OT05406 - PRT: valuation of non-arm's length disposals and appropriations - gas - valuation of light gases from 1 January 1994 - other elements

Contracts still include provisions for differential pricing for excess gas and shortfall gas. The LB Oil & Gas would generally expect inter-affiliate contracts to contain similar provisions. The level of pricing differential or methodology to be used depends on that seen in the arm’s length market. There may be other reasons why a price should be discounted, such as offshore constraints which affect the quantities of gas which are deemed to form the daily contract quantity. Any such items will be considered in the light of companies’ representations.