11. GAS RESERVES

We have invested $188 million through our gas reserves program in the Jonah Field located in Wyoming as of December 31, 2015. Gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits recorded as liabilities on the balance sheet. Our investment in gas reserves provides long-term price protection for utility customers and currently incorporates two agreements: the original agreement with Encana Oil & Gas (USA) Inc. under which we invested $178 million and the amended agreement with Jonah Energy LLC under which an additional $10 million was invested.

We entered into our original agreements with Encana in 2011 under which we hold working interests in certain sections of the Jonah Field. Gas produced in these sections is sold at prevailing market prices, and revenues from such sales, net of associated operating and production costs and amortization, are credited to the utility's cost of gas. The cost of gas, including a carrying cost for the rate base investment, is included in our annual Oregon PGA filing, which allows us to recover these costs through customer rates. Our net investment under the original agreement earns a rate of return.

In March 2014, we amended the original gas reserves agreement in order to facilitate Encana's proposed sale of its interest in the Jonah field to Jonah Energy. Under the amendment, we ended the drilling program with Encana, but increased our working interests in our assigned sections of the Jonah field. We also retained the right to invest in new wells with Jonah Energy. The amended agreements allow us to invest in additional wells on a well-by-well basis with drilling costs and resulting gas volumes shared at our amended proportionate working interest for each well in which we invest. We elected to participate in some of the additional wells drilled in 2014, and may have the opportunity to participate in more wells in the future.

In September 2015, the OPUC adopted an all-party settlement, under which volumes produced from the additional wells drilled in 2014 are included in our Oregon PGA beginning November 1, 2015 at a fixed rate of $0.4725 per therm, which approximates the 10-year hedge rate plus financing costs at the inception of the investment.

Gas reserves acted to hedge the cost of gas

for approximately 11% and 10% of our utility's gas supplies for the years ended December 31, 2015 and 2014, respectively.

The following table outlines our net gas reserves investment at December 31:



In thousands	2015		2014
Gas reserves, current	$	17,094	$	20,020
Gas reserves, non-current	170,453		167,190
Less: Accumulated amortization	55,901		37,910
Total gas reserves⁽¹⁾	131,646		149,300
Less: Deferred taxes on gas reserves	27,203		18,551
Net investment in gas reserves⁽¹⁾	$	104,443	$	130,749


⁽¹⁾	Our investment in additional wells included in total gas reserves was $8.0 million ($4.3 million net of deferred taxes) and $9.2 million ($8.4 million net of deferred taxes) at December 31, 2015 and December 31, 2014, respectively.

Our investment is included on our balance sheet under gas reserves with our maximum loss exposure limited to our current investment balance.