Enerfax Daily
NORTH AMERICA'S FREE POWER AND GAS INFORMATION SOURCE 
   Tuesday, February 5 2002 No. 927
Visit: http://www.enerfax.com  to view our web version or for Oil Prices & News http://www.enerfaxgold.com 

PHYSICAL NATURAL GAS PRICES   
Gulf/Eastern Region     
| Agua Dulce              | 2.04  |
| ANR SE                  | 2.12  |
| Carthage TG             | 2.11  |
| Chicago Citygate        | 2.17  |
| Columbia Gulf Onshore   | 2.17  |
| Dominion South Point    | 2.37  |
| Henry Hub               | 2.18  |
| Houston Ship Channel    | 2.16  |
| Katy Hub                | 2.10  |
| NGPL LA Pool            | 2.12  |
| NGPL - Midcontinent     | 2.05  |
| NGPL STX                | 2.07  |
| NGPL TX/OK              | 2.09  |
| NNG Demarc.             | 2.12  |
| Niagara                 | 2.41  |
| Sonat Tier 1            | 2.13  |
| TCO IPP Pool            | 2.28  |
| Tetco ELa               | 2.13  |
| Tetco M-3               | 2.64  |
| Tetco STX               | 2.07  |
| TGP Zone 0              | 2.06  |
| TGP Zone 1 (500 Leg)    | 2.13  |
| TGT Zone SL             | 2.16  |
| New York Citygate       | 2.93  |
| Transco Station 65      | 2.21  |
| Transco Zone 6 (NY)     | 2.92  |
| Trunk ELa               | 2.11  |
| Western Region          
| California Border       | 2.17  |
| El Paso Keystone        | 2.04  |
| El Paso San Juan-Blanco | 2.05  |
| Waha Hub                | 2.06  |
| Canadian/Rockies Region 
| Nova/Aeco (C$/gig)      | 2.84  |
| Dawn Hub/Union          | 2.28  |
| Northwest Stanfield     | 2.00  |
| Wyoming Pool            | 1.90  |
| Opal                    | 1.90  |
| PGT-Malin               | 2.09  |
| Sumas                   | 1.97  |
Flow Date 2/5
-------------------------------------------------------------
NATURAL GAS FUTURES
Henry Hub 
12 Month Strip  2.5016  -0.0140       
18 Month Strip  2.6023  -0.0098    
| Month | High  |  Low  | Close | Change |
| MAR   | 2.150 | 2.080 | 2.117 | -0.021 |
| APR   | 2.215 | 2.150 | 2.184 | -0.014 |
| MAY   | 2.270 | 2.220 | 2.252 | -0.014 |
| JUN   | 2.330 | 2.296 | 2.317 | -0.014 |
| JUL   | 2.400 | 2.365 | 2.377 | -0.014 |
| AUG   | 2.450 | 2.420 | 2.432 | -0.014 |
| SEP   | 2.450 | 2.420 | 2.432 | -0.014 |
| OCT   | 2.475 | 2.440 | 2.459 | -0.011 |
| NOV   | 2.700 | 2.670 | 2.679 | -0.016 |
| DEC   | 2.900 | 2.870 | 2.879 | -0.015 |
| JAN   | 2.980 | 2.960 | 2.969 | -0.012 |
| FEB   | 2.930 | 2.910 | 2.922 | -0.009 |
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Natural Gas Futures End Choppy Day Down 

Natural gas for March delivery on the NYMEX ended down $0.021 yesterday at $2.117 per MMBtu. The April contract slipped $0.014 to $2.184 per MMBtu. The market opened lower, but bounced off $2.08. However, it could not get higher than $2.15, and failed to trigger anticipated buy stops above $2.17. Every rally is hit with a wave of selling. Look for the market to open lower again this morning. The AGA reports last weeks storage information tomorrow afternoon. Expect a withdrawal of about 120 Bcf  130 Bcf. Last week, 111 Bcf was withdrawn leaving 2.294 Tcf in storage. The nations storage facilities are still 70% full compared to 38% full a year ago. Natural gas for next day delivery across the US and Canada was generally flat to plus or minus $0.05 yesterday. Physical prices jumped higher in the Northeast. Utilities reportedly nominated base-loads for every day for February, intending to use the spot market only as weather dictates. Cash prices held as much as $0.08  $0.09! above the NYMEX. Natural gas for next day delivery at the Henry hub ended flat at $2.18 per MMBtu.
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Today's Power Bulletins
* Otter Tail Says 4th Quarter Operating Income Up 21%
* AEP Hires Schroder Salomon Smith Barney and ABN Amro for UK and Australia Sales
* PricewaterhouseCoopers Says Enron Europe Has Billions of Dollars of Liabilities
* JP Morgan Chase Advises Investors to Ooverweight Calpine Bonds 
* AFL-CIO Asks SEC to Bar Enron Directors from Boards
* Chairman of Russian Giant Unified Energy Systems Seeks Linking Grid with Europe
* Sempra Energy Trading Completes Acquisition of Enron Metals Limited for 
$145 Million in Cash
* Bush Administration Proposes 19% Increase in Spending for Salmon Recovery in the Northwest
* Alliant Energy Resources Completes Exchange Offer for $300 Million of 7% Senior Notes Due 2011 
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WSJ Says Enron Officials Knew About Chewco Partnership 

Top Enron executives, including Chairman Lay and former CEO Jeffrey Skilling, knew about the controversial partnerships, according to the Wall Street Journal, citing minutes from a November 5, 1997 meeting. Former CFO Andrew Fastow and several board members including external director Herbert Winokur Jr were also at the meeting that discussed Enron's partnership Chewco, named for the Star Wars character Chewbacca. Chewco, which was supposed to be completely independent, but was run and partly owned by Enron executive Michael Kopper, who also attended the meeting. Federal investigators and private litigants are trying to find out who knew what about Chewco and when. An attorney for Winokur says the executive committee was told that Chewco was a special-purpose vehicle not affiliated with the company. The board never waived the conflict-of-interest policy for Kopper nor was the board told that Kopper was involved with Chewco. 
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Natural Gas NYMEX Volume
02MAR   28,386
02APR    6,782
02MAY    2,853
02JUN    1,156
02JLY    1,787
02AUG    1,270
02SEP    1,360
02OCT    2,160
02NOV    1,238
02DEC    1,213
03JAN    1,710
03FEB    1,558
03MAR      130
03APR       57
03MAY       36
03JUN      179
03JLY       54
03AUG      827
03SEP      203
03OCT       62
03NOV      125
03DEC       84
04JAN       19
04FEB       52
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Lay Breaks Date with Congress After Report Issued

Enron attempted to systematically manipulate its financial results and deceive shareholders as top executives made personal gains of millions of dollars, according to William Powers, dean of the University of Texas Law School in testimony to be delivered before Congress yesterday. There was also failures in the performance of Enron's outside advisors. And there was a fundamental default of leadership and management, starting with former CEO Ken Lay and reaching to the board and senior managers. As Congress begins a week of hearings, the House Financial Services capital markets subcommittee also heard from SEC Chairman Harvey Pitt. Powers joined the Enron board to investigate events leading up to the company filing for bankruptcy on December 2nd. He has issued a 218-page report that found Enron fattened its profits by almost $1 billion through a web of financial partnerships used to hide losses, while top managers made millions of dollars they should never have received. ! He laid some of the blame for on Lay and of Jeffrey Skilling. Powers said former ex-Enron CFO Andrew Fastow made at least $30 million, while former senior executive Michael Kopper made at least $10 million through their involvement in off-the-books partnerships. Enrons board of directors failed in its duty to provide leadership and oversight and in the end, the tragedy could and should have been avoided, Powers said. After the report was released, Lay canceled plans to testify before a Senate committee and before the capital markets subcommittee. 
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PHYSICAL POWER PRICES
|            | High  |  Low  | Average |
|            | $/MWh | $/MWh |  $/MWh  |
| Cinergy    | 24.00 | 20.15 |  21.90  |
| ECAR       | 23.00 | 19.00 |  20.40  |
| ERCOT      | 21.00 | 18.50 |  19.10  |
| Entergy    | 21.05 | 20.00 |  20.50  |
| TVA        | 24.00 | 21.00 |  22.55  |
| ComEd      | 23.50 | 21.50 |  22.60  |
| Nepool     | 30.80 | 29.80 |  30.15  |
| PJM West   | 22.75 | 21.75 |  22.00  |
| Main       | 23.25 | 20.00 |  22.15  |
| MAPP       | 23.75 | 20.25 |  22.30  |
| Palo Verde | 24.00 | 23.00 |  23.75  |
| Mid C      | 21.00 | 19.00 |  19.60  |
| COB        | 24.00 | 22.00 |  22.60  |
| 4 Corners  | 24.25 | 23.25 |  23.90  |
| Mead       | 25.75 | 24.00 |  24.95  |
| NP 15      | 25.25 | 23.50 |  24.25  |
| SP 15      | 25.25 | 23.50 |  24.45  |
-------------------------------------------------------------

AEP May Sell Some Foreign Assets 

American Electric Power may sell Seeboard, which serves 2 million power and natural gas users in the UK, and CitiPower, an Australian retail and distribution unit, to lower debt as it switches its focus to wholesale markets and away from household power supply. Like Reliant and Mirant, AEP is selling foreign assets to protect its credit ratings. Enrons bankruptcy has caused many energy companies to slash capital spending and sell assets to lower debt. AEP has $2.6 billion in debt maturing in the next 2 years. Seeboard is valued at about $2.1 billion and CitiPower at as much as $760 million. AEP, which acquired Seeboard in a $10 billion buyout of C&SW, said will consider all potential options for Seeboard. AEPs 4th quarter earnings fell 41% due to mild weather. It is selling common stock and convertible preferred shares to raise cash and shore up its balance sheet. Last year, AEP sold Yorkshire Power in the UK and purchased 2 power stations. AEP has also been expanding it! s energy trading business after Enrons collapse. It bought Enron's Scandinavian businesses and hired 22 coal traders from Enron. Seeboard is likely to fetch a good price since it is the only supply business for sale in the UK. E.ON, Electricite de France and Scottish & Southern Energy have been named as likely bidders for Seeboard. CitiPowers sale will probably happen in the 3rd quarter, according to AEP. Possible buyers could be Australian Gas Light, United Energy and Origin Energy. AEP bought the retail and distribution company for $1.1 billion in 1998.  
-------------------------------------------------------------

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Todays Gas Bulletins
* Ken Lay Quits Enron Board as Congress Investigates
* Maritimes Seeks FERC Approval of $250 Million Pipeline Expansion Into Northeast
* World Natural Gas Producers Discuss Joint Ventures at Algeria Meeting 
* Three Hearings Scheduled for Today; One Involves Enron Board Member William Powers Who Will Testify Before House Energy and Commerce Committee's Oversight Subcommittee
* Dynegy Says It Did Not Cause Enrons Bankruptcy; Says Enron Has Only Itself to Blame
* Internal Enron Report Could Aid Prosecutors
* Justice Department Says Enron Special Counsel Not Needed
* Raymond James and Associates Boosts Natural Gas Price Estimate for 2nd Half of Year in Anticipation of Robust Demand Recovery
* Enbridge Buys Texas Natural Gas Gathering and Processing Assets from Sulfur River Gathering for $178 Million
* Williams Communications Posts Loss; Banks Warn of Default
* Ex-Enron CEO Skilling Still Plans to Testify
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Williams May Sell Midwest Oil Products Pipeline

Williams may sell its 8,000-mile Midwest oil products pipeline and storage depots for between $500 million and $1.5 billion, to help defray costs from possible exposure to $2.4 billion from Williams Communications. Last week, Williams postponed the release of 4th quarter results to review costs associated with Williams Communications Group, which was spun off in April. Williams said that those costs will be included in the 4th quarter earnings report. Williams Energy Partners which is 60% owned by Williams has been mentioned as a likely buyer for the pipeline. Williams has sold securities and cut capital spending to shore up its balance sheet amid heavier scrutiny by credit rating agencies following Enrons bankruptcy. Williams 7.5% coupon bonds maturing in 2031 were down about $44 to $879 per $1,000 face value from $923 last week, with the spread above US Treasuries climbing to 330 basis points from 285. None of the rating agencies has downgraded Williams debt yet, but S! ?has says it may lower Williams ratings because of concern about the company's finances. S?rates Williams BBB+, Moody's rates it Baa2 and Fitch rates it as BBB, all investment grade. Williams is aiming complete the Midwest pipeline sale by the end of the 2nd quarter. Net income for Williams Energy Partners more climbed to $21.7 million from $3 million a year ago. It also  raised quarterly payment to unit holders by 12% to $0.59. The possible purchase of the Midwest pipeline could be financed through a combination of debt and equity, Williams Energy Partners said. The partnership has $140 million in private debt. Williams said its 4th quarter loss had widened and its banks have warned that the it may be in default of their credit agreements. Williams stock dropped 13.9% yesterday, down 2.64 to 16.36. 
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POWER FUTURES  
| Month |   COB   | Change |   PV    | Change |
| MAR   |  19.25  | +0.00  |  21.35  | +0.10  |
| APR   |  19.75  | +0.00  |  22.25  | -0.25  |
| MAY   |  19.50  | +0.00  |  23.75  | -0.75  |
| JUN   |  20.00  | +0.00  |  26.75  | -0.75  |
| JUL   |  26.50  | +0.00  |  37.25  | -0.25  |
| AUG   |  38.00  | +0.00  |  42.50  | +0.00  |
| SEP   |  26.00  | +0.00  |  33.00  | +0.50  |
| OCT   |  24.00  | +0.00  |  28.00  | -1.00  |
| NOV   |  24.50  | +0.00  |  27.00  | -0.50  |
| DEC   |  26.00  | +0.00  |  27.50  | -1.00  |
| JAN   |  30.00  | +0.00  |  28.25  | -0.25  |
| FEB   |  27.50  | +0.00  |  28.00  | +0.25  |
| Month | Entergy | Change | Cinergy | Change |
| MAR   |  19.80  | -0.20  |  20.90  | -0.40  |
| APR   |  19.80  | -0.20  |  21.25  | -0.25  |
| MAY   |  22.25  | -0.25  |  24.50  | +0.00  |
| JUN   |  27.10  | +0.00  |  29.75  | -0.05  |
| JUL   |  34.60  | -0.05  |  38.00  | -0.40  |
| AUG   |  35.25  | +0.60  |  38.00  | -0.40  |
| SEP   |  31.65  | +0.00  |  22.85  | -0.25  |
| OCT   |  22.00  | +0.05  |  22.90  | -0.10  |
| NOV   |  22.00  | +0.05  |  22.90  | -0.10  |
| DEC   |  22.00  | +0.05  |  22.90  | -0.10  |
| JAN   |  24.15  | -0.10  |  25.50  | -0.50  |
| FEB   |  24.15  | -0.10  |  25.50  | -0.50  |
-------------------------------------------------------------
Power Futures     
| Month |  PJM  | Change |
| MAR   | 24.70 | -0.40  |
| APR   | 25.20 | +0.10  |
| MAY   | 28.25 | -0.30  |
| JUN   | 34.75 | -0.50  |
| JUL   | 46.10 | -0.25  |
| AUG   | 27.05 | +0.00  |
| SEP   | 27.05 | -0.05  |
| OCT   | 26.05 | -0.05  |
| NOV   | 26.05 | -0.05  |
| DEC   | 26.05 | -0.05  |
| JAN   | 30.25 | +0.00  |
| FEB   | 30.25 | +0.00  |
-------------------------------------------------------------
Nymex Natural Gas Option Volatility		
Supplied by "The Daily Hedger"					
Futures	               Implied
Month	Settlement	Days Left  Volatility
Mar	 $2.117	       21	    67.7%
Apr	 $2.184	       49	    57.7%
May	 $2.252	       80	    51.4%
Jun	 $2.317	      113	    47.3%
Jul	 $2.377	      141	    53.4%
Aug	 $2.432	      172	    48.8%
Sep	 $2.432	      204	    49.0%
Oct	 $2.459	      233	    54.9%
Nov	 $2.679	      266	    46.9%
Dec	 $2.879	      294	    57.6%
-------------------------------------------------------------

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Lay Makes Himself Scarce

A congressional committee trying to serve a subpoena on former Enron Chairman Ken Lay can not seem to locate him. His personal attorney does not know where he is and would not accept the subpoena. The House of Representatives Financial Services Committee finds the whole situation quiet puzzling. Lay's attorney says he is ill and has no idea where Lay is. Lay resigned from Enrons board yesterday as two congressional committees vowed to force him to come before them to testify or take the 5th Amendment. He had been scheduled to appear before a House Financial Services subcommittee, but backed out over the weekend. It had hoped to compel him to appear today. Lay had also been scheduled to appear before a Senate committee, but canceled that date also. 
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TRADERS DEBATE SHORT SIDE OF MARKET

Although Monday's price action on the New York Mercantile Exchange is perhaps best described as lackadaisical, some traders see inspiration to take the short side of the market where others are focusing on a longer term trend higher.  "When the March contract expired (January 29), it got as low as $1.97 and developed a modest countertrend higher. As long as the market was able to continue trading above the previous day's low, that advance worked well," noted Dean Hazelcorn, trader with Coquest, Dallas.  "Today looks like a sell signal. The high of the March contract did not exceed Friday's high and today's low was lower. That sets up a trade down to $1.97. I look for a slow deteriorating front end of the board," he noted.  "I'm back in a bearish mode, and I think we're headed below $2.00. I believe that there is a 99% probability the market will work lower, but it may take 3 months to do it," he cautioned.  Other traders are more optimistic.  "Longer ter! m I'm bullish," says John Beaver, President Private Futures Group, Oklahoma City.  "It's more difficult to be bullish on the front of the board, but looking at the charts it suggests that prices may be set to rise.  There's a gap on the weekly chart between $2.17 and $2.20 on the weekly chart (week ending January 18, and January 25). and if prices could fill that gap, it would be a positive sign that prices were set to move higher," he said.  A gap is a pattern on the price charts followed by market technicians. The idea is that the gap may act as a barrier to (in this case) further price advances. Once the gap is "filled", however, a potential limitation to price advances has been removed and prices would be empowered to move higher.  "I don't have any interest in being short the market at the $2.00 level. I don't want to be in a trade that may only make 10 or 15 cents and have to worry about it," he said.  "If you are a commercial trader are you going to get short at $1.85! ? What is your board of directors going to say?" 
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-------------------------------------------------------------
FINANCIAL SUMMARY
The TSE 300 dropped 99.44 points to 7591.07
The CRB Index dipped 0.21 points to 189.30
The US Dollar decreased 0.88 points to 118.91
The Dow declined 220.10 points to 9687.09
The S?500 lost 27.76 points to 1094.44
The Nasdaq was down 55.71 points to 1855.53
March NYMEX Crude Oil fell 0.31 to 20.07
Canadian-US Exchange rose 0.0008 to 1.5915
-------------------------------------------------------------
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