Calpine Completes Sale of Rocky Mountain Gas Reserves

Calpine has completed the sale of its natural gas reserves in the Colorado Piceance Basin and New Mexico San Juan Basin for approximately $223 million. As previously announced, two U.S. gas companies acquired these assets for approximately $140 million and approximately $83 million, respectively, less adjustments to reflect a July 1, 2004 effective date.

Together, these assets represent approximately 120 billion cubic feet equivalent of proved gas reserves, producing approximately 16.3 million net cubic feet equivalent per day of gas. Net proceeds from these sales will be used to reduce the amount outstanding under Calpine's existing $500 million first lien indebtedness. In conjunction with these sales, Calpine anticipates recognizing a pre-tax gain of approximately $100 million.