Harbinger Group Inc.
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SEC Filings

PRER14A
HRG GROUP, INC. filed this Form PRER14A on 11/14/1995
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marketplace. This equalization process was implemented through negotiated
settlements in individual pipeline service restructuring proceedings, designed
specifically to "unbundle" those services (e.g., transportation, sales and
storage) provided by many interstate pipelines so that producers, consumers,
marketers and other industry participants could secure services from the most
economical source, whether interstate pipelines or other parties. The result of
the FERC initiatives has been to substantially reduce or bring to an end the
interstate pipelines' traditional role as wholesalers of natural gas in favor
of providing only natural gas storage, transportation and related services. The
restructuring proceedings resulting from Order 636 continued throughout 1994,
with all pipelines having received FERC orders approving their compliance
filings, subject to conditions, and all such pipelines having implemented these
new services.
 
  Although Order 636 does not regulate gas producers such as the Company, Order
636 was intended to foster increased competition within all phases of the
natural gas industry. It is unclear what impact, if any, increased competition
within the natural gas industry under Order 636 will have on the Company as a
producer. Furthermore, although the FERC earlier denied a stay of the
effectiveness of Order 636, thus assuring that its requirements will be
implemented, because the requirements of Order 636 were implemented through
individual restructuring proceedings on a pipeline-by-pipeline basis, it is
impossible to predict what effect, if any, Order 636 ultimately will have on
the Company and its gas marketing efforts. Numerous petitions seeking judicial
review of the FERC's Order 636 series of orders have been filed and remain
pending. Because the restructuring requirements that have emerged to date from
this lengthy administrative and judicial review process are in some instances
different from those of Orders 636, as originally promulgated and modified on
rehearing, it is not possible to predict what effect, if any, the final rule
resulting from these Orders will have on the Company.
 
  Under the NGA, facilities used for and operations involving the processing of
natural gas are exempt from FERC jurisdiction. Facilities used for and
operations involving the production and gathering of natural gas are exempt
from the FERC's NGA jurisdiction, while facilities used for and operations
involving interstate transmission are not. State regulation of gathering
facilities generally includes various safety, environmental and, in some
circumstances, nondiscriminatory take requirements. While some states provide
for the rate regulation of pipelines engaged in the intrastate transportation
of natural gas, such regulation has not generally been applied against
gatherers of natural gas. However, Oklahoma has recently enacted legislation
that prohibits the imposition of unjustly or unlawfully discriminatory
gathering rates. Natural gas gathering, especially when performed by interstate
pipelines or their affiliates, has received greater regulatory scrutiny
following the pipeline industry restructuring under Order No. 636, but state
and federal agencies have been receptive to a broader examination of all
gathering service providers, and the Company cannot predict whether, or to what
extent, this scrutiny will lead to further regulatory action affecting
Cimarron's independent gathering business.
 
  The U.S. Oil Pollution Act of 1990 ("OPA '90") and regulations promulgated
thereunder impose a variety of regulations on "responsible parties" related to
the prevention of oil spills and liability for damages resulting from such
spills. A "responsible party" includes the owner or operator of a facility or
vessel, or the lessee or permittee of the area in which an offshore facility is
located. OPA '90 assigns liability to each responsible party for oil removal
costs and a variety of public and private damages. While liability limits apply
in some circumstances, a responsible party for an Outer Continental Shelf
facility must pay all spill removal costs incurred by a federal, state or local
government. OPA '90 also imposes ongoing requirements on a responsible party,
including proof of financial responsibility to cover at least some costs in a
potential spill and preparation of an oil spill contingency plan. The effect of
OPA '90 on offshore oil and gas operators is uncertain because the Minerals
Management Service ("MMS") has not yet finalized implementing regulations under
OPA '90. The Company cannot predict the final form of the financial
responsibility regulations that will be adopted by the MMS, but such
regulations have the potential to result in the imposition of material costs.
 
  The Company's domestic oil and gas operations are subject to extensive state
and federal regulations which have increased the cost of doing business by
requiring additional equipment or methods to eliminate
 
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