Wexford Capital LLC Sends Letter to The Houston Exploration Company's Board of Directors Calling for a Sale of the Company Via

GREENWICH, Conn., July 5  /PRNewswire/ -- Wexford Capital LLC today announced that it has sent a letter to The Houston Exploration Company (NYSE:THX) urging the Board of Directors to undertake a fair, open and thorough auction process to sell the Company and maximize shareholder value.

Following is a letter sent today from Robert Holtz, a Principal of Wexford Capital LLC, to the Board of Directors of The Houston Exploration Company:

  July 5, 2006

  William G. Hargett, Chairman, CEO & President
  Robert B. Catell, Director
  John U. Clarke, Director
  David G. Elkins, Director
  Harold R. Logan, Jr., Director
  Thomas A. McKeever, Director
  Stephen W. McKessy, Director
  Donald C. Vaughn, Director
  Houston Exploration Co.
  1100 Louisiana Street
  Suite 2000
  Houston, TX 77002-5215

  Gentlemen:



We are writing regarding the recently announced bid by Jana Partners LLC to acquire the shares of Houston Exploration Co. (the "Company"), and the Company's announcement that it is exploring strategic alternatives to enhance shareholder value.  By way of background, Wexford Capital LLC is an SEC registered investment advisor that manages a series of affiliated investment funds (collectively, "Wexford"). At present Wexford has over $5 billion in assets under management and holds over 400,000 shares of the Company's stock representing over a 1.5% interest in the Company.

As a substantial institutional shareholder of the Company, we urge the Board of Directors to undertake a fair, open and thorough auction process to sell the Company and maximize shareholder value.  In our view the Company is a highly attractive acquisition target, which can provide substantial synergies and other benefits to a wide range of potential acquirers.  Moreover, recent M&A activity suggests that now is a particularly opportune time to pursue such an auction, and that a sale of the Company will provide the greatest value to its shareholders.

We are encouraged by the Company's retention of Lehman Brothers as its financial advisor, since we believe that firm is well suited to conduct an auction of the Company.  We encourage the Board to announce that the Company will pursue a sale and to direct Lehman Brothers to promptly commence the auction process.

  Sincerely,

  /s/ Robert Holtz

  Robert Holtz
  Principal

  About Wexford Capital LLC


Wexford Capital LLC is an SEC registered investment advisor with over $5 billion of assets under management.  The firm, which was formed in 1994, manages a series of hedge funds and private equity funds from its Greenwich, CT headquarters.  For more information, visit the Company's web site at http://www.wexford.com/ . 

DATASOURCE: Wexford Capital LLC



CONTACT:  Marc Leferman of Wexford Capital LLC, [phone] 



Web site:  http://www.wexford.com/ 

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