Calpine Evaluating Strategic Alternatives for its Natural Gas Assets

Calpine is currently evaluating strategic alternatives for its U.S. natural gas assets, including the potential sale of all or a portion thereof.

Calpine's natural gas assets are primarily located in the Sacramento Basin of California, south Texas and the Gulf of Mexico, with additional significant activity in Colorado, New Mexico and Utah. As of December 31, 2004, the company had 389 billion cubic feet equivalent of proved gas reserves. Calpine's natural gas land interests currently include 386,674 net developed and undeveloped acres. The company's assets currently produce approximately 90 million cubic feet equivalent per day from 607 net wells.

Net proceeds from any sale of the natural gas assets would be used in accordance with Calpine's existing bond indentures.

Calpine Corporation is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power plants. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. The company is listed on the S&P 500. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN.