCs cost of gas includes additional costs associated with LONG-TERM reservation fees, capacity fees and storage, all of which add to their cost basis.

Will the LDC price ever be lower than the PANOAK price? Possible, but not likely. For example, historically, the ONG (LDC) price has inverted and been lower than the OGT (Transportation Pipeline / ONEOK Gas Transportation) INDEX only 2 months throughout the past 15 years.

Who will physically deliver gas to my facility? The LDC like ONG will continue to be the physical transporter of your gas supply. PANOAK will deliver gas for your account into the LDC system.

Who do I call in a gas emergency, like if I smell gas / have a leak? You will still call the local gas company / LDC, like ONG, for any emergency, service call or turn on / off situation just like today.

Will PANOAK know how much gas my facility is using? YES, PANOAK will have the ability to monitor your daily gas usage through the LDC web-enabled measurement system.

Will an LDC like ONG be upset if I purchase gas from PANOAK instead of them? NO, LDCs sponsor the CHOICE PROGRAM with the State’s Corporation Commission to allow their customers consuming 1,000 Dth or more annually to buy their gas from third-party gas marketers on their system. They not only allow it, they encourage it because they make money on delivery and NOT the gas itself. Call ONG’s Brain Horner (bhorner@ong.com) at 405-551-6736 to verify. February 12, 2003 -- ONG President Sam Combs told the Oklahoma Corporation Commission , "Our business is gas delivery, not gas sales. ONG is not allowed by tariff regulations to profit from natural gas sales. It makes economic sense for ONG to deflect some gas expenses to more efficient 3rd party gas suppliers. Large-volume natural gas customers have long profited from the ability to buy gas from non-utility suppliers and pay ONG a transportations-only rate to the point of consumption. Since 2003, ONG has encouraged qualified smaller-volume natural gas customers to take advantage of the available savings by buying from nonutility gas suppliers. ONG promotes 3rd party supply of natural gas to help customers save money.”

How does the LDC like ONG get paid? The LDC like ONG will continue to charge the same transportation and service fees, currently a portion of your gas bill, for the physical delivery of your gas supply, just like today. Will the transportation and service fees increase because I’m buying gas from PANOAK? NO, these fees are the same no matter who supplies the gas and are dictated by the LDC’s pipeline tariff, like ONG’s Tariff 291T and 255T, on file with the State Corporation Commission and cannot change. How will I get billed? You will receive a detailed bill from PANOAK showing monthly usage, unit cost of gas and the total amount due. The LDC like ONG will send you a bill for their transportation services only. You will receive 2 separate bills following the switch, one for delivery and one for gas.

How does PANAOK obtain its gas supply? PANOAK controls its own gas supply. We have our own wells and equity gas supply representing numerous other gas producers as well as our own pipeline company connecting us to the major pipelines and gas suppliers all across North America.

Who at ONG can I contact for verification of this program? Brain Horner (bhorner@ong.com) at 405- 551-6736.

What is the First ofMonth Inside FERC INDEX Price? The Inside FERC (Federal Energy Regulatory Commission) INDEX is a monthly publication that reflects the average market price paid for gas supplies on different pipeline systems in the producing states. For example, Inside FERC publishes a monthly INDEX for OGT (ONEOK Gas Transportation), the upstream pipeline serving ONG. Gas Marketing companies like PANOAK base their customer pricing on the INDEX price plus an agreed-to MARK UP.

Could a cost analysis be done by PANOAK to show the exact savings my company would realize by buying its gas through PANOAK? YES, simply give your current LDC (like ONG) account number to PANOAK and we would be more than happy to put together a 12-month cost savings analysis for you. See PANOAK Sales for more information. sales@panoak.com or call 877-PANOAK GAS.