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Enerfax Daily
NORTH AMERICA'S FREE POWER AND GAS INFORMATION SOURCE
              Wednesday, February 6 2002 No. 928
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              | 2.08  |
| ANR SE                  | 2.14  |
| Carthage TG             | 2.13  |
| Chicago Citygate        | 2.20  |
| Columbia Gulf Onshore   | 2.18  |
| Dominion South Point    | 2.46  |
| Henry Hub               | 2.20  |
| Houston Ship Channel    | 2.19  |
| Katy Hub                | 2.12  |
| NGPL LA Pool            | 2.14  |
| NGPL - Midcontinent     | 2.09  |
| NGPL STX                | 2.09  |
| NGPL TX/OK              | 2.12  |
| NNG Demarc.             | 2.15  |
| Niagara                 | 2.46  |
| Sonat Tier 1            | 2.16  |
| TCO IPP Pool            | 2.29  |
| Tetco ELa               | 2.18  |
| Tetco M-3               | 2.69  |
| Tetco STX               | 2.11  |
| TGP Zone 0              | 2.10  |
| TGP Zone 1 (500 Leg)    | 2.16  |
| TGT Zone SL             | 2.18  |
| New York Citygate       | 3.00  |
| Transco Station 65      | 2.22  |
| Transco Zone 6 (NY)     | 3.00  |
| Trunk ELa               | 2.14  |
| Western Region
| California Border       | 2.16  |
| El Paso Keystone        | 2.04  |
| El Paso San Juan-Blanco | 2.05  |
| Waha Hub                | 2.08  |
| Canadian/Rockies Region
| Nova/Aeco (C$/gig)      | 2.83  |
| Dawn Hub/Union          | 2.29  |
| Northwest Stanfield     | 1.99  |
| Wyoming Pool            | 1.91  |
| Opal                    | 1.91  |
| PGT-Malin               | 2.08  |
| Sumas                   | 1.95  |
         Flow Date 2/6
-------------------------------------------------------------

NATURAL GAS FUTURES
Henry Hub
12 Month Strip  2.4864  -0.0152
18 Month Strip  2.5950  -0.0073
| Month | High  |  Low  | Close | Change |
|  MAR  | 2.140 | 2.070 | 2.074 | -0.043 |
|  APR  | 2.200 | 2.150 | 2.152 | -0.032 |
|  MAY  | 2.260 | 2.220 | 2.227 | -0.025 |
|  JUN  | 2.325 | 2.290 | 2.297 | -0.020 |
|  JUL  | 2.385 | 2.355 | 2.362 | -0.015 |
|  AUG  | 2.435 | 2.415 | 2.419 | -0.013 |
|  SEP  | 2.440 | 2.422 | 2.422 | -0.010 |
|  OCT  | 2.460 | 2.440 | 2.450 | -0.009 |
|  NOV  | 2.690 | 2.670 | 2.670 | -0.009 |
|  DEC  | 2.895 | 2.870 | 2.873 | -0.006 |
|  JAN  | 2.990 | 2.965 | 2.968 | -0.001 |
|  FEB  | 2.940 | 2.920 | 2.923 | +0.001 |
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Natural Gas Futures Dip Lower in Quiet Trading

    Natural gas for March delivery on the NYMEX dropped $0.043 to $2.074
per MMBtu yesterday. The April contract lost $0.032 to $2.152 per MMBtu.
The market dipped lower soon after opening higher and spent most of the
session between $2.10 - $2.12, but fell off sharply near the close as
locals sold down the contract to the $2.07 support level and went home
short. The AGA will release this week's storage report this afternoon, and
while some traders are predicting a very bearish less than 100 Bcf
withdrawal, look for the number to be closer to 120 Bcf. Cold weather in
the Midwest and Texas, the growing differential between cash and futures,
and the perceived premium in the early March contract have kept the market
from dropping further. Physical prices retained their premium over futures
yesterday on short-term cold weather at some pipelines, maintaining about
a $0.07 - $0.10 premium over the NYMEX. But cash traders expect the demand
to ease quickly as temperatures moderate by this weekend. As usual, the
market will look to the weekly storage report for short term direction,
but it is the massive amount of volumes still in storage compared to last
year that has put a cap on longer term price increases. Natural gas for
next day delivery across the US and Canada was generally flat to plus or
minus a few cents yesterday. Natural gas for next day delivery at the
Henry hub gained $0.02 to $2.20 per MMBtu.
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Today's Power Bulletins
 * Ameren 4th Quarter Earnings Jump 19% as Increased Electricity Sales
Offset Lower Prices
 * In Wake of Enron Collapse, Senate Energy Committee Takes 2nd Look at
Public Utility Holding Company Act at Hearing Today
 * California Senate Energy Committee's Plans Hearing on ISO's Market
Design Plan for 2002; Members Have Serious Doubts About ISO's Ability to
Enforce Market Rules Going Forward
 * Allegheny Energy Files Shelf to Sell Up to $1.5 Billion in Common
Stock, Preferred Securities, Debt Securities, Warrants, Contracts, Units
and Trusts
 * Unitil Cuts New Hampshire Electric Rates to Lowest in Region
 * El Paso Completes 172 MW Expansion of Linden NJ Power Plant
 * Centennial Power Acquires Rocky Mountain Power
 * Duke/Fluor Daniel to Build 875 MW Power Plant for South Carolina
Electric & Gas
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Enron Executives Knew of Losses


    Enron's top executives and board of directors knew as early as March
that its off the books partnerships were losing money, according to
William Powers, dean of the University of Texas Law School who was
appointed Enron's board of directors to investigate the company. In
testimony before the House Energy and Commerce Committee, Powers said that
Enron had a $500 million loss in March. Rather than report it to
shareholders, Enron gave a partnership called Raptor another $800 million
in Enron shares. He said that there is no doubt that almost everyone, from
the board of directors on down, knew that the company was attempting to
offset investment losses with stock. The partnerships allowed Enron to
misrepresent earnings for a period spanning the 3rd quarter of 2000
through the 3rd quarter of 2001 by $1 billion. Powers told that committee
that over 70% of Enron's earnings for that period were false. He said that
there were red flags that should have alerted former chairman Ken Lay to
what was happening. Powers says that Lay definitely understood that Enron
was using its own stock to offset the losses in the partnerships.
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-------------------------------------------------------------
Natural Gas NYMEX Volume
02MAR   25,298
02APR    7,115
02MAY    2,369
02JUN      807
02JLY    1,671
02AUG    2,177
02SEP    1,961
02OCT    2,144
02NOV      638
02DEC      475
03JAN      905
03FEB      351
03MAR    1,138
03APR      543
03MAY      498
03JUN      609
03JLY      230
03AUG      141
03SEP       97
03OCT      138
03NOV       38
03DEC       58
04JAN      110
04FEB       20
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Reliant Shares Plunge after Delay of 4th Quarter Results


    Reliant Resources' stock plunged more than 13% yesterday, dropping to
a 52-week low after it delayed 4th quarter earnings and said it will
restate earnings for the 2nd and 3rd quarters of 2001 to reflect
additional profits of $100 - $130 million. However, it lowered its
earnings guidance for 2002. Reliant Resources is 80% owned by Reliant
Energy, which also delayed its 4th quarter report. Shares of Reliant
Energy dropped $1.98, or 8%, to $22.94. Reliant Resources said it will
restate earnings due to a reclassification of purchases and sales of
natural gas and power that were originally intended to be cash flow
hedges, but said it now believes the transactions did not meet all of the
necessary criteria for hedge accounting. Reliant's accounting department
discovered the error as it was preparing the year-end statement and
brought it to the attention of outside auditors and the audit committees
of both Reliant boards. As a result of the reclassification, Reliant will
recognize in 2001 earnings that which it had expected to recognize in 2002
and 2003, resulting in the lowered earnings estimate. The move will not
affect cash flow for any period. Reliant now expects earnings in 2002 of
$1.80 - $2.00 per share, below previous estimates of $2.05 - $2.15 to
reflect weak economic conditions and steps taken to strengthen its balance
sheet. Moody's and S&P both said that the announcements would not have any
impact on the credit rating of Reliant Resources, which was placed on
credit watch after Reliant said it planned to buy Orion Power Holdings for
$2.9 billion. The deal also involves assumption of $2.1 billion in debt
which could cause problems in today's post-Enron environment. Reliant has
lowered its capital spending budget for 2002 to 2006 by $1.6 billion to
further strengthen its balance sheet.
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-------------------------------------------------------------
PHYSICAL POWER PRICES
|            | High  |  Low  | Average |
|            | $/MWh | $/MWh |  $/MWh  |
| Cinergy    | 26.00 | 22.75 |  23.45  |
| ECAR       | 29.00 | 19.00 |  24.00  |
| ERCOT      | 19.35 | 18.25 |  18.70  |
| Entergy    | 23.00 | 21.10 |  21.60  |
| TVA        | 25.30 | 24.50 |  25.10  |
| ComEd      | 23.75 | 23.00 |  23.35  |
| Nepool     | 29.75 | 28.75 |  29.10  |
| PJM West   | 25.75 | 24.75 |  25.20  |
| Main       | 24.00 | 19.75 |  21.80  |
| MAPP       | 24.00 | 21.00 |  22.40  |
| Palo Verde | 23.50 | 22.50 |  23.05  |
| Mid C      | 20.25 | 19.20 |  19.50  |
| COB        | 22.25 | 21.75 |  22.05  |
| 4 Corners  | 24.00 | 23.90 |  23.95  |
| Mead       | 24.50 | 23.75 |  24.25  |
| NP 15      | 24.75 | 24.25 |  24.55  |
| SP 15      | 25.50 | 24.00 |  24.65  |
-------------------------------------------------------------
Europeans Trade Enron Debt to Limit Exposure


   Enron's European creditors are scrambling to cut their losses of
billions of dollars to trading partners and banks across the continent. UK
energy companies are pairing off debts and credits, owed to and by Enron,
as they look to limit the losses. Exposures have been exacerbated in some
cases by the invalidity of bank guarantees given by the group just before
it failed in November. Debt trading could reduce by millions of dollars
the amount of money Enron Europe's bankruptcy administrators
PricewaterhouseCoopers can recover as companies try to limit their
exposure to the energy group. PWC was appointed in late November to wind
up Enron's European division. PWC expects to recoup only about $100
million from contracts held by Enron Europe's main trading unit, Enron
Trade Capital Trade Resources. Liabilities in Europe would run in to the
billions of dollars, PWC has told creditors.  Many creditors are expecting
to recoup little or none of the money owed to them. Debt trading is legal
during administration but has to stop once the company is put into
liquidation, the next stage in the bankruptcy process. The administrators
are not necessarily aware of the details of the debt trading and will only
be able to see the impact when the company is liquidated and they try to
recover the remaining money owed to Enron. PWC will hold Enron creditors'
meetings in London next week followed by an auction of the contents of
Enron's London headquarters.
-------------------------------------------------------------
OPEN SEASON

SG Resources Mississippi, L.L.C., a wholly owned subsidiary of SGR
Holdings, L.L.C., is conducting an open season for firm storage services
at its new high-deliverability, salt cavern, natural gas storage facility,
known as the Southern Pines Energy Center. The open season will begin at
9:00 a.m. CDT on February 4, 2002, and will continue until 5:00 p.m. CDT
on March 4, 2002. The project is located at the border of Mississippi and
Alabama with access to the major pipelines serving the Mid-Atlantic and
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project. Information on the facility and the Open Season is available on
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or contact us at 713-914-8188.
-------------------------------------------------------------
Todays Gas Bulletins
 * President Bush Refuses Appeal by Democratic Senators to Appoint Special
Prosecutor to Lead Enron Investigation
 * Lehman Brothers Cuts Investment Rating on Alberta Energy to 'Market
Perform' from 'Buy'
 * EPA Memo Says White House Energy Plan Misleading
 * Enron Ex-Chief Lay Subpoenaed But May Not Talk; Former CEO Skilling
Still Plans to Testify Thursday
 * Andersen Fights Accusations Before Congress It Helped Design
Off-the-Books
Partnerships Enron Used to Hide Losses, Enrich Senior Executives and
Hoodwink Investors
 * Forest Oil Announces 2001 Drillbit Reserve Replacement of Over 250% of
Production at $1.27 per Mcfe
 * Moody's Says US Corporate Credit Quality Tumbles in January
 * Treasury Secretary Paul O'Neill Says CEO's Need More Accountability
 * China Starts Building Controversial 2,600-Mile, $18 Billion Natural Gas
Pipeline
 * OG&E Estimates Ice Storm Costs Could Top $100 Million; Company to Seek
Financial Relief
------------------------------------------------------------
 Ziff Energy Group presents
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-------------------------------------------------------------
Nymex Natural Gas Option Volatility
Supplied by "The Daily Hedger"
Futures	                              Implied
Month	Settlement Days Left    Volatility
Mar   $2.074      20     63.1%
Apr   $2.152      48     58.4%
May   $2.227      79     52.2%
Jun   $2.297     112     46.3%
Jul   $2.362     140     47.5%
Aug   $2.419     171     46.9%
Sep   $2.422     203     47.2%
Oct   $2.450     232     48.2%
Nov   $2.670     265     47.1%
-------------------------------------------------------------
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-------------------------------------------------------------
POWER FUTURES
| Month |   COB   | Change |   PV    | Change |
| MAR   |  17.00  | -2.25  |  22.00  | +0.65  |
| APR   |  19.00  | -0.75  |  22.75  | +0.50  |
| MAY   |  20.50  | +1.00  |  24.00  | +0.25  |
| JUN   |  22.00  | +2.00  |  27.50  | +0.75  |
| JUL   |  26.50  | +0.00  |  37.50  | +0.25  |
| AUG   |  38.00  | +0.00  |  42.75  | +0.25  |
| SEP   |  30.50  | +4.50  |  33.00  | +0.00  |
| OCT   |  28.50  | +4.50  |  29.00  | +1.00  |
| NOV   |  29.00  | +4.50  |  28.50  | +1.50  |
| DEC   |  30.00  | +4.00  |  29.00  | +1.50  |
| JAN   |  30.00  | +0.00  |  29.00  | +0.75  |
| FEB   |  29.50  | +2.00  |  28.50  | +0.50  |
| Month | Entergy | Change | Cinergy | Change |
| MAR   |  20.00  | +0.20  |  21.10  | +0.20  |
| APR   |  20.00  | +0.20  |  21.60  | +0.35  |
| MAY   |  22.50  | +0.25  |  24.70  | +0.20  |
| JUN   |  27.50  | +0.40  |  30.00  | +0.25  |
| JUL   |  34.50  | -0.10  |  38.25  | +0.25  |
| AUG   |  34.50  | -0.75  |  38.25  | +0.25  |
| SEP   |  21.85  | +0.00  |  22.90  | +0.05  |
| OCT   |  21.85  | -0.15  |  22.90  | +0.00  |
| NOV   |  21.85  | -0.15  |  22.90  | +0.00  |
| DEC   |  21.85  | -0.15  |  22.90  | +0.00  |
| JAN   |  24.10  | -0.05  |  25.90  | +0.40  |
| FEB   |  24.10  | -0.05  |  25.90  | +0.40  |
-------------------------------------------------------------
Power Futures
| Month |  PJM  | Change |
| MAR   | 25.10 | +0.40  |
| APR   | 25.10 | -0.10  |
| MAY   | 28.25 | +0.00  |
| JUN   | 35.00 | +0.25  |
| JUL   | 46.15 | +0.05  |
| AUG   | 46.15 | +0.00  |
| SEP   | 27.15 | +0.10  |
| OCT   | 26.00 | -0.05  |
| NOV   | 26.00 | -0.05  |
| DEC   | 26.00 | -0.05  |
| JAN   | 30.25 | +0.00  |
| FEB   | 30.25 | +0.00  |
-------------------------------------------------------------
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ICE to Move Natural Gas Trading to IPE First


   The European natural gas business on the IPE will be the first to move
onto the electronic platform of the IntercontinentalExchange following the
merger of the two exchanges. The move will likely be done this summer. ICE
took over the IPE last year in a bid to create a global electronic
platform for trading futures and over-the-counter products. ICE eventually
plans to transfer all of IPE's business online and away with open outcry
pit trading. ICE is owned by 100 of the world's largest energy and metals
traders, brokers and bankers. And, what a coincidence that EnronOnline got
out of ICE's way just in time as it was approaching critical mass. We were
just a tree in the forest, and then the forest burned down, says ICE's
CEO. From hosting 2,500 trades totaling $2 billion a day in September, ICE
now averages $4 billion per day and 4,600 trades.
-------------------------------------------------------------
7th Annual
THE LDC FORUM  *  WINTER OF 2002
April 18-19, 2002  -  Boston, Massachusetts

SAVE $100 - ACT NOW!  (offer expires 2-15-02)

CONFERENCE HIGHLIGHTS INCLUDE:

Meet with over 500 gas buyers and sellers at the largest LDC Forum ever!
Special sessions include detailed discussions on The Post-Enron
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FOR ATTENDEES LIST, go to:
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--------------------------------------------------------------------------------------------------------------------------

Enron Trading Unit May Have Operated in Red


    Enron's energy trading unit may have been operating in the red for
months prior to its bankruptcy. Enron's Wholesale Services reported 3rd
quarter profits climbed to $696 million before interest and taxes, but its
profit margin dropped to 1.6%. The ratio of profit to sales does not
include funds borrowed to cover $2.8 billion in daily trades by
EnronOnline. In filings with the SEC, in the 3rd quarter, the last period
for which figures are available, Enron's trading revenue rose 54% to $43.4
billion. In July, Enron officials claimed that the trading unit was
dramatically expanding and profitable. The unit was credited with
producing 97% of Enron's 2000 revenue. Enron had $28 billion in revenue
from trading with a profit of $627 million, or a 2.2% margin before
interest and taxes in the 3rd quarter of 2000. Enron's energy trading unit
had a 1% profit after taxes and interest last year, according to
estimates. But, since Enron didn't account for the funds borrowed to cover
$2.8 billion in daily trades, profit margins may have been much lower or
nonexistent. Enron also had 3,000 affiliated partnerships which hid up to
$1 billion of losses and some industry insiders have said that Enron's
losses may have been too much for any trading unit to cover. One of the
partnerships bought 14 Enron power plants for $800 million in 1999, using
money that was generated by selling bonds backed by Enron shares. In the 2
years prior to its collapse, Enron sold billions of assets to independent
companies and at times for as little as $0.50 on the dollar. In 1999, it
received $247 million for a London power plant 10 months after opening it
at a cost of $500 million. Last year, Enron sold Azurix for $1.4 billion
after paying $2.8 billion for it in 1998. In fact almost everything other
than EnronOnline seemed to have to have lost money over the last few
yaers, from telecom to Indian power plants.
-------------------------------------------------------------

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-------------------------------------------------------------
FINANCIAL SUMMARY
The TSE 300 dropped 67.60 points to 7523.47
The CRB Index gained 0.46 points to 189.76
The US Dollar increased 0.64 points to 119.54
The Dow declined 6.85 points to 9685.43
The S&P 500 lost 4.42 points to 1090.02
The Nasdaq was down 17.01 points to 1838.52
March NYMEX Crude Oil Flat at 20.07
Canadian-US Exchange rose 0.0063 to 1.5978
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