Ned, the table below shows indicative values for the subject transaction.



The assumptions used to derive these values are as follows:
ES owns 3.9 Bcf of gas in storage at a WACOG of $2.30/MMBtu.
The gas will be withdrawn at a rate of 0.487 Bcf/month starting in Jun'02.
In the "Full Hedge" scenario we sell futures to match the withdrawal rate 
(487,000/month in Jun'02 through Dec'02 and 468,000 in Jan'03.)
In the "Partial Hedge" scenario we sell futures at an 80% ratio to the Full 
Hedge scenario.
In the "w/o Hedge" scenario the mark would get adjusted continually with 
market price movement.  Also, the average monthly volatility and expected 
high/low value is simply to demonstrate a range of possible outcomes.  As 
these months move closer to prompt their volatility could (and probably will) 
increase resulting in larger than stated (but currently unknown) swings in 
value.  (Ned, as we discussed, I simply adjusted the transaction value by the 
volatility %.  This methodology may need more work.)
In the "Options" scenario, a significant amount of the transaction value 
would be consumed buying [ATM] calls.  Also, I think selling futures and 
buying calls is the same as buying puts (synthetic option) so we should ask, 
would we buy puts as part of the "hedge?" 

Let me know if you need more information.

Louis