News Release
Oct. 08, 2001

DUKE ENERGY ANNOUNCES NEW EXPLORATION PARTNERSHIP WITH HOUSTON ENERGY, INC. -- ELITE EXPLORATION, LP

HOUSTON -- Duke Energy Hydrocarbons, a wholly owned subsidiary of Duke Energy, announced today a new exploration partnership with Houston Energy, Inc., to be called Elite Exploration, LP. Elite Exploration will develop exploration prospects in the Gulf Coast of Texas and Louisiana and on the outer continental shelf, offshore Louisiana and Texas.

Under the terms of the partnership, Duke Energy Hydrocarbons will underwrite the cost of the staff and technical data. Houston Energy will provide the prospect generation capability and day-to-day oversight.

"Duke Energy is pleased to be entering into this partnership with Houston Energy," said Mike Kimner, president of Duke Energy Hydrocarbons. "Houston Energy is a proven prospect generator. The new business relationship will seek to maximize the strengths of both companies by integrating the leading prospect generation capabilities of Houston Energy with the advanced energy-marketing and commodity-price risk management capabilities of Duke Energy."

Ron E. Neal, Houston Energy co-founder, general partner and exploration geologist, stated, "This venture is a great opportunity for Houston Energy to expand its Gulf Coast area exploration program. Houston Energy seeks to create and assemble quality drilling opportunities based on a thorough integration and refinement of all available data. We could not be more delighted with the quality partner we have in Duke Energy."

Houston Energy, Inc. (HEI) is an independent oil and gas exploration company exploring the offshore Gulf of Mexico, Louisiana, and Texas Gulf Coast, and West Texas/Southeastern New Mexico. The mission of HEI is to economically find and develop oil and gas reserves for its partners. HEI is a privately owned Texas Subchapter S corporation formed in March 1988 by Ronald E. Neal and Frank W. Harrison, III. Additional information about the company is available on the Internet at: www.houstonenergyinc.com.

Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses -- generating revenues of more than $49 billion in 2000. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.

Contact: Deborah Witmer
Phone: 713/627-5848
24 Hour Phone: 704/382-8333
Email: dfwitmer@duke-energy.com