Ralph L. Bradley had a lot of company when he went into the natural gas business in 1981, a time when gas prices were rising with no end in sight.

"You just could not have drilled a well at a worse time," said Bradley, president of Eastern States Exploration Co., a misplaced piece of the oil patch that has its headquarters in Alexandria.

"Everybody was in the oil and gas business, and oil was going to go to $95 a barrel... . We were drilling with the highest drilling costs the Appalachian wells had ever seen."

What happened, of course, is that what looked like the foothills one day turned out to have been the summit. Prices rose for about a year more, then leveled off, then dropped as users found alternatives and stopped buying.

Suddenly there was a lot of natural gas and few buyers.

"We had geological successes and economic disasters," said Bradley, recalling the company's early days. Since then, Eastern States Exploration has funded 20 exploration and development programs involving 202 wells in the Appalachian Basin in Pennsylvania.

Today, after several depressed years, the natural gas industry appears to be recovering. After dropping in 1986 to the lowest level since 1960, demand grew from 16.3 trillion cubic feet to 17 million last year, and prices have recovered along with increased consumption.

Like most of the industry, Eastern States is looking forward to better times this year. "We believe that the stage is set for a highly successful 1988," Bradley wrote recently to investors. Eastern States is privately held, with its drilling programs funded by joint ventures that become direct participants in the wells. The investors generally are involved in the oil and gas business, Bradley said.

For Eastern States, 1988 will represent continued progress rather than a turnaround, according to the company. While the industry was in a slump, Eastern States turned itself into a profitable, although small, gas producer. In 1985, it expanded with a marketing affiliate, Appalachian Gas Sales, to take advantage of a changed environment in which gas producers, instead of selling only to pipelines, became marketers themselves.

"You have to sell that gas," said Bradley, who ran H&B Products, a company specializing in energy management and industrial heat recovery, until the startup of Eastern States. "If you don't go out and market gas, you can't get a return on your investment... . If you just drill the gas and turn it over to the pipeline company, shame on you."

Eastern States produced its first profit in 1983. In 1986, the company earned $863,000 before taxes, and earnings for 1987 will surpass that, said Stevens V. Gillespie, the company's vice president and chief financial officer.

It was Eastern States' fortune and misfortune to run into difficult times in the industry at the outset, according to Bradley. "The shock we went through is one of the reasons we're in business today," he said. Instead of being stuck with an operation premised on high-priced gas, the company was able to restructure.

Eastern States' principal operations are in Pennsylvania, a state abundant in natural gas that can be reached by relatively shallow and inexpensive wells. Gary J. Hennen, formerly the Eastern District geologist for Adobe Oil and Gas Corp., directs drilling activities from the company's operations headquarters in Snow Shoe, Pa.

"They're aggressive, innovative and have been very fortunate in some of their exploration activities, so now they are a major player in Pennsylvania exploration and development," said Barry K. Cosey, executive director of Pennsylvania National Gas Associates, a producer group. Eastern States was recently elected to the association's board, Cosey said.

The company's exploration and drilling programs have focused on three counties in Pennsylvania: Clinton, Centre and Lycoming. "The oil and gas fields are slowly moving eastward in Pennsylvania," said Stephen Rhoads, executive vice president of the Pennsylvania Oil and Gas Association. "Slowly but surely, people like Eastern States are moving the known boundaries of the fields farther."

Eastern States also has an interest in oil and gas prospects in Virginia, West Virginia and Tennessee, but no active exploration programs.

Pennsylvania has long been a gas-producing region, but the productivity of its fields has been dwarfed by subsequent discoveries in the Southwest and other parts of the country. Still, the state produces a steady portion of the nation's natural gas supply and has the advantage of being close to major markets.

"Eastern States is an integrated, small, independent company," said an industry official with a major oil and gas company. "Not only do they do their own geology and geophysics, they acquire their own acreage, do their own production facilities work and their own gas marketing. They're a well-complemented independent operation, and they're enjoying success."

"One thing they have going for them is the area where they operate," he said. "The natural gas markets in the Northeast are more easily accessible, and there's more of a demand for natural gas." When cold paralyzes the Northeast, as it did in January, companies such as Eastern States can take advantage of increased spot market demand.

About 2 1/2 years ago, Eastern States signed a 10-year contract with Columbia Gas of Pennsylvania to provide gas for the State College, Pa., market. Eastern States provides about 4,700 thousand cubic feet (MCF) of gas a day at a current price of $2.40 an MCF. The production company also has a 15-year contract with Philadelphia Electric Co. to provide up to 15,000 MCFs of gas a day.

In addition to selling to local distribution companies such as Columbia Gas of Pennsylvania, Eastern States also is marketing directly to major users, sometimes using a local distribution company's system to deliver the gas. Eastern States and other producers have expressed interest in selling gas directly in the Washington area but have so far been held off by Washington Gas Light.

"What makes us different is that we have 200,000 acres in one contiguous play and two big contracts," said Bradley. The company has another advantage in that three of five major pipelines run across its acreage, Bradley said.

"While the rest of the industry was looking at a downturn, we had five years of significant growth," Bradley said.

"We've been able to adapt to what the industry is demanding of us. We pulled our horns in at the right time."