Harbinger Group Inc.
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SEC Filings

HRG GROUP, INC. filed this Form POS AM on 02/22/1994
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of oil and gas have reflected a worldwide surplus of supply over demand.  From
time to time, the Company has curtailed its gas production in response to the
low price of gas.     
     Market conditions for oil and gas are the result of a number of factors
outside the control of the Company, including changing economic conditions,
seasonal weather conditions, loss of markets to alternative fuels, increased
foreign production, government regulation and the failure or success of members
of OPEC to agree to and maintain price and production controls.  Historically,
demand for, and prices of, natural gas are seasonal, generally peaking in the
winter when heating requirements are highest.     
     Substantially all of the Company's natural gas production in the United
States is sold on the spot market, principally to independent natural gas
marketers.  During each of the last three fiscal years, no purchaser of the
Company's oil and gas production accounted for more than 10% of the Company's
total consolidated revenues (including revenues attributable to the Company's
discontinued offshore drilling operations).  The Company believes that the loss
of any individual purchaser would not have a material adverse effect on the
     Competition.  The Company faces significant competition in its oil and gas
operations.  The Company's competitors in its producing efforts include major
oil and gas production companies and numerous independent oil and gas companies,
individuals and drilling and income programs.  The Company's competitors in its
marketing efforts include other oil and gas production companies, major
interstate pipelines and their marketing affiliates, and national and local gas
gatherers, brokers, marketers and distributors of varying sizes, financial
resources and experience.  Certain competitors, such as major oil and gas
production companies, have financial and other resources substantially in excess
of those available to the Company.     
     Governmental Regulation.  Because its producing properties are located on
the federally controlled Gulf Coast portions of the Outer Continental Shelf,
various aspects of the production and sale of the Company's oil and gas are
regulated by federal authorities.  Offshore operations and attendant government
royalty matters are within the jurisdiction of the Minerals Management Service,
an agency within the Department of the Interior.  Historically, all of the
Company's domestic natural gas was sold in so-called "first sales" and was
subject to certain of the pricing and other provisions of the Natural Gas Policy
Act of 1978 (the "NGPA"), the Natural Gas Act (the "NGA"), and the regulations
and orders issued by the FERC in implementing those Acts.  Under the Natural Gas
Wellhead Decontrol Act of 1989 ("Decontrol Act"), all remaining natural gas
wellhead pricing, sales certificate and abandonment regulation of first sales by
the FERC was terminated on January 1, 1993.  Prior to statutory deregulation,
the Company utilized the procedures contained in FERC Order No. 490, issued in
early 1988, to achieve the required abandonment of some of its previous gas
sales, and subsequently used the automatic FERC certificate authority of that
order to sell those volumes for resale in interstate commerce.  Order No. 490
has been on appeal to the U.S. Court of Appeals for the Sixth Circuit for a
considerable length of time; however, in light of favorable Supreme Court review
of relevant portions of other analogous FERC rulemakings, motions have been
filed at the Sixth Circuit seeking termination of that appeal.  Further action
on those motions is pending.  The Company cannot predict whether Order No. 490
will be upheld, if reviewed by the appellate court, but does not anticipate any
material adverse effect upon the marketing of the Company's natural gas
production as a result of that review.     
     The FERC also regulates interstate natural gas pipeline transportation
rates and service conditions, which affect the marketing of gas produced by the
Company, as well as the revenues received by the Company for sales of such
natural gas.  This regulation is pursuant to the NGA, the NGPA and, to the
extent of operations on the Outer Continental Shelf, the Outer Continental Shelf
Lands Act (the "OCSLA").  Under the OCSLA, all gathering and transporting of gas
on the Outer Continental Shelf must be performed on an "open and non-
discriminatory" basis.  While the NGA and NGPA do not contain precisely the same
standard, since the latter part of 1985, through its Order No. 436 and Order No.
500 rulemakings, the FERC has endeavored to make on-shore natural gas
transportation more accessible to gas buyers and sellers on an open and non-
discriminatory basis, and the FERC's efforts have significantly altered the
marketing and pricing of natural gas.  Recently, the FERC has taken action to
require those interstate pipelines which operate offshore on the Outer
Continental Shelf to operate in a manner consistent with the FERC's regulations
governing onshore operations.  Another related effort has been made with respect
to intrastate pipeline operations pursuant to the FERC's NGPA  (S)311 authority,
under which the FERC establishes rules by which intrastate pipelines may
participate in certain interstate activities without becoming subject to full
NGA jurisdiction.  These Orders have gone through     


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